Last week index score: 45.59 (updated)

This week: 37.75

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The Oreninc Index fell in the week ending April 27th, 2018 to 37.75 from an updated 45.59 a week ago as the number of deals fell despite some broker action returning.

A calmer and less volatile week all round with the presidents of North and South Korea meeting for the first time in decades, thawing tensions over the north’s nuclear ambitions, whilst in the US, president Donald Trump eased his position on sanctions against Russian aluminium producer Rusal. Maybe spring is in the air and the world is feeling more positive.

Another range-bound week for gold, this time ending in negative territory as the US dollar strengthened, although there are signs that gold stocks are starting to strengthen.

On to the money: total fund raises announced more than quadrupled to C$96.3 million, a four-week high, which included one brokered financing, a four-week low, and one bought deal financing, also a four-week low. The average offer size also more than quadrupled to C$4.8 million, a four-week high. However, the number of financings decreased to 20, a four-week low.

Gold closed down at US$1,324/oz from US$1,336/oz a week ago. Gold is now up 1.63% this year. Meanwhile, the US dollar index continued to strengthen and closed up at 91.54 from 90.31 a week ago. The van Eck managed GDXJ gave up ground and closed down at US$33.03 from US$33.49 last week. The index is down 3.22% so far in 2018. The US Global Go Gold ETF also fell to close down at US$12.99 from US$13.04 a week ago. It is down 0.12% so far in 2018. The HUI Arca Gold BUGS Index closed down at 182.04 from 184.18 last week. The SPDR GLD ETF saw a growth week as its inventory grew to 871.20 from 865.89 tonnes where it had been for nine-days straight.

In other commodities, silver’s recent growth spurt deflated and closed down at US$16.51/oz from US$17.11/oz a week ago. Copper also gave up a lot of ground as it closed down at US$3.06/lb from US$3.15/lb last week. Oil consolidated despite a slight loss on the week to close down at US$68.10 a barrel from US$68.40 a barrel a week ago.  

The Dow Jones Industrial Average lost some ground and closed down at 24,311 from 24,462 last week. Canada’s S&P/TSX Composite Index put in a strong growth week as mining stocks showed growth to close at 15,668 from 15,484 the previous week. The S&P/TSX Venture Composite Index closed down at 783.76 from 804.96 last week.

Summary:

  • Number of financings decreased to 20, a three-week low.
  • One brokered financing was announced this week for C$15m a three-week low.
  • One bought-deal financing was announced this week for C$15m, a three-week low.
  • Total dollars nearly doubled to C$96.3m, a three-week high.
  • Average offer size grew to C$4.8m, a three-week high.

Financing Highlights

SilverCrest Metals (TSX-V: SIL) announced a C$15 million bought deal financing

Syndicate of underwriters led by PI Financial and Cormark Securities for 7.1 million shares @ C$2.10.

  • 15% over-allotment Option.
  • Net proceeds will be used to continue exploration and drilling to deliver an updated resource estimate and maiden Preliminary Economic Assessment for the Las Chispas project in Sonora. Mexico.

Major Financing Openings:

  • Africa Energy (TSX-V: AFE) opened a C$57.98 million offering on a best efforts basis. The deal is expected to close on or about May 4, 2018.
  • Silvercrest Metals (TSX-V: SIL) opened a C$15 million offering underwritten by a syndicate led by PI Financial on a bought deal basis. The deal is expected to close on or about May 18, 2018.
  • Pacton Gold (TSX-V: PAC) opened a C$4 million offering on a best efforts basis.  Each unit includes a warrant that expires in 36 months. The deal is expected to close on or about May 22, 2018.
  • Max Resource (TSX-V: MXR) opened a C$3.75 million offering on a best efforts basis. Each unit includes half a warrant that expires in 24 months.

Major Financing Closings:

  • Nemaska Lithium (TSX-V: NMX) closed a C$99.08 million offering on a best efforts basis.
  • Trilogy Metals (TSX-V: TMQ) closed a C$31.48 million offering underwritten by a syndicate led by Cantor Fitzgerald Canada on a bought deal basis.  
  • Stina Resources (TSX-V: SQA) closed a C$12.5 million offering on a best efforts basis. Each unit included half a warrant that expires in 36 months.  
  • Ashanti Gold (TSX-V: AGZ) closed a C$2.64 million offering on a best efforts basis.

