Oreninc Index Declines

The Oreninc Index declined for the week ending November 27, 2014. Total dollars fell to $101.4m, a three-week low. One brokered deal was announced for $2m, a three-week low; and no bought deals were announced for the second time in four weeks.

The US Thanksgiving did not close Canadian markets, but it did seem to impact dealflow as no major deals were announced. Oil had a truly horrific week, falling to $70 a barrel on news that OPEC does not intend to alter crude production. Iron ore also had another miserable week, falling below $70 a ton for the first time since 2009. In better news, gold seems to have leveled off and, at least momentarily, stymied the fall that it has experienced since summer. As we head into the holiday season, it will be interesting to see if companies take advantage of raising last minute flow-through, as has happened in previous years, or if they close the doors and bunker down for a very cold winter.

Oreninc Index Stumbles

The Oreninc Index stumbled for the week ending November 20, 2014. Total dollars fell to $60.3m, a two-week low. One bought deal was announced for $15.1m and was also the only brokered deal, two-week lows for both categories.

By far the biggest deal of the week was Osisko Gold Royalties Ltd.’s (TSX:OR) acquisition of Virginia Mines Inc. (TSX:VGQ) for $479m. The all-stock deal combines two companies that are focused on gold royalties in Quebec. Metal prices for the week were positive, with gold having a fantastic week, almost reaching $1,200/oz. Nickel also had a price increase, reaching its highest this month on news the Indonesian government would continue their ban on unprocessed ore. Nothing changed for iron ore, as the metal continued its horrific slide downwards for 2014.

While not as bad as many weeks this autumn, one hopes something would have been built off of last week’s increased performance. Due to the US Thanksgiving Holiday this Thursday, the release of the November 27th Index will be delayed until Tuesday, December 2nd.

Oreninc Index Rebounds to Modest Levels

The Oreninc Index rebounded to modest levels for the week ending November 13, 2014. Total dollars jumped to $101.6m, a four-week high. Five brokered deals were announced for $73m, a four-week high; two brokered deals were announced for $70m, also a four-week high.

There were a couple of smaller deals for the week, with the Scorpio Mining (TSX:SPM) and U.S. Silver & Gold (TSX:USA) merger being the most significant transaction. The company will retain Scorpio Mining as their name. Commodity prices for the week were mostly flat. 

After a couple weeks of truly awful performance, this week’s financing activity is a welcome reprieve. Still, it’s hard to get too excited when the best week in a while is still below our threshold for a healthy financing market.

Oreninc Index Crashes to Lowest Level Since January

The Oreninc Index crashed to its lowest level since January for the week ending November 6, 2014. Total dollars announced fell to $11m, a YTD low. One brokered deal was announced for $0.7m, a 12-week low; no bought deals were announced for the second straight week. 

Deals for the week were a bit heavier, the largest being Antofagasta plc’s agreement to buy Duluth Metals Ltd. for C$96m, and with it the remaining 60% stake in the Twin Metals copper and nickel project in the United States. Metal prices for the week were gruesome, with iron ore falling to a 64-month low and gold falling to a four-and-a-half-year low.

There are not many ways to spin a week like this in a positive way, other than to say it can’t get that much worse.

Oreninc Index Stays at Same Level

The Oreninc Index stayed level for the week ending October 30, 2014. Dollars announced dropped to $32.9m, a 19-week low. Three brokered deals were announced for $10.8m, a six-week low; two bought deals were announced for $10m, a three-week low.

Deals were light with no major buyouts or mergers of note. One noticeable piece of news is gold’s crash as the US Federal Reserve’s Quantitative Easing program concluded. The metal fell to a four-year low, with no real optimism in sight. This crash, mixed with the awful season oil prices have had, provides some explanation for the poor performance of this autumn’s Index. It’s hard to imagine a short-term future where those two keep falling and the natural resource financing market has any sort of recovery.

Oreninc Index Crashes Back to Reality

The Oreninc Index crashed back down to reality for the week ending October 23, 2014. Total dollars announced dropped to $36.2m, a ten-week low. Three brokered deals were announced for $24.6m, a two-week low; two bought deals were announced for $24.1m, also a two-week low. Deals announced dropped to 16, a 41-week low.

Deals for the week were lead by Fortress Minerals Corp.’s (TSX-V:FST) purchase of Kinross Gold Corp.’s (TSX:K) Ecuadorian Fruta del Norte gold project for US$240m. Kinross took a $720m writedown on the project last year. 

After a solid performance last week, it is discouraging to see such a harsh week in the financing market. However, in a climate where the only thing holding up the Index’s performance is the large rogue deal, a week without any is bound to have an impact. With each passing week it is becoming clearer that fall 2014 is unlikely to bring any market rebound. 

Oreninc Index Blasts Off Over Thanksgiving

The Oreninc Index rocketed forward in the Thanksgiving-shortened week ending October 16, 2014. Total dollars announced launched to $249m, the most since March. The main driver of this week’s surprising turnaround was two offerings for over $50m. Including a $100m offering by Elkwater Resources and a $75m rights offering by ShaMaran Petroleum.  This week is most likely a flash in the pan; if the large deals were excluded, it would have been merely a two-week high. However, given that holiday weeks don’t usually include such significant raises, it is a positive sign that offerings are being announced. Expect a comedown next week, but that’s the nature of a volatile Index.

Oreninc Index Stumbles into Fall

The Oreninc Index stumbled for the week ending October 10, 2014. Total dollars announced dropped to $59.9m, a four-week low. Three brokered deals were announced for $42m, a three-week low. No bought deals were announced for the second time in four weeks. It seems that things are only getting worse in the financing market.

Deal making was active this week, with Lundin Mining (TSX:LUN) buying Freeport McMoRan (NYSE:FCX) 80% ownership interest in the Chilean Candelaria/Ojos del Salado mining operations for $1.8b in cash. Rumours also swirled of Glencore PLC (LON:GLEN) trying to merge with Rio Tinto Group (NYSE:RIO), though it appears Rio has rejected the reported all-stock offer made by Glencore. The deal would create the world’s largest publicly traded mining company.

While fundraising and equity numbers are increasingly getting worse and worse, the crazed deal making from this week is an interesting development. Maybe with companies out trying to make things happen, excitement will be spurred and investors will find value in what has been created. Nonetheless, it would not be wise to hold your breath in a market that has never looked worse during a time of the year that it generally looks its best.