Oreninc Index: November 26, 2018
ORENINC INDEX increases despite US Thanksgiving
ORENINC INDEX - Monday, November 26th 2018
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Last week index score: 24.70
This week: 36.90
The Oreninc Index grew in the week ending November 23rd, 2018 to 36.90 from 24.70 a week ago as US Thanksgiving week saw a brokered financing.
The Thanksgiving celebration in the US meant that this was a particularly slow week for gold and other metals although shoppers were forecast to be busy. Deloitte forecast holiday period spending in the US would exceed US$1.1 trillion.
In Europe, The United Kingdom and European Union seem to be getting closer to an agreement on the UK’s exit from the EU. However, all sides of the political spectrum in the UK say they are against the deal under discussion and there are serious doubts that it can be ratified by the UK Parliament.
Oil continues to slide close to the US$50 a barrel level as Saudi Arabia indicated that it is pumping at a record level. Will this translate into miners’ cash costs falling?
On to the money: total fund raises announced decreased to C$45.1 million, a one-week low, which included one brokered financing for C9.2 million, a four-week high and no bought-deal financings. The average offer size decreased to C$1.7 million, a one-week low, whilst the number of financings increased to 26, a five-week high.
Gold had its least dramatic week in recent history as it ended where it started to close even at US$1,223/oz. It is still down 6.10% this year. The US dollar index nudged up slightly to close up at 96.91 from 96.46 last week. The van Eck managed GDXJ retreated again as it closed down at US$27.27 from US$27.51 a week ago. The index is down 20.10% so far in 2018. The US Global Go Gold ETF closed up however at US$10.44 from US$10.37 a week ago. It is now down 19.68% so far in 2018. The HUI Arca Gold BUGS Index closed down at 147.82 from 148.56 last week. The SPDR GLD ETF added to its inventory again closing up at 762.92 tonnes from 759.68 tonnes a week ago.
In other commodities, silver returned to giving up value as it closed down at US$14.29/oz from US$14.42/oz a week ago. Copper lost a few cents to close down at US$2.78/lb from US$2.81/lb last week. Oil continued its slide coming close to crossing over the US$50 a barrel level as WTI closed down at US$50.42 a barrel from US$56.46 a week ago, its lowest price since October 2017.
The Dow Jones Industrial Average saw another losing week as it closed down at 24,285 from 25,413 last week. Canada’s S&P/TSX Composite Index also closed down at 15,010 from 15,155 the previous week. The S&P/TSX Venture Composite Index also closed down at 602.15 from 624.51 from 651.42 last week.
Summary
· Number of financings increased to 26, a five-week high.
· 1 brokered financing was announced this week for C$9.2m, a four-week high.
· No bought-deal financings were announced this week, a two-week low.
· Total dollars decreased to C$45.1m, a one-week low.
· Average offer size lessened to C$1.7m, a one-week low.
Financing Highlights
Nordic Gold (TSXV:NOR) finalized all documents in relation to PFL Raahe Holdings providing US$7.0 million in funding to enable it to reach production at the Laiva gold mine in Finland. First gold pour is scheduled for November 30th.
· PFL provided US$3.0 million on October 17th and another US$4.0 million on November 9th as partial consideration for the purchase of gold under a pre-paid forward gold purchase agreement.
· Nordic will use its best efforts to raise US$7.0 million in a private placement to reduce or cancel the gold deliveries related to these supplemental tranches.
· Executive chairman Basil Botha and CEO Michael Hepworth agreed to invest an additional US$200,000 through participation in the private placement.
· A cash sweep was added to the PPF agreement, requiring any cash above a balance of US$2.0 million from operations to be used to reduce the delivery obligations.
· Nordic closed a US$725,000 tranche under the private placement @ C$0.10 per unit. Each unit consists of one share and one warrant exercisable for two years @ C$0.13.
Major Financing Openings
· Nordic Gold (TSXV:NOR) opened a C$ 9.23 million offering on a best efforts basis.
· Global Atomic (TSXV:GLO) opened a C$ 9.19 million offering underwritten by a syndicate led by Arlington Group Asset Management on a best efforts basis.
· Galantas Gold (TSXV:GAL) opened a C$ 6.88 million offering on a best efforts basis.
Major Financing Closings
· Nordic Gold (TSXV:NOR) closed a C$ 10 million offering on a best efforts basis. Each unit included a warrant that expires in two years.
· Global Atomic (TSXV:GLO) closed a C$ 9.19 million offering underwritten by a syndicate led by Arlington Group Asset Management on a best efforts basis.
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