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Oreninc index down as total dollars decrease

Commentaries & Views

Last Week: 70.80 (Updated)

This week: 57.86

The Oreninc Index fell in the week ending June 26th, 2020 to 57.86 from an updated 70.80 a week ago as financings fall.

The COVID-19 virus global death toll has passed 500,000 and more than 10 million cases reported worldwide, with more than 2.5 million of those in the US with a resurgence of cases in many states which eased-off restrictions – such as Texas, Florida, California. Elsewhere in the world, states that seemed to have successfully dealt with the pandemic such as China, Germany, Italy, South Korea and other countries are facing a second wave of outbreaks helped push gold futures to a 7.5-year high Wednesday of $1,796/oz, as investors continued to pile into gold ETFS such as the GLD SPDR.

Economic data during the week was largely negative with the International Monetary Fund stating economic activity in 2020 is likely to decline by almost 5%, which is almost double its April prediction.

In the US, the economy shrank 4.8% in the first quarter according to the US Commerce Department, in line with expectations, and another 1.48 million people filed for first-time jobless claims in the week to Saturday according to the US Labor Department, the 14th week in a row the number has surpassed the 1 million mark. The four-week moving average fell by 160,750 to 1.62 million while continuing jobless claims fell 767,000 to a seasonally adjusted 29.5 million. However, the US Commerce Department also said durable-goods orders rose 15.8% in May to $194.4 billion in May, more than forecast, led by transportation equipment.

On the geopolitical front, tensions between China and India are rising in their disputed Himalayan border amid allegations of encroachment and small engagements in the Galwan Valley. China appears to have added new structures in the Valley, which India says is its territory.

On to the money: brokered continued strong as the total raises announced fell to $74.91 million, a two-week low, which included five brokered financings for $37.1 million, a four-week high, and four bought deal financings for $30.1 million, a four-week high. The average offer size increased to $2.2 million, a four-week high, while the number of financings fell to 34.

Gold continued to strengthen as it closed up at $1,771/oz from $1,743/oz a week ago. The yellow metal is up 16.74% so far this year. The US dollar index lost a smidgen as it closed down at 97.43 from 97.62 last week. The VanEck managed GDXJ continued to grow as it closed up at $47.39 from $44.79 a week ago. The index is now up 12.14% so far in 2020. The US Global Go Gold ETF also closed up at $19.92 from $19.16 a week ago. It is up 13.44% so far in 2020. The HUI Arca Gold BUGS Index closed up at 280.22 from 266.79 last week. The SPDR GLD ETF inventory continued to increase, closing the week up at 1,178.9 tonnes from 1,159.31 tonnes last week.

In other commodities, Silver continued to grow as the spot price closed up at $17.81/oz from $17.62/oz a week ago. Copper continued to grow as it closed up at $2.67/lb from $2.62/lb a week ago. Oil’s recovery took a pause as WTI closed down at $38.49 a barrel from $39.75 a barrel a week ago.

The Dow Jones Industrial Average pared back as it closed down at 25,015 from 25,871 a week ago. Canada’s S&P/TSX Composite Index closed up at 15,188 from 15,474 the previous week. The S&P/TSX Venture Composite Index closed up at 598.74 from 567.20 last week.

Summary

  • Number of financings decreased to 34.

  • Five brokered financings were announced this week for $37.1 million, a four-week high.

  • Four bought-deal financings were announced this week for $30.1 million, a four-week high.

  • Total dollars fell to $74.91 million, a two-week low.

  • Average offer upped to $2.2 million, a four-week high.

Financing Highlights

Osino Resources (TSXV:OSI) opened a bought deal to raise $15.4 million.

  • 14M units @ $1.10.

  • Each unit consists of one share and half a warrant exercisable @ $1.50 for a year.

  • Syndicate of underwriters led by Stifel GMP

  • Proceeds will fund exploration at its projects in Namibia.

Major Financing Openings

  • Osino Resources (TSXV:OSI) opened a $15.4 million offering underwritten by a syndicate led by Stifel GMP on a bought deal basis. Each unit includes half a warrant that expires in a year. The deal is expected to close on or about July 14th.

  • Southern Silver Exploration (TSXV:SSV) opened a $7 million offering underwritten by a syndicate led by Red Cloud Securities on a best efforts basis. Each unit includes half a warrant that expires in 2.5 years. The deal is expected to close on or about July 15th.

  • Freeman Gold (CSE:FMAN) opened a $6.5 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis. The deal is expected to close on or about July 15th.

  • Gold Terra Resource (TSXV:YGT) opened a $6.3 million offering on a best efforts basis. The deal is expected to close on or about July 14th.

Major Financing Closings

  • O3 Mining (TSXV:OIII) closed a $40.21 million offering underwritten by a syndicate led by Cormark Securities on a bought deal basis. Each unit included half a warrant that expires in two years.

  • Luminex Resources (TSXV:LR) closed a $20.62 million offering underwritten by a syndicate led by Haywood Securities on a bought deal basis.

  • Unigold (TSXV:UGD) closed a $6 million offering on a best efforts basis. Each unit included half a warrant that expires in a year.

  • G2 Goldfields (TSXV:GTWO) closed a $5 million offering on a best efforts basis.
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