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Oreninc Index Up As Financings Break Through C$100 Million

Commentaries & Views

ORENINC CEO Kai Hoffman was something of a media celebrity recently week recording TV interviews with Kitco and BNN Bloomberg. Here are the video links:

https://www.kitco.com/news/video/show/Mines--Money-New-York/2396/2019-05-10/Its-Just-Been-Terrible---Keynote-Speaker-Says-About-Gold-Mining#_48_INSTANCE_puYLh9Vd66QY_=https%3A%2F%2Fwww.kitco.com%2Fnews%2Fvideo%2Flatest%3Fshow%3DMines--Money-New-York
https://www.bnnbloomberg.ca/commodities/video/junior-miners-competing-for-funding-with-emerging-cannabis-sector-oreninc~1679609

Last week index score: 43.66 (updated)
This week: 50.35

Silver Spruce Resources (TSXV:SSE) announced results and conclusions from the recently completed field program at its Pino de Plata project in western Chihuahua, Mexico.

The Oreninc Index continued to bounce back the week ending May 10th, 2019 to 50.35 from an updated 43.66 a week ago as financings broke through the C$100 million mark.

A slightly better week for gold as the clouds of an approaching trade war between the USA and China continued to gather as president Donald Trump boosted tariffs on US$200 billion of Chinese imports from 10% to 25% as he seeks to strongarm concessions out of China as trade talks continue.

Elsewhere, North Korea continued to undertake rocket tests and the apparent threat of Iran has required the USA to send a carrier fleet, Patriot Missile system and B52 bombers to the Middle East. Yet despite all this apparent geopolitical risk, gold barely shrugged its shoulders.

This week also saw the long-awaited IPO of ride hire service Uber (NYSE:UBER). It raised US$8.1 billion selling 180 million shares at $45 each, towards the bottom of its forecast range and initially valuing it at around $80 billion. But it lost 7% the next day, dropping its value to $70 billion.

A great week for football (soccer) fans as the semi finals of Europe’s two main competitions produced four stunning games, with English teams winning all four. This is the first time ever that one country has provided all four finalists.

On to the money: total fund raises announced increased to C$105.0 million, a three-week high, that included two brokered financings and for C$32.8 million, an eight-week high, and no bought-deal financings. The average offer size increased to C$3.9 million, an eleven-week high, whilst the number of financings decreased to 27 from an updated 28, a two-week low.

Gold’s fight-back took another step as it closed up at US$1,286/oz from US$1,279/oz a week ago. The yellow metal is up 0.28% so far this year. The US dollar index again pulled back a little as it closed down at 97.33 from 97.52 last week. The Van Eck managed GDXJ continued to sell down as it closed down a smidge at US$28.38 from US$28.41 a week ago. The index is now down 6.09% so far in 2019. The US Global Go Gold ETF eked out a small gain as it closed up at US$11.70 from US$11.56 last week. It is up 2.54% so far in 2019. The HUI Arca Gold BUGS Index also closed down at 147.78 from 152.99 last week. The SPDR GLD ETF continued to sell off as its inventory closed down at 733.23 tonnes from 740.82 tonnes a week ago. It was last at these inventory levels in October 2018.

In other commodities, silver continued to lose ground as it closed down at US$14.79/oz from US$14.94/oz a week ago. Copper also continued to shed cents as it closed down at US$2.77/lb from US$2.81/lb a week ago. Oil came off a few cents as WTI closed down at US$61.66 a barrel from US$61.94 a barrel a week ago.
The Dow Jones Industrial Average took a hit as it closed down at 25,942 from 26,504. Canada’s S&P/TSX Composite Index also closed down at 16,297 from 16,494 the previous week. The S&P/TSX Venture Composite Index also closed down at 599.48 from 606.42 last week.

Summary

  • Number of financings decreased to 27 from an updated 28, a two-week low.

  • 2 brokered financings were announced this week for $32.8m, an eight-week high.

  • No bought-deal financings were announced this week, a two-week low.

  • Total dollars increased to $105.0m, a two-week high.

  • Average offer up to $3.9m, an eleven-week high.

Financing Highlights

Nevada Copper (TSX:NCU) opened a C$40.02 million offering underwritten by a syndicate led by National Bank Financial and RBC Capital Markets acting as joint book-runners, and including Scotiabank as co-lead underwriter on a best efforts basis.

  • The net proceeds will be used to partially fund a cost overrun facility, satisfy the KfW IPEX-Bank facility’s minimum equity to debt funding requirement and cover a portion of the costs associated with the financing arrangements, construction and ramp-up of the Pumpkin Hollow in Nevada, USA.

  • Part of a financing package that also includes US$115 million credit agreement with KfW IPEX-Bank to provide a long-term senior debt facility supported by a loan guarantee issued by the Federal Republic of Germany

  • US$35 million working capital facility with Concord Resources and offtake agreements with Aurubis and Concord.

  • US$26.4 million cost overrun facility

Major Financing Openings

  • Nevada Copper (TSX:NCU) opened a C$40.02 million offering underwritten by a syndicate led by National Bank Financial on a best efforts basis.

  • GT Gold (TSXV:GTT) opened a C$17.6 million offering on a strategic deal basis.    

  • Adventus Zinc (TSXV:ADZN) opened a C$12.1 million offering on a strategic deal basis.

  • Generation Mining (CSE:GENM) opened a C$8.0 million offering underwritten by a syndicate led by Canaccord Genuity on a best efforts basis.

Major Financing Closings

  • BeMetals (TSXV:BMET) closed a C$6.25 million offering on a best efforts basis.

  • Victory Metals (TSXV:VMX) closed a C$3.62 million offering on a strategic deal basis.    

  • Eastmain Resources (TSX:ER) closed a C$3.18 million offering underwritten by a syndicate led by Laurentian Bank Securities on a bought deal basis.

  • Defiance Silver (TSXV:DEF) closed a C$2.57 million offering on a best efforts basis. Company News

Silver Spruce Resources (TSXV:SSE) announced results and conclusions from the recently completed field program at its Pino de Plata project in western Chihuahua, Mexico.

  • Expanded areas of intrusive-related alteration and mineralization to 50+ hectares

  • Confirmed high silver grades present on surface at El Terrero and Gossan areas

  • Added three new vein targets at La Perla, Santa Clara and El Muro vein systems

  • Refined drill collar locations and orientations to optimize targeting

  • Company is now prepared to start the Phase I drilling

Analysis

Work at Pino de Plata was directed towards understanding the mineralization in order to further refine the upcoming drilling program, with eight targets identified for drill testing, each of which has outcropping mineralization. Silver Spruce is permitted to drill 30 holes during the phase I and phase II drill programs, with 12 holes for 2,000m planned for phase I. The amount of geological information collected to date means the company is quietly confident of obtaining positive results and drilling will provide a stream of news over the coming months.

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