ORENINC INDEX – Monday, December 10^th 2018

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Last week index score: 45.78

This week: 44.38

NuLegacy Gold (TSX-V:NUG) saw brokerage firm Canaccord initiate coverage with a speculative buy rating and C$0.25 target price. The reasons it finds NuLegacy compelling include:

Nexus Gold (TSX-V:NXS) entered into a mineral property acquisition agreement to acquire the New Pilot project near Gold Bridge, British Columbia, Canada.

The Oreninc Index fell in the week ending December 7^th, 2018 to 44.38 from 45.78 a week ago as the US mourned the passing of former president George Bush Sr, which saw the US stock market shut for the day.

The current US president stoked trade headlines again with news that his trade war with China is temporarily suspended following a meeting with Chinese premier Xi Jinping during the G-20 meeting. China allegedly agreed to “reduce and remove” tariffs on imported American-made cars, which may not actually happen, particularly since Canada arrested Meng Wanzhou, CFO at telecoms company as she was passing through Vancouver airport, and intends to extradite her to the US. Huawei has close links to China’s government and is accused of breaking restrictions on trading with Iran.

Gold continued to pick up pace reaching a six-week high as it closed on US$1,250/oz, boosted by disappointing job creation figures from the US Labor Department marking weaker-than-expected figures for the fourth consecutive week.

The World Gold Council reported that holdings in global gold-backed ETFs and similar products rose for the second consecutive month in November and flows are now positive in US dollar terms on the year.

Gold temporarily lost its crown as the most valuable precious metal as the run up in industrial precious metal palladium continued. It topped gold for the first time in 16 years on Wednesday amid a tight market facing strong automotive demand.

Oil saw a week of cuts or no cuts production chin-scratching amongst industry decision-makers as OPEC members met in Vienna, Austria and Saudi Arabia and Russia held talks during the G-20 meeting in Buenos Aires, Argentina. Meanwhile Qatar, currently an outcast in the Middle East, said it will withdraw from OPEC to focus on gas.

On to the money: total fund raises announced increased again to C$112.1 million, an eleven-week high, although there were no brokered financings, but three bought-deal financings for C$24.5 million, a seven-week high. The average offer size increased again to C$3.7 million, an eleven-week high, whilst the number of financings fell to 30, a two-week low.

Gold returned to growth as it closed up at US$1,249/oz from US$1,220/oz a week ago. It is down 4.11% this year. The US dollar index lost ground closing down at 96.71 from 97.27 last week. The van Eck managed GDXJ returned to growth as it closed up at US$28.04 from US$26.59 a week ago. The index is down 17.84% so far in 2018. The US Global Go Gold ETF also closed up at US$10.71 from US$10.20 a week ago. It is now down 17.68% so far in 2018. The HUI Arca Gold BUGS Index closed up at 153.93 from 145.04 last week. The SPDR GLD ETF shed more inventory to close down at 759.73 tonnes from 761.74 tonnes a week ago.

In other commodities, silver climbed to close up at US$14.63/oz from US$14.20/oz a week ago. Copper shed a few cents however to close down at US$2.75/lb from US$2.78/lb a week ago. Oil broke back above the US$50 a barrel level as WTI closed up at US$52.61 a barrel from US$50.93 a barrel a week ago.

The Dow Jones Industrial Average saw strong selling and closed down at 24,388 from 25,538 last week. Canada’s S&P/TSX Composite Index also sold off to close down at 14,795 from 15,197 the previous week. The S&P/TSX Venture Composite Index also closed down again at 572.38 from 589.52 last week.

Summary

• Number of financings decreased to 30, a two-week low.
• No brokered financings were announced this week, a two-week low.
• Three bought-deal financings were announced this week for C$24.5m, a seven-week high.
• Total dollars increased to C$112.1m, an eleven-week high.
• Average offer size raised to C$3.7m, an eleven-week high.

Financing Highlights

West African Resources (TSX-V:WAF) opened and closed an underwritten financing to raise A$43.2 million

• 7 million shares @ A$0.25, a 15.3% discount to the closing price of A$0.295 on 3^rd December.
• West African fully-funded through to gold production at the Sanbrado project in Burkina Faso in 2020
• $5 million share purchase plan
• A non-underwritten share purchase plan to facilitate retail shareholder participation of up to $15,000 per shareholder @ A$0.25 with a cap of A$5.0 million.
• Euroz Securities and Sprott Capital Partners were joint lead managers, underwriters and bookrunners. Macquarie Capital Markets Canada acted as co-manager.

McEwen Mining (TSX:MUX) announced a strategic financing to continue exploration at its properties in the Timmins region of Ontario, Canada.

• US$15.0 million (C$20.0 million) bought deal private placement of 6.6 million flow-through shares @ US$2.26 (C$3.02)
• Led by Cantor Fitzgerald Canada as sole bookrunner.
• Premium of 26% over the closing price on December 5^th.
• The proceeds will be used exclusively for generative exploration on properties in the Timmins region.

Major Financing Openings

• West African Resources (TSX-V:WAF) opened a C$42 million offering on a best efforts
• McEwen Mining (TSX:MUX) opened a C$03 million offering on a bought deal basis.   The deal is expected to close on or about December 21st.
• Northern Vertex Mining (TSX-V:NEE) opened a C$72 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.
• Galantas Gold (TSX-V:GAL) opened a C$9 million offering on a best efforts basis.

Major Financing Closings

• Excelsior Mining (TSX-V:MIN) closed a C$12 million offering on a best efforts basis.
• Global Atomic (TSX-V:GLO) closed a C$59 million offering underwritten by a syndicate led by Arlington Group Asset Management on a best efforts basis.
• Rupert Resources (TSX-V:RUP) closed a C$4 million offering on a best efforts basis.   
• Gatling Exploration (TSX-V:GTR) closed a C$46 million offering on a best efforts basis.

Company news

NuLegacy Gold (TSX-V:NUG) saw brokerage firm Canaccord initiate coverage with a speculative buy rating and C$0.25 target price. The reasons it finds NuLegacy compelling include:

• High-grade mineralization geologically similar to neighbouring Barrick Gold mines
• Management expertise in the region
• Continued drill results that could be catalytic
• Compelling takeout candidate with strategic ownership (including Oceana Gold 16.2% and Barrick 10.4%) with an asset strategically located and desirable for a large operator
• Blue sky potential with one of the best discovery stories in Nevada

Analysis

The initiation of coverage by Canaccord should be a positive for NuLegacy as it will bring additional interest to the story and marketing to investors.

Nexus Gold (TSX-V:NXS) entered into a mineral property acquisition agreement to acquire the New Pilot project near Gold Bridge, British Columbia, Canada.

• Consideration of 3.5 million shares.
• New Pilot is a gold-copper exploration property in the Bridge River Mining Camp.

Analysis

New Pilot will diversify the company’s African portfolio with a Canadian asset and reduce its political risk profile.