ORENINC INDEX up as financings resurge – Jul 6, 2020

ORENINC INDEX up as financings resurge

ORENINC INDEX - Monday, July 6th 2020

North America’s leading junior mining finance data provider

Last Week: 61.41 (Updated)

This week: 78.20

The Oreninc Index increased in the week ending July 3rd, 2020 to 78.20 from an updated 61.41 a week ago as financings resurged.

The COVID-19 virus global death toll has passed 530,000 and more than 11.3 million cases reported worldwide.

Gold reached its highest price since September 2011 mid-week in a truncated trading week which saw a national holiday in Canada (Canada Day on July 1st) and markets in the USA preparing for Independence Day (July 4th). Gold pared back as the week ended as the Institute for Supply Management’s manufacturing index moved back over 50, against expectations, coming in at 52.6%.

Finally, some positive jobs news out of the USA as the Bureau of Labor Statistics reported that 4.8 million jobs were created in June, beating expectations of around 3 million, as the unemployment rate fell to 11.1% compared to consensus forecasts of about 12.4%. Revising data for previous months, the Department said 20.8 million people lost their jobs in April while up to 2.7 million jobs were created in May. With COVID-19 cases rising in states which have eased back restrictions some of these gains could be lost if restrictions are reimposed. The report also said mining employment is down by 123,000 since peaking in January 2019, with nearly three-quarters of that occurring occurred since February.

Concern of the US “going in the wrong direction” increased, at least for infectious-disease expert Dr Anthony Fauci who told a Senate panel that new cases 19 could rise to 100,000 a day, up from the current level of about 40,000 due to the easing of social restrictions. 

China has deployed large numbers of troops and weapons along a disputed Himalayan border in violation of bilateral agreements, India’s foreign ministry said on Thursday. After senior military commanders held parleys this week, both sides have since agreed to disengage their troops on the disputed border. But in satellite images reviewed by Reuters, China appears to have added new structures near the site of the Galwan Valley clash that India says is on its side of the LAC. These include camouflaged tents or covered structures and a potential new camp under construction with walls or barricade.

In Europe, the UK and EU negotiators seem incapable of seeing eye-to-eye as they attempt to negotiate new relationship terms for when the current rules expire at the end of the month. Both parties have become entrenched behind red line terms they say are immovable.

On to the money: financings strengthened as the total raises announced increased to $102 million, a five-week high, which included two brokered financings for $35.9 million, a two-week low, and one bought deal financing for $28.4 million, a two-week low. The average offer size increased to $2.4 million, a six-week high, while the number of financings increased to 42.

Gold continued to strengthen as the spot price closed up at $1,772/oz from $1,771/oz a week ago. The yellow metal is up 16.79% so far this year. The US dollar index continued its losing streak as it closed down at 97.17 from 97.43 last week. The VanEck managed GDXJ continued to grow as it closed up at $49.13 from $47.39 a week ago. The index is now up 16.26% so far in 2020. The US Global Go Gold ETF also closed up at $20.98 from $19.92 a week ago. It is up 19.48% so far in 2020. The HUI Arca Gold BUGS Index closed up at 291.59 from 280.22 last week. The SPDR GLD ETF inventory continued to increase, closing the week up at 1,191.47 tonnes or 38.3 million ounces from 1,178.9 tonnes last week.

In other commodities, Silver continued to grow as the spot price closed up at $18.02/oz from $17.81/oz a week ago. Copper continued to grow as it closed up at $2.72/lb from $2.67/lb a week ago. Oil broke above the $40 a barrel mark as WTI closed up at $40.32 a barrel from $38.49 a barrel a week ago.

The Dow Jones Industrial Average closed up at 25,827 from 25,015 a week ago. Canada’s S&P/TSX Composite Index closed up at 15,596 from 15,188 the previous week. The S&P/TSX Venture Composite Index closed up at 633.02 from 598.74 last week.

Summary

• Number of financings increased to 42.
• Two brokered financings were announced this week for $35.9 million, a two-week low.
• One bought-deal financing was announced this week for $28.4 million, a two-week low.
• Total dollars increased to $102 million, a five-week high.
• Average offer increased to $2.4 million, a six-week high.

Financing Highlights

Mako Mining (TSXV:MKO) announced bought deal and non-brokered private placements to raise $28.4 million.

• Syndicate of underwriters led by Stifel GMP.
• 30 million units @ $0.40.
• Each unit comprises one share and half a warrant exercisable @ $0.60 for 18 months.
• Proceeds will be used to fund remaining capital expenditures at the San Albino gold project in Nicaragua.
• A large shareholder intends to subscribe for 41 million units in a concurrent non-brokered private placement on the same terms.

Major Financing Openings

• Mako Mining (TSXV:MKO) opened a $28.4 million offering underwritten by a syndicate led by Stifel GMP on a bought deal basis. Each unit includes half a warrant that expires in 18 months. The deal is expected to close on or about July 16th.
• Caldas Gold (TSX:CGC) opened a $14 million offering on a best efforts basis.   
• Fosterville South Exploration (TSXV:FSX) opened a $7.5 million offering underwritten by a syndicate led by Clarus Securities 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 July 21st.
• Kore Mining (TSXV:KORE) opened a $7.5 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years. 

Major Financing Closings

• Caldas Gold (TSX:CGC) closed a $14 million offering on a best efforts basis.   
• Labrador Gold (TSXV:LAB) closed a $4.3 million offering on a best efforts basis. Each unit included a warrant that expires in two years. 
• Irving Resources (CSE:IRV) closed a $3.52 million offering on a best efforts basis.    

• Lucky Minerals (TSXV:LJ) closed a $3.07 million offering on a best efforts basis.