Oreninc Index: December 16, 2019

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ORENINC INDEX up as deals and dollars fall

 

ORENINC INDEX – Monday, December 16th 2019

North America’s leading junior mining finance data provider

 

Last Week: 78.57

This week: 43.92

The Oreninc Index fell in the week ending December 13th, 2019 to 43.92 from 78.57 a week ago as deals and dollars fell.

A big week for news as the US and China reached an agreement on the first phase of a trade deal under which the Asian nation committed to increase its purchases of US agricultural, energy and manufactured goods among others. As such, a new raft of tariffs that the US was set to impose on December 15th on US$160 million of goods including laptops, toys and video games was cancelled. However, the existing 25% tariffs would remain, and the 15% tariffs would be halved to 7.5%.

In the UK, incumbent Conservative Prime Minister Boris Johnson won a large majority in the general election as voters responded to his campaign message of completing the UK withdrawal from the European Union. The Conservatives won 364 of the 650 seats in the House of Commons, with a majority of 74, its best election result since Margaret Thatcher was victorious in 1987. It was also a good night for the Scottish Nationalist Party.

The opposition Labour party saw its worse electoral performance in 84 years as it obtained 203 seats, losing many long-held seats as voters rejected leader Jeremy Corbyn, who said he would resign at some point.

The UK pound gained strongly against the Euro and the share prices of UK utilities climbed now the threat of nationalisation by Corbyn has been removed.

Gold had a good week on the back of weak US economic data such as the Producer Price Index report being lower than expected and the US Labour Department reporting jobless claims increasing by 49,000 to 252,000, rising more than what was forecasted. Earlier in the week, the US Federal Resource Open Market Committee made no change to US interest rates (1.5-1.75%) and indicated there are currently no plans for further rate-cut in 2020. New European Central Bank (ECB) president Christine Lagarde also helped the case for gold by stating the ECB will continue its bond-buying program.

Oil company Saudi Aramco finally had its initial public offering raising $25.6 billion by listing 1.5% of its shares, giving it a market valuation of $1.88 trillion.

 

On to the money: Total fund-raises announced more than halved to $54.69 million, a two-week low, which included two brokered financings for $8.14 million, a two-week low, and one bought-deal financing for $3.14 million, a two-week low. The average offer size fell to $1.6 million, a five-week high, while the number of financings fell to 34.

Gold saw gains as the spot price closed up at US$1,476/oz from $1,460/oz a week ago. The yellow metal is up 15.11% so far this year. The US dollar index closed the week down again at 97.17 from 97.70. The VanEck managed GDXJ closed up at US$39.33 from $38.03 a week ago. The index is now up 30.15% so far in 2019. The US Global Go Gold ETF closed up at US$16.31 from $16.00 a week ago. It is up 42.94% so far in 2019. The HUI Arca Gold BUGS Index closed up at 225.74 from 217.34 last week. The SPDR GLD ETF saw its inventory reduce a smidge as it closed down at 886.22 tonnes from 886.23 tonnes a week ago.

In other commodities, silver closed up at US$16.93/oz from $16.58/oz a week ago. The copper price saw growth again as it closed up at US$2.78/lb from $2.72/lb last week. The oil price also saw strength as WTI closed up at US$60.07 a barrel from $59.20 a barrel a week ago.

The Dow Jones Industrial Average had a better week as it closed up at 28,135 from 28,015 a week ago. Canada’s S&P/TSX Composite Index also closed up at 17,003 from 16,996 the previous week. The S&P/TSX Venture Composite Index closed up again at 540.53 from 537.82 last week.

Summary

·       Number of financings decreased to 34.

·       Two brokered financings were announced this week for $8.14 million, a two-week low.

·       One bought-deal financing was announced this week for $3.14 million, a two-week low.

·       Total dollars fell to $54.69 million, a two-week low.

·       Average offer size reduced to $1.6 million, a five-week low.

 

Financing Highlights

Northern Dynasty Minerals (TSX:NDM) opened a US$13.5 million offering.

·   36.5 million shares @ US$0.37.

·   Underwritten by a syndicate led by Cantor Fitzgerald Canada, as lead underwriter and sole book-runner, and including BMO Nesbitt Burns, H.C. Wainwright & Co and TD Securities.

·   The offering is expected to close on or about December 18th.

·   Concurrent non-brokered private placement of 13.5 million shares at US$0.37 for proceeds of US$5 million.

·   Proceeds will enable the company to continue work necessary to support timely completion of the EIS permitting process for the Pebble Project in Alaska, USA in 2020.

Major Financing Openings

·       Northern Dynasty Minerals (TSX:NDM) opened a $18.09 million offering on a best efforts basis.

·       Gowest Gold (TSXV:GWA) opened a $6 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years. The deal is expected to close on or about December 23rd.

·       Terrax Minerals (TSXV:TXR) opened a $5 million offering underwritten by a syndicate led by BMO Capital Markets on a best efforts basis. The deal is expected to close on or about December 27th.

·       Red Pine Exploration (TSXV:RPX) opened a $4 million offering on a best efforts basis. Each unit includes half a warrant that expires in two years.

Major Financing Closings

·       Probe Metals (TSXV:PRB) closed a $17 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal basis. Each unit included half a warrant that expires in two years.

·       Lion One Metals (TSXV:LIO) closed a $11.5 million offering on a best efforts basis. Each unit includes a warrant that expires in 18 months.

·       GT Gold (TSXV:GTT) closed a $8.25 million offering on a strategic deal basis.

·       Osisko Metals (TSXV:OM) closed a $7 million offering on a best efforts basis.

 

 

 

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