ORENINC INDEX up as dollars announced quintupled: January 20, 2020

ORENINC INDEX - Monday, January 20th 2020

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Last Week: 33.21

This week: 54.68

The Oreninc Index increased in the week ending January 17th, 2020 to 54.68 from 33.21 a week ago as the dollars announced increased by more than five times.

In many ways, this was a calmer week as the start of impeachment proceedings against US president Donald Trump by the Senate began. The dust settled around issues such as the potential for conflict between US and Iran and US-China trade tensions eased after the two nations signed a deal. 

The first phase of the US-China trade deal came under closer scrutiny however, with analysts pointing out the hardest aspects of the overall negotiation are yet to come, particularly regarding intellectual property and technology transfer and state subsidies to industries including steel and solar panels. Doubts were also expressed about China’s capacity to buy at the levels stipulated in the phase I deal. The fact that tariffs remain in place over many product categories was also scrutinised.

Phase I cancels planned US tariffs on Chinese-made cell phones, toys and laptop computers and halves the tariff rate to 7.5% on some $120 billion of other Chinese goods. Phase I further opens the Chinese market to US companies with about US$200 billion of purchase commitments of American goods and services by China. However, the 25% tariff on some $250 billion of Chinese industrial goods remain in place.

In Russia, the machinations of President Vladimir Putin mean he could stay in power past well into this decade. A reshuffle at the top of the political pile saw prime minister Dmitri Medvedev resign as Putin possibly moves to make constitutional changes to enable him to stay in power past 2024, when his term as president is due to end. Putin has been in power since 2000, making him the longest-serving leader since Stalin.

On to the money: total fund raises announced more than quintupled to $133.5 million, a six-week high, which included one brokered financing for $30m, a six-week high, and no bought-deal financings. The average offer size almost doubled to more than tripled to $4.45 million, an eight-week high, while the number of financings increased to 30.

The gold spot price had a consolidation week, ending down at US$1,557/oz from $1,562/oz a week ago. The yellow metal is up 2.63% so far this year. The US dollar index strengthen as it closed up at 97.60 from 97.35 last week. The VanEck managed GDXJ closed down a smidge at US$40.85 from $40.90 a week ago. The index is down 3.34% so far in 2020. The US Global Go Gold ETF also down at US$16.91 from $16.99 from $17.36 a week ago. It is down 3.7% so far in 2020. The HUI Arca Gold BUGS Index closed down too at 228.81 from 231.12 last week. The SPDR GLD ETF saw a big jump in inventory as it closed up at 898.82 tonnes from 874.52 tonnes a week ago, its highest level since November.

In other commodities, silver closed down at US$18.04/of from $18.11/oz a week ago. The copper price closed up again at US$2.84/lb from $2.81/lb. The oil price softened as WTI closed down again at US$58.54 a barrel from $59.04 a barrel a week ago.

The Dow Jones Industrial Average continued to break records, to close the week up at 29,348 from 28,823 a week ago. Canada’s S&P/TSX Composite Index also closed up at 17,559 from 17,234 the previous week. The S&P/TSX Venture Composite Index closed up at 584.50 from 582.35 last week.

 

 

Summary

• Number of financings increased to 30.

• One brokered financing was announced this week for $30m, a six-week high.

• No bought-deal financings were announced this.

• Total dollars increased to $133.5m, a six-week high.

• Average offer up to $4.45m, an eight-week high.

 

Financing Highlights

Major Financing Openings

• Eco Oro Minerals (TSX:EOM) opened a $26.12 million offering on a strategic deal basis.    

• Silvercrest Metals (TSXV:SIL) opened a $13.24 million offering on a strategic deal basis.    

• Regency Gold (TSXV:RAU.H) opened a $10 million offering on a best efforts basis.   

 

Major Financing Closings

• Tinka Resources (TSXV:TK) closed a $18.5 million offering on a strategic deal basis.

• Silvercrest Metals (TSXV:SIL) closed a $13.24 million offering on a strategic deal basis.    

• Minera Alamos (TSXV:MAI) closed a $6 million offering on a strategic deal basis.    

• Laramide Resources (TSX:LAM) closed a $4.5 million offering on a best efforts basis.