Company News

Prospero Silver (TSX-V: PSL) provide an update on planned exploration work on its Mexican projects for 2018.

  • The key objective is to complete first-pass, proof-of-concept drill testing of three projects in the Altiplano belt of northern Mexico: Bermudez, Buenavista and Trias. Neither Trias or Bermudez have been drilled before.
  • About 6,000m of diamond drilling is planned.
  • A 4th hole for Pachuca SE project may be drilled once drilling is complete at the projects above.

Analysis

Having recently announced a fund raise, the work plan shows that Prospero will continue to drill test the targets it has identified via its geological hypothesis for discovering large, blind silver deposits. Whilst the news release did not explicitly state that its strategic partner Fortuna Silver (TSX:FVI) would co-fund this exploration program, that seems likely given the technical success of the 2017 exploration program and that Fortuna has yet to select a project to joint-venture under its strategic agreement with Prospero.

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February 2018 saw 84 deals close in the Canadian financial markets for an aggregate C$367.0 million at an average of $4.5 million, down 15.2% over January 2018 when 105 deals closed for an aggregate C$432.8 million at an average of $4.32 million.

February saw 14 brokered deals close for an aggregate $250.0 million at an average of $17.9 million. This was up 54.3% from the nine brokered deals in January that closed for an aggregate $162.0 million at an average of $18.0 million.  

Within the brokered deals, six bought deals closed in February for an aggregate of $136.7 million deal at an average $22.8 million, an increase of 29.1% over the five bought deals that closed in January for an aggregate of $105.9 million deal at an average $21.2 million.

95 deals opened in February

The top ten deals by size closed in February totaled $230.1 million with gold leading the field taking three spots of the top four spots and five of the top ten. Battery metals cobalt and lithium took three spots.

The top ten deals by size closed in January totalled $241.3 million with graphite, copper and tin leading the field. Gold took three spots of the top ten with cobalt also figuring.

February saw 56 gold deals close for $229.2 million at an average of $3.4 million, up 119.1% in total value terms from the $104.6 million raised in 44 gold deals in January at an average of $2.3 million. The top ten gold deals in February totalled $184.7 million, some 76.5% of the total.

Base metals accounted for $73.6 million of the funds raised in February, some 30.5% of the total, with the top ten deals accounting for $36.7 million with zinc and copper featuring heavily.

Battery metals accounted for $74.8 million of the funds raised in January, some 31.0% of the total and where the top ten battery raises brought in $73.6 million with three cobalt, five lithium one copper and one graphite raises.

#1 Torex Gold $61.7 million

Torex Gold Resources (TSX:TXG) closed a C$61.7 million offering underwritten by a syndicate led by BMO Capital Markets on a best efforts basis.

#2 Orla Mining $30.8 million

Orla Mining (TSXV: OLA) closed a C$30.8 million offering underwritten by a syndicate led by GMP Securities on a bought deal basis. Each unit included half a warrant that expires in 36 months.

#3 eCobalt Solutions $29.9 million

eCobalt Solutions (TSX: ECS) closed a C$29.9 million offering underwritten by a syndicate led by TD Securities on a bought deal basis. Each unit included half a warrant that expires in 18 months.

About Oreinc.com:

Oreninc.com is North America’s leading provider of relevant financing information in the junior commodities space. Since 2011, the company has been keeping track of financings in the junior mining as well as oil and gas space. Logging all relevant deal and company information into its proprietary database, called the Oreninc Deal Log, Oreninc quickly became the go-to website in the mining financing space for investors, analysts, fund managers and company executives alike.

The Oreninc Deal Log keeps track of over 1,400 companies, bringing transparency to an otherwise impenetrable jungle of information. The goal is to increase the visibility of transactions and to show financings activity in a digestible format. Through its daily logging activities, Oreninc is in a position to pinpoint momentum changes in the markets, identify which commodities are trending and which projects are currently receiving funding.

Website:  www.oreninc.com

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