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Oreninc index down as average offer size falls

Commentaries & Views

Last Week: 116.32 (Updated)

This week: 54.36

The Oreninc Index increased in the week ending January 26th, 2021 to 54.36 from 116.32 (updated)  a week ago as average offer size falls.

The COVID-19 virus global death toll surpassed 2.2 million with almost 103 million cases reported worldwide.

This morning spot silver price climbed as much as 11%, briefly hitting $30.03 to register its highest level since 2013. The sharp move higher reflected the biggest move for silver futures since at least 2013 and extended gains for silver and silver-related equities late last week.

The spike in demand for silver appears to be related to retail traders in the Reddit forum WallStreetBets, which has helped drive trading activity in heavily shorted stocks like GameStop and AMC Entertainment in recent weeks.

Keep an eye on next week’s index to see if the silver mining stocks will try to raise additional capital at these elevated silver prices.

On to the money: the aggregate financings announced increased to $281 million, a 23-week high, with 14 new brokered financings and 13 new bought-deal financings announced. The average offer size increased to $7 million, a 123-week  high, and the number of financings increased to 40.

Gold closed the week lower at $1,850/oz from $1,856/oz a week ago. The US dollar index closed higher at 90.58 from 90.24 a week ago.

The widely followed junior mining index, the VanEck managed GDXJ, closed the week down at $50.08 from $50.34 a week ago. HUI Arca Gold BUGS Index, which follows the major gold miners, closed the week lower at 283.63 from 288.84 last week. The SPDR GLD ETF inventory closed the week down at 1,160.13 tonnes, or 37.29 million ounces, from 1,173.25 tonnes last week.

In other commodities, Silver closed the week higher at $26.91/oz from $25.55/oz a week ago. Copper closed the week at $3.55/lb from $3.62/lb a week ago. Oil went down as WTI closed down at $52.20 a barrel from $52.27 a barrel a week ago.

The Dow Jones Industrial Average closed down at 29,982 from 30,996 a week ago. Canada’s S&P/TSX Composite Index closed down at 17,337 from 17,845 the previous week. The S&P/TSX Venture Composite Index closed up at 947.43 from 908.00 a week ago.

Summary:

  • Number of financings decreased to 32.

  • Two brokered financings were announced this week for $33m, a 3-week low.

  • Two bought-deal financings were announced this week for $33m, a 3-week low.

  • Total dollars decreased to $91m, a 3-week low.

  • Average offer lowered to $2.9m, a 4-week low.

Major Financing Openings:

  • Argonaut Gold Inc. (TSX:AR) opened a $23 million offering underwritten by a syndicate led by Cormark Securities Inc. on a bought deal basis.    The deal is expected to close on or about Fbruary 11, 2021.

  • Alpha Lithium Corp. (TSX.V:ALLI) opened a $10.04 million offering underwritten by a syndicate led by Echelon Wealth Partners Inc. on a bought deal basis.  Each unit includes 1 warrant that expires in 24 months. The deal is expected to close on or about February 16, 2021.

  • Salazar Resources Ltd. (TSX-V:SRL) opened a $6.5 million offering on a best efforts basis.    

  • INV Metals Inc. (TSX:INV) opened a $6.1 million offering on a best efforts basis.    The deal is expected to close on or about January 28, 2021.

Major Financing Closings:

  • Orezone Gold Corporation (TSX:ORE) closed a $73.75 million offering underwritten by a syndicate led by Canaccord Genuity Corp. on a bought deal basis. The deal is expected to close on or about January 28, 2021.

  • Aurcana Silver Corp. (TSX-V:AUN) closed a $34.5 million offering on a best efforts basis.  Each unit includes 1 warrant that expires in 36 months.

  • Alexco Resource Corp. (TSX:AXR) closed a $11.7 million offering underwritten by a syndicate led by Cormark Securities Inc. on a bought deal basis. The deal is expected to close on or about January 28, 2021.

  • Arizona Metals Corp. (TSX-V:AMC) closed a $10 million offering on a best efforts basis.
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