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Oreninc Index: June 10, 2019

 

ORENINC INDEX up as gold rebounds, but numbers sad

ORENINC INDEX - Monday, June 10th 2019

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Last week index score: 20.38

This week: 34.68

 

Aura Resources (TSXV:AUU) entered into an option agreement with Thorsen-Fordyce Merchant Capital and TF Minerals to earn a 100% interest in the Jefferson Canyon gold-silver project in southern Nevada, USA. 

The Oreninc Index increased in the week ending June 7th, 2019 to 34.68 from 20.38 a week ago as gold rebounded sharply and there was some bought deal action. However—and a rather poignant however at that—the numbers continue to be terrible with total dollars announced under C$20 million and the average offer size down to C$500k.

This past week marked the 75th anniversary of the D-Day landings of Allied forces in Normandy, France which eventually helped defeat Nazi Germany. Without this effort and sacrifice, along with an equally determined effort by Russia in the east, the world would have been a markedly different one from that which we enjoy today.

A strong week for gold as poor US jobs figures suggested that a recession may be around the corner and an easing of interest rates and perhaps more quantitative easing. US non-farms payroll data showed just 75,000 jobs were created in May, well below the 177,000 expected pushing gold to a three-month high. The next US Federal Open Market Committee meeting is June 18-19th.

The US decided not to impose a 5% tariff on imports Mexico after its southern neighbour agreed to do more to stem the tide of illegal immigrants crossing into the US from Mexico. Meanwhile, trade tensions continue unabated between the US and China and these fears continue to beat down base metals with Chile’s state copper company warning that pricing is too low for many operations to be sustainable and certainly too low for new capacity investments to be made.

In the UK, prime minister Theresa May stepped down as leader of the ruling Conservative party although she will remain at the head of the government until a new leader to chosen in the coming days. May was essentially ousted for failing to broker a deal for the UK to leave the European Union that could be supported by the many fragmented and polarised political factions.

On to the money: total fund raises announced decreased to C$15.6 million from C$20.4 million, a 21-week low, that included three brokered financings for C$2.5 million, five-week low and three bought-deal financings for C$2.5 million, an eight-week low. The average offer size decreased to C$0.5 million, a 21-week low, whilst the number of financings increased to 30.

Gold climbed strongly for a second week as it closed up at US$1,340/of from US$1,305/oz a week ago. The yellow metal is up 4.55% so far this year. The US dollar index fell more than a point to close down at 96.54 from 97.75 last week. The Van Eck managed GDXJ gained more than a dollar for a second week running as it closed up at US$30.88 from US$29.53 a week ago. The index is now up 2.18% so far in 2019. The US Global Go Gold ETF also saw a strong rise as it closed up at US$12.84 from US$12.18 a week ago. It is up 12.58% so far in 2019. The HUI Arca Gold BUGS Index closed up as well at 168.95 from 157.08 last week. The SPDR GLD ETF saw its inventory increase again as it closed up at 756.42 tonnes from 743.21 tonnes a week ago.

In other commodities, silver finally broke through the US$15/oz level again as it closed up at US$15.02/oz from US$14.59/oz a week ago. Copper however, continues to languish and shed another couple of cents as it closed down at US$2.62/lb from US$2.64/lb a week ago. Oil’s sell-off stopped as WTI closed up at US$53.99 a barrel from US$53.50 a barrel a week ago.

The Dow Jones Industrial Average saw sharp grow as it powered back up to 25,983 from 24,815 a week ago. Canada’s S&P/TSX Composite Index also closed up at 16,230 from 16,037 the previous week. The S&P/TSX Venture Composite Index closed down however at 596.54 from 601.55 last week.

Summary

·       Number of financings increased to 30.

·       3 brokered financings were announced this week for C$2.5m, a five-week low.

·       3 bought-deal financings were announced this week for C$2.5m, an eight-week low.

·       Total dollars down to C$15.6m, a 21-week low.

·       Average offer decreased to C$0.5m, at 21-week low.

                                                          

Financing Highlights

Dolly Varden Silver (TSXV:DV) announced a private placement to raise gross proceeds of up to C$2.75 million

·       11.0 million flow-through shares @ C$0.25.

·       The net proceeds will be used for further exploration and mineral resource expansion and drilling of the Dolly Varden silver property in British Columbia, Canada.

 

Major Financing Openings

·       Dolly Varden Silver (TSXV:DV) opened a C$2.75 million offering on a best efforts basis.

·       TerraX Minerals (TSXV:TXR) opened a C$2.5 million offering underwritten by a syndicate led by PI Financial on a bought deal basis.

·       VVC Exploration (TSXV:VVC) opened a C$2.0 million offering on a best efforts basis. 

·       Aben Resources (TSXV:ABN) opened a C$1.1 million offering on a best efforts basis.    

Major Financing Closings

·       Nighthawk Gold (TSXV:NHK) closed a C$12.64 million offering underwritten by a syndicate led by PI Financial on a bought deal basis.

·       Generation Mining (CSE:GENM) closed an C$8.0 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis.

·       21C Metals (CSE:BULL) closed a C$2.83 million offering on a best efforts basis.

·       Kutcho Copper (TSXV:KC) closed a C$2.1 million offering on a best efforts basis.

 

Company News

Aura Resources (TSXV:AUU) entered into an option agreement with Thorsen-Fordyce Merchant Capital and TF Minerals to earn a 100% interest in the Jefferson Canyon gold-silver project in southern Nevada, USA. 

·       The agreement covers 57 unpatented claims 9km NE of Kinross Gold’s Round Mountain gold mine, a low-sulfidation epithermal deposit.

·       It hosts a large volcanic-hosted epithermal Au-Ag system similar in age to the Round Mountain deposit.

Analysis

With a similar geological setting to Round Mountain, Jefferson Canyon represents potential of a significant precious metals discovery as evidence by rock samples grading from 2.98 to 26.1g/t Au and 160.4 to 2,975g/t Ag. With surface sampling to be expanded over a north-trending zone measuring about 500m wide and up to 2km long, the company could generate some very impactful news throughout the remainder of the year.

 

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