ORENINC INDEX down as bought deals fell away
ORENINC INDEX - Monday, November 9th 2020
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Last Week: 53.07 (Updated)
This week: 44.82
The Oreninc Index fell in the week ending November 6th, 2020 to 44.82 from an updated 53.07 a week ago as bought deals fell away while deal flow increased.
The COVID-19 virus global death toll approaching 1.3 million with almost 50 million cases reported worldwide. The past week saw the US experience a record-breaking 100,000 plus new COVID-19 cases in a single day.
The US presidential election continues without at declared winner although the Democratic Party candidate, former vice president Joe Biden is inching closer to becoming the 46th president at the time of writing. This election has seen the highest voter turn out for more than 100 years with Biden winning the most votes of any candidate ever.
Metals prices responded strongly upwards to the close race and the fact that neither candidate would have an overwhelming mandate, with the senatorial elections equally divided.
Other positive news for the precious metals complex came in the form of the US Federal Reserve which maintained its benchmark interest rate unchanged at the record-low level of 0-0.25%. The Fed said it expects it will be appropriate to maintain this target range until labor market conditions have reached levels consistent with its assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.
Gold shrugged off strong labor market data as the USA economy created more jobs than expected in October as the Bureau of Labor reported that 638,000 jobs were created, above expectations of around 595,000. The unemployment rate fell to 6.9% from 7.9% in September.
On to the money: the aggregate financings announced increased to $94.3 million, a five-week high, which included two brokered financings for $15 million, a two-week low, and no bought deal financings. The average offer size fell to $3.4 million, a two-week low, while the number of financings increased to 28.
The gold price added US$50/oz as it closed up at $1,951/oz from $1,899/oz oz a week ago. The yellow metal is up 26.6 so far this year. The US dollar index weakened as it closed down at 92.22 from 93.68 a week ago. The VanEck managed GDXJ closed up at $59.64 from $57.67 a week ago. The index is now up 41.13% so far this year. The HUI Arca Gold BUGS Index also closed up at 346.08 from 333.49 last week. The SPDR GLD ETF inventory closed the week down at 1,260.3 tonnes, or 40.52 million ounces, from 1,272.56 tonnes last week.
In other commodities, Silver fell as it closed the week up at $25.61/oz from $24.16/oz a week ago. Copper closed up at $3.15/lb from $3.06/lb a week ago. Oil weakened as WTI closed down at $37.14 a barrel from $40.88 a barrel a barrel a week ago.
The Dow Jones Industrial Average it closed down at 28,323 from 28,606 a week ago. Canada’s S&P/TSX Composite Index also closed down at 16,282 from 16,438 the previous week. The S&P/TSX Venture Composite Index closed up at 742.29 from 725.31.
Summary
• Number of financings increased to 28.
• Two brokered financings were announced this week for $15 million, a two-week low.
• No bought-deal financings were announced this week.
• Total dollars increased to $94.3 million, a five-week high.
• Average offer decreased to $3.4 million, a two-week low.
Financing Highlights
Touchstone Exploration (TSX:TXP) announced a private placement to raise up to US$30 million (C$40 million).
• Shore Capital and Canaccord as joint bookrunners
• Proceeds to be used fund continued exploration, development and production activities at Ortoire in Trinidad and Tobago.
Major Financing Openings
• Touchstone Exploration (TSXV:TAB.U) opened a $40 million offering on a best efforts basis.
• Probe Metals (TSXV:PRB) opened a $10.04 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years. The deal is expected to close on or about November 25th.
• Gold Bull Resources (TSXV:GBRC) opened a $10 million offering brokered by a syndicate led by Canaccord Genuity on a best efforts basis. Each unit includes half a warrant that expires in two years. The deal is expected to close on or about November 19th.
• GT Gold (TSXV:GTT) opened a $5.75 million offering on a best efforts basis. The deal is expected to close on or about November 30th.
Major Financing Closings
• Newcore Gold (TSXV:NCAU) closed a $15 million offering underwritten by a syndicate led by Haywood Securities on a bought deal basis.
• Benz Mining (TSXV:BZ) closed a $13.22 million offering on a best efforts basis. Each unit included half a warrant that expires in two years.
• Northway Resources (TSXV:NTW) closed a $10 million offering underwritten by a syndicate led by Stifel GMP on a best efforts basis.
• Cassiar Gold (TSXV:GLDC) closed a $6.65 million offering on a best efforts basis.
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