ORENINC INDEX - Monday, August 17th 2020
North America’s leading junior mining finance data provider
Last Week: 88.77 (Updated)
This week: 57.30
The Oreninc Index fell in the week ending August 14th, 2020 to 57.30 from an updated 88.77 a week ago as financings eased off.
The COVID-19 virus global death toll has reached 775,000 with more than 21 million cases reported worldwide. Positive news came out of Russia which approved a vaccine. Health experts caution against premature celebrations as the Russian vaccine has not gone through full stage three trials that last a few months.
Gold was rocked this past week when legendary investor Warren Buffett bought a 1.2% of Barrick Gold, reversing his view of the yellow metal, which he previously steered clear of on the grounds it is not productive.
The announcement capped a wild week for precious metals which experienced a much-anticipated market correction which saw gold plunge more than US$100/oz, bottoming-out at $1,911/oz before strengthening as the week ended, while silver lost more than $4/oz during the same correction.
In the USA, while Republicans and Democrats continued to disagree on the size of a fresh stimulus package, initial weekly jobless claims fell 228,000 to 963,000 million, beating market expectations and falling below one million for the first time since lockdowns began in March, according to US Labor Department data. The four-week moving average for new claims fell to 1.25 million from last week’s revised average of 1.3 million. Continuing jobless claims were 15.5 million during the week ending August 1, down 604,000 from the previous week’s revised 16.1 million and the four-week moving average fell to 16.2 million.
The US Producer Price Index (PPI) beat expectations in July, rising 0.6%, above consensus expectations of a 0.3% rise.
The oil industry continues to suffer as the International Energy Agency cut its estimates for global oil demand for almost every quarter through the end of 2021 due to the worsening outlook for air travel as the COVID-19 pandemic keeps people at home. Worse yet, the world’s largest listed oil companies wiping US$87 billion from the value of their oil and gas assets in the last nine months as the COVID-19 accelerates a global shift away from fossil fuels.
In Europe, the UK economy is in its deepest recession since records began as GDP fell 20.4% in the three months to June, the worst of any G7 nation.
On to the money: aggregate financings announced fell below $100 million as they fell to $82.6 million, an eight-week low, which included two brokered financings for $10 million, a 17-week low, and no bought deal financings. The average offer size fell to $1.8 million, an eight-week low, while the number of financings fell to 45.
The Gold spot price experienced a market correction as it closed down at $1,945/oz from $2,035/oz a week ago. The yellow metal is up 28.20% so far this year. The US dollar index resumed its losing streak as it closed down at 93.09 from 93.43 last week. The VanEck managed GDXJ sold back on the correction and closed down at $57.98 from $60.95 a week ago. The index is now up 37.20% so far this year. The US Global Go Gold ETF pared back as well to $23.39 from $24.61 a week ago. It is up 33.20% so far this year. The HUI Arca Gold BUGS Index closed down at 330.32 from 350.78 last week. The SPDR GLD ETF inventory decreased, closing the week down at 1,248.29 tonnes or 40.1 million ounces from 1,262.12 tonnes tonnes last week.
In other commodities, Silver also corrected as the spot price closed the week down at $26.44/oz from $28.30/oz a week ago. Copper had a better week as it made up some recently lost ground as it closed up at $2.88/lb from $2.79/lb a week ago. Oil returned weakened as WTI closed down at $41.01 a barrel from $41.22 a barrel a week ago.
The Dow Jones Industrial Average closed up again at 27,931 from 27,433 a week ago. Canada’s S&P/TSX Composite Index closed down at 16,514 from 16,544 the previous week. The S&P/TSX Venture Composite Index fell a smidge to 737.65 from 739.98 last week.
- Number of financings decreased to 45.
- Four brokered financings were announced this week for $10 million, a 17-week low.
- No bought-deal financings were announced this week.
- Total dollars decreased to $82.6 million, an eight-week low.
- Average offer fell to $1.8 million, an eight-week low.
Blue Lagoon Resources (CSE:BLLG) opened and closed a private placement for $7.5 million.
- 21.5 million units @ $0.35.
- Each unit is comprised of one share and half a warrant exercisable @ $0.50 for two years.
- Proceeds will be used for exploration activities to expand and upgrade known mineralization and resource areas on the Dome Mountain gold project in British Columbia, Canada.
Major Financing Openings
- Blue Lagoon Resources (CSE:BLLG) opened a $7.52 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.
- Stratabound Minerals (TSXV:SB) opened a $7 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.
- Desert Gold Ventures (TSXV:DAU) opened a $6.5 million offering on a best efforts basis. Each unit includes half a warrant that expires in three years.
- Brixton Metals (TSXV:BBB) opened a $5.5 million offering on a best efforts basis.
Major Financing Closings
- Amarillo Gold (TSXV:AGC) closed a $57.2 million offering underwritten by a syndicate led by Mackie Research Capital on a best efforts basis.
- Discovery Metals (TSXV:DSV.H) closed a $35 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.
- Talisker Resources (CSE:TSK) closed a $23 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal basis. Each unit included half a warrant that expires in a year.
- Erdene Resource Development (TSX:ERD) closed a $20 million offering on a best efforts basis.