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ORENINC INDEX falls as trade war looms

 

 

 

 

 

ORENINC INDEX – Monday, April 9th 2018

 

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ORENINC MINING DEAL CLUB

 

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Last week index score: 45.10 (updated)

 

 

This week: 33.86

 

 

NuLegacy Gold (TSXV:NUG) appointed John Budreski to its board.

 

 

The Oreninc Index fell in the week ending April 6th, 2018 to 33.86 from an updated 45.10 a week ago as the lack of brokered action outweighed the increase in dollars announced.

 

 

Market volatility continues with the stock markets and metals commodities alternately getting dinged and recovering as US president Donald Trump and China stand off over trade, or more specifically, their bilateral trade balance.

 

 

China responded to Trump’s previous discourse about implementing tariffs on some US$50 billion of trade on the grounds that China steals US intellectual property with its own tariffs on $50 billion worth of US goods in a move that sees it ready to wage a trade war “to the end.” Not to be outdone, Trump responded at the end of the week with the threat of another US$100 billion of tariffs against Chinese products. Given the trade imbalance between the two nations – China exported US$505 billion to the US in 2017 and imported just US$130 billion – it has fewer exports with tariffs than Trump. However, beyond physical products China could look at trade in services such as tourism and education or make life difficult for US companies operating in its territory such as Apple and Starbucks. Then again, China is the biggest foreign holder of US Treasury debt, owning about US$1.17 trillion and it could cut the amount of US debt it buys.

 

 

So, in another choppy week, gold actually ended on a positive note after a weaker-than-expected US employment report for March from the Labor Department showed the key non-farm payrolls number up 103,000, which was a big miss to the downside.

 

 

On to the money: total fund raises announced increased to C$120.7 million, a five-week high, but which included no brokered financings and no bought-deal financings. The average offer size nearly doubled to C$7.1 million, a 64-week high.

 

 

 

Another volatile week for gold during saw the yellow metal close up at US$1,32/oz from US$1,325/oz a week ago despite hitting a mid-week high of US$1,341/oz. Gold is now up 2.32% this year. Meanwhile, the US dollar index closed up at 90.20 from 89.97 a week ago. The van Eck managed GDXJ closed up at US$32.39 from US$32.15 last week. The index is down 5.10% so far in 2018. The US Global Go Gold ETF closed down at US$12.51 from US$12.71 a week ago. It is down 3.84% so far in 2018. The HUI Arca Gold BUGS Index closed up at 177.59 from 175.41 last week. The SPDR GLD ETF saw buying return to close up at 859.99 tonnes from 846.12 tonnes a week ago.

 

 

In other commodities, the silver slightly up at US$16.40/oz from US$16.36/oz a week ago. Copper showed a slight increase to close at US$3.04/lb from US$3.02/lb last week. Oil put in another losing week and closed down at US$62.17 a barrel from US$64.94 a barrel a week ago.

 

 

The Dow Jones Industrial Average closed down at 23,932 from 24,103 last week. Likewise, Canada’s S&P/TSX Composite Index fell to 15,207 from 15,367 the previous week. The S&P/TSX Venture Composite Index closed down at 769.15 from 796.67 last week.

 

 

Summary:

 

  • Number of financings dropped to 17, a four-week low.
  • No brokered financings were announced this week, a 13-week low.
  • No bought-deal financings were announced this week, a two-week low.
  • Total dollars increased to C$120.7m, a five-week high.
  • Average offer size nearly doubled to C$7.1m, a 64-week high.

 

 

 

Financing Highlights

 

 

Nemaska Lithium (TSX:NMX) entered into an investment agreement with SoftBank Group for a C$99.1 million private placement @ C$1.12.

 

  • SoftBank to acquire up to 9.9% of Nemaska.
  • Nemaska needs to raise US$775-825 million to fund the construction and commissioning of its Whabouchi mine and Shawinigan lithium plant.
  • As long as SoftBank holds at least 5% of Nemaska’s shares, it has a right of first offer to purchase up to 20% of the lithium hydroxide and lithium carbonate produced at Shawinigan from spodumene concentrate from Whabouchi at pre-agreed discounts applicable to a pre-determined market price-based formula.
  • SoftBank can also nominate a director.

 

 

Major Financing Openings:

 

  • Nemaska Lithium (TSXV:NMX) opened a C$08 million offering on a best efforts basis.   
  • Euromax Resources (TSXV:EOX) opened a C$22 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.
  • Loncor Resources (TSXV:LN) opened a C$6 million offering on a strategic deal basis.   
  • Commander Resources (TSXV:CMD) opened a C$5 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.

 

 

Major Financing Closings:

 

  • Asanko Gold (TSX:AKG) closed a C$47 million offering on a strategic deal basis.   
  • Kennady Diamonds (TSXV:KDI) closed a C$10 million offering on a strategic deal
  • Tinka Resources (TSXV:TK) closed an C$06 million offering underwritten by a syndicate led by GMP Securities on a bought deal basis. Each unit included half a warrant that expires in a year.

 

 

Company News

 

 

NuLegacy Gold (TSXV:NUG) appointed John Budreski to its board. Budreski, MBA/BEng has over 35 years of capital markets and executive management experience and is the CEO of Morien Resources.

 

 

Posted April 10, 2018

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