ORENINC INDEX down as markets sell off – March 2, 2020

ORENINC INDEX down as markets sell off

 

ORENINC INDEX - Monday, March 2nd 2020

North America’s leading junior mining finance data provider

Oreninc will be at PDAC in Toronto, 1-4 March and will present on Tuesday March 3rd in Room 714 in the Institutional Investment in the Canadian Exploration Industry session.

 

Last Week: 44.79 (Update)

This week: 42.49

The Oreninc Index fell in the week ending February 28th, 2020 to 42.49 from an updated 44.79 a week ago although it was an ugly week for the markets, which sold off heavily on coronavirus concerns.

Comments by the World Health Organization of a very high risk of the Covid-19 virus spreading and reports of initial cases from many countries saw stock markets sell off massively. Gold initially became a safe haven investment, but as the week advanced, it too was sold off as money flooded into treasuries.

More than 2,800 people have died from the in China and 21 in Italy more than 82,000 cases worldwide.

The US Federal Reserve chair Jerome Powell said it is ready to take action without expanding on what that would be although analysts expect a rate cut of at least one half of a percent in March.

As most of the world’s big mining names met in Florida for the annual BMO Global Metals & Mining Conference, the Dow Jones saw its biggest weekly loss ever of over 10%, shedding several thousand points, while gold virtually saw a US$100 swing from US$1,675/oz to under $1,600/oz by the close of the week.

Bad news piled up during what is a leap-year week with Turkey and Russia staring each other down after 33 Turkish soldiers in Syria were killed by an airstrike, although Russia denies any involvement. 

UK Prime Minister Boris Johnson seems determined to not want to reach a trade deal with the European Union given his confrontational negotiating style. Or he thinks extreme brinkmanship is the way forward.

On to the money: total fund raises increased to $62 million, a one-week high, which included one brokered financing for $6 million, a four-week low, and two bought-deal financings for $19.48 million, a two-week low. The average offer size decreased to $1.88 million, a three-week low, while the number of financings more than doubled to 33.

Spot gold soared to US$1,689/oz on Monday before crashing down to $15,66/oz before closing the week down at $1,585/oz from $1,643/oz a week ago. The yellow metal is up 4.51% so far this year. The US dollar index closed down at 98.12 from 99.26 last week. The VanEck managed GDXJ sold off hard and closed down at US$36.05 from $44.97 a week ago. The index is down 14.69% so far in 2020. The US Global Go Gold ETF followed suit and closed down at US$14.88 from $17.92 a week ago. It is down 15.26% so far in 2020. The HUI Arca Gold BUGS Index closed down at 215.54 from 249.75 last week. The SPDR GLD ETF inventory added again as it closed up at 934.23 tonnes from 933.94 tonnes a week ago.

In other commodities, spot silver lost almost US$2/oz as it closed down at US$16.67/oz from $18.49/oz a week ago. Copper resumed its fall closing the week down at US$2.54/lb from $2.61/lb a week ago. The oil price plummeted below US$50 as WTI closed down at US$44.76 a barrel from $53.38 a barrel a week ago.

The Dow Jones Industrial Average lost over 3,000 points as it closed down at 25,409 from 28,992 a week ago. Canada’s S&P/TSX Composite Index closed down at 16,263 from 17,843 the previous week. The S&P/TSX Venture Composite Index closed down at 497.61 from 582.55 last week.

 

Summary

• Number of financings increased to 33.
• One brokered financing was announced this week for $6 million, a four-week low.
• Two bought-deal financings were announced this week for $19.28 million, a two-week low.
• Total dollars increased to $62 million, a one-week high.
• Average offer lessened to $1.88 million, a three-week low.

Financing Highlights

Midas Gold (TSX:MAX) opened $13.28 million offering on a bought deal basis.    

• Agreement with BMO Capital Markets and Sprott Capital Partners and a syndicate of agents including Cormark Securities and Haywood Securities for a best-efforts brokered private placement of notes and/or shares @ C$0.53.
• Proceeds to be used for funding continued work on the Stibnite gold project in Idaho, USA.
• Part of a total US$35 million financing package.
• Binding term sheet with Paulson & Co to purchase Canadian dollar denominated 0.05% senior unsecured seven-year notes convertible @ C$0.53 for a minimum C$33.2 million (US$25 million). 

Major Financing Openings

• Midas Gold (TSX:MAX) opened a $13.28 million offering on a bought deal basis.    
• Guerrero Ventures (TSXV: GV) opened a $10 million offering on a best efforts basis. The deal is expected to close on or about March 31st.
• QMX Gold (TSXV:QMX) opened a $6 million offering underwritten by a syndicate led by Canaccord Genuity 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 March 18th.

Major Financing Closings

• Auryn Resources (TSXV:AUG) closed a $15 million offering on a best efforts basis.
• Standard Lithium (TSXV:SLL) closed a $12.11 million offering on a best efforts basis. Each unit included a warrant that expires in two years. 
• Ascot Resources (TSXV:AOT) closed a $10.25 million offering on a best efforts basis.
• Rubicon Minerals (TSX:RMX) closed a $9 million offering underwritten by a syndicate led by Cormark Securities on a bought deal basis.