ORENINC INDEX falls as financings continue on seasonal break

ORENINC INDEX - Monday, January 7th 2019

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Last week index score: 54.26 (updated)

This week: 25.07

The Oreninc Index plummeted in the week ending January 4th, 2019 to 25.07 from an updated 54.26 a week ago as New Year celebrations made for a shortened trading week with less financing action.

Gold continued to show strength as 2019 began, briefly hitting a six-month high before falling away as the week closed. Market observers expect some consolidation and profit taking before the yellow metals moves to the upside. Silver has also gained strongly recently adding about US$1.50/oz to just below the US$16.00/oz mark.

The week closed with a lot of action as an extremely strong jobs report as well as comments by US Federal Reserve Chairman Jerome Powell resulted clipped the wings of the yellow metal and saw US equities rebound. The US Labor Department jobs report said that 312,000 jobs were added in December, way above the circa 180,000 estimated by analysts. Powell, meanwhile, said the central bank would be “patient” to see how the economy progresses due to conflicting signals from market and economic data.

The partial shutdown of the US government continues with President Donald Trump commenting that he would keep it going for years if he doesn’t get the funding to build a wall on the Mexican border to keep out illegal immigrants. Meanwhile, the Democrats took control of the House of Representatives, the country’s lower house, with Nancy Pelosi.

On to the money: total fund raises announced dropped by about one third to C$12.3 million, a 43-week low, that included no brokered financings and no bought-deal financings. The average offer size halved to C$0.61 million, a 104-week low, whilst the number of financings fell to 20, a seven-week low.

Gold continued its growth, closing up at US$1,286/oz from US$1,278/oz a week ago, after pulling back from a high of US$1,294/oz. It is up 0.28% this year. The US dollar index fell again to close down at 96.17 from 96.40 last week. The higher gold price pushed the van Eck managed GDXJ up again to US$31.28 from US$29.44. The index is up 3.51% so far in 2019. A similar tale at the US Global Go Gold ETF that closed up at US$11.66 from US$11.29 a week ago. It is up 2.19% so far in 2019. The HUI Arca Gold BUGS Index closed up at 162.32 from 158.15 last week. The SPDR GLD ETF continued to add ounces to inventory to close up at 798.25 tonnes from 787.67 tonnes a week ago.

In other commodities, silver jumped to close up at US$15.70/oz from US$15.38/oz a week ago. Whilst the precious metals start to shine, copper has been a laggard, shedding a few cents to close down at US$2.64/lb from US$2.68/lb a week ago. Oil continues in the doldrums as WTI closed up at US$47.96 a barrel from US$45.33 a barrel a week ago.

The Dow Jones Industrial Average continues to chart like a roller coaster with large daily swings. This week saw it close up at 23,433 from 23,062 last week after falling to a low of 22,686. Canada’s S&P/TSX Composite Index continued to grow as it closed up at 14,426 from 14,222 the previous week. The S&P/TSX Venture Composite Index also closed up at 587.44 from 552.09 last week.

 

Summary

·       Number of financings decreased to 20, a seven-week low.

·       No brokered financings were announced this week, a seven-week low.

·       No bought-deal financings were announced this week, a two-week low.

·       Total dollars dropped to C$12.3m, a 43-week low.

·       Average offer size diminished to C$0.61m, a 104-week low.

 

 

Financing Highlights

Savary Gold (TSXV:SCA) opened and closed a C$2.0 million private placement.

·       Issued 40.0 million units @ C$0.05.

·       Each unit is comprised of one share and half a warrant exerciseable @ C$0.05 for two years.

·       The proceeds will fund exploration on the Karankasso project in the Hounde belt, Burkina Faso.

·       Strategic investor Semafo (TSX:SMF) will maintain its current 15.5% interest.

 

                                                          

Major Financing Openings

·       Savary Gold (TSXV:SCA) opened a C$2.0 million offering on a best efforts basis. Each unit includes half a warrant that expires in three years.

·       Sokoman Iron (TSXV:SIC) opened a C$1.18 million offering on a best efforts basis.  Each unit includes half a warrant that expires in 1.5 years.

·       GoviEx Uranium (CSE:GXU) opened a C$1.0 million offering on a best efforts basis.  Each unit includes a warrant that expires in a year.

·       Le Mare Gold (TSXV:LMGC) opened a C$0.96 million offering on a best efforts basis.  Each unit includes a warrant that expires in two years.

 

Major Financing Closings

·       Red Pine Exploration (TSXV:RPX) closed a C$3.69 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.

·       Savary Gold (TSXV:SCA) closed a C$2.0 million offering on a best efforts basis. Each unit included half a warrant that expires in three years.

·       Imperial Mining Group (TSXV:IPG) closed a C$1.8 million offering on a best efforts basis.

·      Pancontinental Resources (TSXV:PUC) closed a C$1.71 million offering on a best efforts basis.