ORENINC INDEX soars on year-end flow-through deals

ORENINC INDEX – Monday, December 11th, 2017

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Last week index score: 65.53

This week: 120.11

 

Castle Silver Resources (TSXV:) reported that an initial work program at its Beaver property, a former silver producer in Cobalt, Ontario, Canada returned high-grade cobalt from three composite samples.

NuLegacy Gold (TSXV:NUG) permits Western Slope for drilling.

LiCo Energy Metals (TSXV:LICO) received C$1.2 million from the exercise of warrants and options.

 

The Oreninc Index almost doubled in the week ending December 8th, 2017 to 120.11 from 65.53 as the approach of the end of year brought a slew of flow-through deals.

With tax loss selling season in full swing, and a strong dollar, gold fell to a four-month low this past week and silver is almost at a five-month low. Most of the world’s stock markets continue to be at near record levels or multi-year highs.

With the first gestures towards rapprochement between North Korea and the United States, tensions in East Asia show signs of easing. Unfortunately, in the Middle East, US President Donald Trump came through on an election promise and broke with decades of international effort to unilaterally declare Jerusalem the true capital of Israel. This sparked violent protests in the Gaza Strip and across the occupied West Bank and the opprobrium of the international community.

Total fund raises announced more than tripled to C$342.9 million, a 292-week high, which included twelve brokered financing for C$234.7 million, a 75-week high, and three bought-deal financings for C$107.9 million, a 45-week high. The average offer size also tripled to C$6.7 million, a 47-week high, whilst the total number of financings announced stayed level at 51.

Gold took a plunge to close at US$1,248/oz from US$1,280/oz a week ago. Gold is now up 8.8% since the start of the year. The van Eck managed GDXJ followed suit and closed down at US$30.33 from US$31.75 last week. It is now down 11.26% so far in 2017. The US Global Go Gold ETF showed a similar chart to close at US$11.81 from US$12.27 last week. The SPDR GLD ETF saw some selling to close at 842 tonnes from 848 tonnes a week ago.

In other commodities, silver also took a beating to close at US$15.86/of from US$16.44 a week ago. Copper also took a hit to close under the US$3/lb mark at US$2.97/lb from US3.09/lb last week. Oil also slipped to close down at US$57.36 a barrel from US$58.36 a barrel a week ago.

The Dow Jones Industrial Average returned to growth mode to close at 24,329 from 24,231 last week. Canada’s S&P/TSX Composite Index also saw growth to close at 16,096 from 16,038 the previous week. The S&P/TSX Venture Composite Index also saw growth to close at 792.96 from 789.00 the previous week.

 

Summary:

  • Number of financings stayed level at 51, a 35-week high.
  • 12 brokered financings were announced this week for C$234.7m, a 75-week high.
  • Three bought-deal financings were announced this week for C$107.9m, a 45-week high.
  • Total dollars jumped to C$342.9m, a 292-week high.
  • Average offer size also grew to C$6.7m, a 47-week high.

 

 Financing Highlights

Atalaya Mining (TSX:AYM) announced an equity raise of up to £39 million raise of 23.3 million shares @ £1.67, of which the company placed 18.6 million shares @ £1.67 for gross proceeds of £31 million.

  • Proceeds are to fund the 15Mtpa expansion at its Riotinto project in Spain to upgrade processing facilities to increase copper production to 50,000–55,000 tonnes per year.
  • Placement with BMO Capital Markets and Canaccord Genuity were joint bookrunners

 

Major Financing Openings:

  • Atalaya Mining (TSX:AYM) opened a C$66 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 12th.
  • Alphamin Resources (TSXV:AFM) opened a C$89 million offering underwritten by a syndicate led by Sprott Capital Partners on a best efforts basis. Each unit includes half a warrant that expires in 36 months.
  • Alphamin Resources (TSXV:AFM) opened a C$53 million offering on a strategic deal basis. Each unit includes half a warrant that expires in 36 months.
  • Largo Resources (TSXV:LGO) opened a C$25 million offering on a best efforts Each unit includes half a warrant that expires in 60 months. The deal is expected to close on or about December 7th.

 

Major Financing Closings:

  • Reunion Gold (TSXV:RGD) closed a C$12 million offering on a strategic deal basis.
  • Cartier Resources (TSXV:ECR) closed a C$4 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal
  • Corvus Gold (TSX:KOR) closed a C$25 million offering on a best efforts basis.
  • Corex Gold (TSXV:CGE) closed a C$33 million offering on a best efforts basis.

 

Company news

Castle Silver Resources (TSXV:) reported that an initial work program at its Beaver property, a former silver producer in Cobalt, Ontario, Canada returned high-grade cobalt from three composite samples.

  • The three composite samples averaged 4.68% Co, 46.9g/t Ag, 3.09% Ni & 0.08g/t Au
  • To better reflect its focus on cobalt, Castle Silver Resources will propose a name change at its upcoming AGM in February.

 

Analysis

The sampling results highlight the cobalt potential of the Beaver property and add to the overall cobalt exploration story of the company.

 

NuLegacy Gold (TSXV:NUG) permits Western Slope for drilling.

  • With permits received for Western Slope, a road is now construction with two holes to be drilled before winter and the remainder in spring 2018.
  • The 4,900m, 16-hole, fall drilling program is two-thirds complete. Assays are expected by late December 2017/early January 2018.

 

Analysis

Western Slope is one of the drill targets generated by the company during its 2017 exploration program. The target—to the west of the company’s Iceberg deposits—has not previously been drilled. The company believes the favourable gold horizon is protected by basalt cover and therefore has not eroded.

 

LiCo Energy Metals (TSXV:LIC) received C$1.2 million from the exercise of warrants and options.

  • This amount, in addition to the recently closed non-brokered private placement offering of C$960,000, has put C$2.2 million into its treasury since November 9th.
  • LiCo will allocate C$640,000 to a future Canadian exploration program in accordance with its flow through spending requirements.
  • The 2018 Canadian exploration program will be finalised once the final assay results are received from the diamond drilling programs at the Bucke and Teledyne properties.

 

 


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