Oreninc Index Continues Slide to Five-Week Low

 The Oreninc Index continued its slide down for the week ending May 28, 2015. Total dollars announced fell to $52m, a five-week low. Three brokered deals were announced for $19.5m, a five-week low; no bought deals were announced for the first time in five weeks.

Deal making picked up for the week, with the most activity coming from Barrick Gold, (TSX:ABX) which sold both it’s Cowal gold mine in a deal worth $550m and a 50% stake in its subsidiary that manages the Porgea mine for $298m in cash to Evolution Mining (ASX:EVN) and Zijin Mining Group Co (HK:2899) respectively. Gold continued its slide for the week, falling below $1,190 an ounce. Iron ore rebounded for the week after a down week last week.

While financing levels did decrease, it is encouraging to see the amount of deal making that is happening in the space. Still, these types of deals are more encouraging for producing companies, and junior exploration companies continue to struggle with getting any real extended foothold raising capital in the current market.

Oreninc Index Falls to Reality

The Oreninc Index fell back down to reality for the week ending May 21, 2015. Total dollars announced fell to $104.6m, a two-week low. Four brokered financings were announced for $76.4m, a three-week low; three bought-deal financings were announced for $61.4m, a two-week low.

Deal-making was slow for the week, with the most notable news being the commencement of trading of South32 Limited (ASX:S32), BHP Billiton Ltd.’s (NYSE:BHP) recently spun-out mining producer. Commodities had a down week with gold falling sharply, ending the week just above $1,200 an ounce, and iron ore falling after a couple of good straight weeks.

While it is disappointing that the Index’s performance went down and commodity prices had such a rough week, the five-week average increased to its highest level in 31 weeks. Given the state of the industry, that is as encouraging sign as we could hope for heading into the summer months.

Oreninc Index Jumps to Five-Week High

The Oreninc Index jumped to a five-week high for the week ending May 14, 2015. Total dollars announced exploded to $243.7m, a 30-week high. Five brokered financings were announced for $106.1m, a five-week high; Two bought deals were announced for $69m, also a five-week high.

Deal-making was relatively quiet this week, with Crocodile Gold (TSX:CRK) and Newmarket Gold Inc. (TSX-V:NGN) agreeing to merge to form a new mid-tier gold producer being the largest of note. Crocodile and Newmarket shareholders will own 80% and 12% stakes in NewCo respectively (the remaining 8% will be sold in a corresponding private placement). Iron ore continued its rise, and gold had a fantastic week, ending the period well above the $1,200 level.

Although deal-making dropped off a bit this week, the Index’s solid performance over the previous three weeks, mixed with gold and iron ore prices, is a positive way to head into the generally quieter summer months.

 Oreninc Index Stays Level

The Oreninc Index stayed level for the week ending May 7, 2015. Total dollars announced increased to $92.7m, a four-week high. Four brokered deals were announced for $76.9m, a four-week low; three bought deals were announced for $26.9m, a two-week low.

The most significant deal-making news of the week was already expected, with BHP Billton Ltd. (NYSE:BBL) shareholders voting in favor of a proposed spin-out of a portion of the Australian miner’s assets into a new BHP shareholder-owned company, South32, which will be listed in Austalia, South America and London later this month. Iron ore continued its rise, reaching above $60 per tonne for the first time in nine weeks.

Easily the most encouraging part of the week was iron ore’s continued rise after such a rough period for the base metal. Obviously, seeing the increased Index level and continued broker support is also nice, but it will take a couple more weeks of good financing numbers before any real optimism can really be gleaned from it.

Oreninc Index Leaps to Three-Week High

The Oreninc Index leapt to a three-week high for the week ending April 30, 2015. Total dollars announced increased to $74.9m, a three-week high. Twelve brokered financings were announced for $56.5m, a three-week high; four bought-deal financings were announced for $35m, a three-week high.

Deal-making slowed for the week, the only real deal of note being Newmont Mining Corporation’s (NYSE:NEM) sale of their Waihi gold mining operation in New Zealand to OceanaGold Corporation (TSX:OGC) for USD $106m. Commodities for the week were mixed, with iron ore having yet another strong week and gold fluctuating wildly but ending the week well below the all-important $1,200 level.

It’s nice to see the Index have a good performance after a couple of disappointing weeks, especially with summer approaching quickly and with it the end of the financing season. 

Oreninc Index Falls to Four Week Low

The Oreninc Index fell to a four-week low for the week ending April 23, 2015. Total dollars increased to $39.5m on 27 financings, both two-week highs. Two brokered financings were announced for $4.3m, a four-week low. No bought deals were announced for the first time in four weeks.

A number of smaller and mid-sized deals were announced for the week, the largest being the finalization of Coeur d'Alene Mines Corp’s (NYSE:CDE) purchase of Paramount Gold and Silver Corp. (TSX:PZG) for $146m. Commodities for the week were mixed, with gold dropping marginally and iron ore having a strong week.

It’s difficult to remain optimistic when the Index’s levels fall as they did, however considering the increase in money raised and the number of deals, we anticipate some marginal increase in activity as companies gear up for summer exploration.

Oreninc Index Take a Normalizing Dive

The Oreninc Index took a normalizing dive for the week ending April 16, 2015. Total dollars announced fell to $29.7m on 16 deals, three- and four-week lows respectively. One brokered and one bought deal were announced for $13.8m, three-week lows for both.

Deal-making was up again this week, with the planned merger between Alamos Gold (TSX:AGI) and AuRico Gold (TSX:AUQ) being the largest confirmed deal. Shareholders of both companies will each own roughly 50% of the merged company in the US$1.5b deal. Commodities had another up and down week, with gold staying mostly flat and iron ore having a nice couple of days to begin the week before coming back down towards the end.

Last week’s Index performance and the increased level of deal-making in recent weeks is great to see considering the lackluster year, however it’s unsurprising that the Index has fallen to it’s trending level.

Oreninc Index Explodes to 25-Week High

The Oreninc Index exploded to a 25-week high in the holiday-shortened week ending April 9, 2015. Total dollars announced jumped to $166.1m on 32 financings, eight- and six-week highs respectively. Five brokered and bought financings were announced for $138m, eight-week highs for both.

Deal-making was robust with one of the biggest deals of the year (so far) being announced—Royal Dutch Shell’s (NYSE: RDS) acquisition of BG Group (LON:BG) for a cash and stock deal worth $70b (USD). Commodities had another up and down week, with gold gaining a bit before falling below $1,200 an ounce. Oil prices, on the other hand, rose for the fourth straight week.

While one week’s performance is never going to move the needle enough to make up for what has been, up to this point, a horrific financing season, it’s great to finally see a bright spot in the Canadian natural resources space.