ORENINC INDEX down as dollars announced plunged again
ORENINC INDEX - Monday, January 27th, 2020
North America’s leading junior mining finance data provider
Last Week: 55.74 (Update)
This week: 44.85
The Oreninc Index fell in the week ending January 24th, 2020 to 44.85 from an updated 55.74 a week ago as dollars announced plunged again.
“How your investment is killing the industry”
Oreninc attended the Vancouver Resource Investment Conference this past week and the presentation we gave is now available on the website. Our interview with Kitco should be available soon as well. Presentation: www.oreninc.com/presentations
Gold continued a slow, steady climb to higher prices as it was a week of net risk, principally due to the outbreak of a new deadly virus in China called coronavirus, which has claimed at least 40 lives so far, provoked a fall in the copper price and seen the US stock market pullback from record-high levels. China has locked down the city of Wuhan where the virus is believed to have started. Added to this, gold also strengthened as the US manufacturing Purchasing Managers Index fell to a three-month low of 51.7.
As impeachment proceedings against US President Donald Trump commenced in the US, he was in Europe with other world and business leaders in Davos, Switzerland for the World Economic Forum. The meeting again failed to reach a consensus about the climate crisis and what action needs, or must, be taken.
With trade tariff issues between the US and China resolved for the time being, Trump was bristling for some action with the European Union and the UK, threatening to implement tariffs on European car imports. In both instances, this is related to European nations seeking to tax pan-national technology companies that reduce their tax burden by basing sales and services in low-tax jurisdictions.
The past week also saw the start of the end of an era in Europe as Ursula von der Leyen (president of the European Commission) and Charles Michel (president of the European Council) signed the 600-page withdrawal agreement for the UK to exit the European Union at the end of January. It was quickly sent to the UK where prime minister Boris Johnson signed it and sent it to the Queen to receive royal assent.
The UK will leave the EU at midnight on 31st January but will remain in the EU’s single market and customs union—but not any decision-making bodies—until the end of 2020.
And continuing the European news lilt, the European Central Bank held its monetary policy meeting, making no changes and stating it will continue its bond-buying program.
On to the money: total fund raises announced more than halved to $56.2 million, a two-week low, which included one brokered financing for $8m, a three-week low, and two bought-deal financings for $8.7 million, a one-week high. The average offer size more than halved to $1.6 million, a two-week low, while the number of financings increased to 35.
The gold spot price continues its slow, steady climb, closing up at US$1,571/oz from $1,557/oz a week ago. The yellow metal is up 3.58% so far this year. The US dollar index also continued to strengthen as it closed up at 97.85 from 97.60 last week. The VanEck managed GDXJ closed up at US$41.79 from $40.85 a week ago. The index is down 1.11% so far in 2020. The US Global Go Gold ETF also closed up at US$17.01 from $16.91 a week ago. It is down 3.13% so far in 2020. The HUI Arca Gold BUGS Index closed up at 236.61 from 228.81 last week. The SPDR GLD ETF its inventory continue to rise as it closed up at 900.58 tonnes from 898.82 tonnes a week ago.
In other commodities, silver closed up at US$18.10/oz from $18.04/oz a week ago. Copper’s momentum was finally halted by the health scare in China as it plunged back down to US$2.68/lb from $2.84/lb last week. The oil price also softened as WTI closed down again at US$54.19 a barrel from $58.54 a barrel a week ago.
The Dow Jones Industrial Average eased back from its recent record highs to close the week down at 28,989 from 29,348 a week ago. Canada’s S&P/TSX Composite Index closed slightly up however at 17,565 from 17,559 the previous week. The S&P/TSX Venture Composite Index closed down at 581.75 from 584.50 last week.
Summary
- Number of financings increased to 35.
- One brokered financing was announced this week for $8m, a three-week low.
- Two bought-deal financings were announced this week $for 8.7m, a one week high.
- Total dollars decreased to $56.2m, a two-week low.
- Average offer lessened to $1.6m, a two-week low.
Financing Highlights
Auryn Resources (TSXV:AUG) opened a $10 million non-brokered private placement on a best efforts basis.
- 6.3 million shares @ C$1.60.
- Auryn agreed with the lender under a September 2019 $3 million bridge loan to amend the loan to add conversion rights of the loan into common shares @ $$1.60.
- Proceeds to be used to fund continued surface exploration at its Sombrero and Curibaya projects located in Peru.
Major Financing Openings
- Auryn Resources (TSXV:AUG) opened a $10 million offering on a best efforts basis. The deal is expected to close on or about January 31st.
- Generation Mining (CSE:GENM) opened a $8.7 million offering underwritten by a syndicate led by Haywood Securities on a bought deal basis. Each unit includes half a warrant that expires in two years. The deal is expected to close on or about February 13th.
- Northern Dynasty Minerals (TSX:NDM) opened a $5.6 million offering on a best efforts basis.
- Canadian Palladium Resources (CSE:BULL) opened a $3.5 million offering on a best efforts basis. Each unit includes a warrant that expires in a year.
Major Financing Closings
- Cordoba Minerals (TSXV:CDB) closed a $11 million offering on a strategic deal basis.
- Pacton Gold (TSXV:PAC) closed a $6.52 million offering on a best efforts basis.
- Silver One Resources (TSXV:SVE) closed a $5.21 million offering on a best efforts basis. Each unit included half a warrant that expires in three years.
- Galway Metals (TSXV:GWM) closed a $2.88 million offering on a best efforts basis.