:: Oreninc ::

13

August 2012

Advanced Explorations Releases First Feasibility Study

Oreninc Press

Advanced Explorations Inc. (AEI), a partner of Roche Bay plc, delivered the first feasibility study on the Roche Bay Magnetite Project on Friday. As the CEO of Roche Bay, I have spent 12 years of my life working on the Roche Bay Project. What follows is a commentary on the significance of the feasibility study, but keep in mind I have a biased point of view. Roche Bay and Oreninc are both actively involved in this project, so we urge you to verify the information and ideas I present here and form your own opinions.

Over the last few months, it seems as though very little of the news coming from junior companies has been viewed favourably by the general market, as evidenced by AEI’s share price crash. Overall, the natural resource capital market is at its lowest point in recent history. Unless a project delivers credit card-level IRR’s and a Capex that can also be financed on a charge card, there seems to be little demand for shares on the TSX-V.

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2892 Views

07

August 2012

Gold Prices vs. Construction Costs

Natural Resources

I am having a hard time balancing record gold prices with the rapid growth in capital costs. On one hand, record gold prices should be able to support new mine development, but on the other hand, the huge expansion of oil & gas development in Alberta and continued development in other Canadian industries have driven costs so high to a point where very little is feasible.

Looking at the stream of new company press releases, the mining industry has gone into a panic-and-shock stage of project development. It seems nothing will move forward unless construction has already been started.

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3327 Views

02

August 2012

Market Connectivity

Natural Resources

Financial markets have become more and more correlated. Everything seems to be trading up or down based on what the overall market is doing.

The current market connectivity is bad for junior mining stocks. Copper risk/reward used to be separated from aluminum, but today aluminum, copper, and Greek credit default swaps move up or down together. Investors currently have many more liquid options to buy volatility, so money is flowing to other investments.

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2222 Views

26

July 2012

Thoughts on Bankers

Natural Resources

I have spent a lot of time with senior bankers in the last month or so, and I have learned of their bias towards junior mining companies. Senior bankers do not like an economic model where 95-98 out of 100 company projects will not result in a mine, and the remaining 2-5 companies will not have the capital to build a mine for a good project.

At the $100 million to $1 billion level of check writing, banker types dislike the fat tail distribution of the junior sector. Many bankers finance mining companies without dropping down into the junior space.

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3231 Views

18

July 2012

Reduce, Reuse, Recycle (Chinese Style)

Natural Resources

China is going to start scrapping lots of things built before 1995. The first wave of Chinese construction went up quickly and cheaply, and many buildings will be torn down to make way for new, perhaps more tasteful buildings one to three times the size.

The old building only had one electric outlet per room, and the new one will have three. The old one had painted steel, but the new one will use stainless or galvanized steel. What can be recycled from the old will be recycled. The Chinese did not build the old to last forever, but the new one will be built with a 50-year life in mind, as long as the building manager does not take a bribe or three and go cheap on the rebar or electrical wire gauge.

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3191 Views

11

July 2012

An Economic Winter

Natural Resources

When an economic winter starts in springtime, it is impossible to determine when it will end. What one must remember is all winters end, but I expect the current one to be different. I expect many of the juniors that held through the last down trough with grit and drive to crumble. I also expect many banking teams will break up and regroup. Law firms will have to rethink how they bill clients, and do clients really want to pay for coffee? My bet is they would be happy to bring their own from Starbucks.

The fact is the 2008-2009 economic dip was horrible, but people had savings, lack of shock, and drive to survive it. The 2012-2013 recession is going to kill lots of companies because it will involve China ending the first round of its super cycle with a break and a consolidation. Plus we will see the end of the Euro as we know it.

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2290 Views

10

July 2012

Junior mine financing - time to run and hide

Natural Resources

Oreninc's Managing Director Benjamin Cox is featured in Mineweb's Metals Weekly Podcast this week! Click here to listen or to view a full transcription of Benjamin's interview with Geoff Candy about the financing...

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2031 Views

26

June 2012

Are junior mining equities just options?

Natural Resources

When you buy shares of Vale, BHP, or Freeport, you're buying direct production exposure to their mines. When you buy shares of Stornoway or Selwyn, you're buying option exposure to possible future production.

This derivative of possible future production is an option where the company will go into production if the project is good, the commodity stays strong, and the world doesn't end by the end of 2012. Owning junior equity shares creates cheap exposure to the commodity.

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3161 Views

29

March 2012

Unique Fundraising Pitfalls Trip Up Junior Explorer

Natural Resources

The following is a reproduction of an article featuring Oreninc and the ODL written byNancy E. Roth, Senior EditorofFuel Cycle Week, the premier nuclear business newsletter. The original article can be foundhere.

Vancouver, Washington-based Oreninc, has compiled a comprehensive database of Toronto Stock Exchange and TSX Venture Exchange junior resource-company financings. Each issue FCW displays a list of uranium-related fundraisings that have opened and closed over the course of the week, as tracked by the Oreninc Deal Log (see p. 7).

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2475 Views

15

March 2012

The Facebook IPO

General Market

Facebook is paying 1% in fees for its proposed IPO (Initial Public Offering), and the underwriters are expected to make between $50 million and $100 million to take the company public. In Canadian mining finance terms, that is a punch in the gut. The average deal we tracked in 2011 paid underwriters 9% in fees, 6% in cash and 3% in options. If Facebook were a mining company completing an IPO, the profit from the offering would have rocked some banker's world.

Some of the discount in fees results from Facebook being a status IPO; every bank wanted the deal because Facebook is a household name the world over. Some of the discount is also due to size. The deal is so large that even lower fee levels pay well. In general, however, the huge fees junior mining companies pay versus other companies elsewhere in the world reinforces the pain of the mining finance industry.

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2434 Views

Oreninc Blog

Oreninc Blog

Oreninc.com returns from artificial hibernation with new management team and focus

Advanced Explorations Releases First Feasibility Study

Gold Prices vs. Construction Costs

Market Connectivity

Thoughts on Bankers

Reduce, Reuse, Recycle (Chinese Style)

An Economic Winter

Junior mine financing - time to run and hide

Are junior mining equities just options?

Unique Fundraising Pitfalls Trip Up Junior Explorer

The following is a reproduction of an article featuring Oreninc and the ODL written byNancy E. Roth, Senior EditorofFuel Cycle Week, the premier nuclear business newsletter. The original article can be foundhere.

The Facebook IPO

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