ORENINC INDEX – Monday, October 21^st 2019

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Last Week: 40.83

This week: 39.90

#ICYMI: Oreninc CEO Kai Hoffmann joined Michael McCrae of Kitco News on a recent podcast to discuss the current financing environment, impact of the gold price and the investment habits of Eric Sprott. Listen here: https://www.kitco.com/news/2019-10-11/PODCAST-How-Eric-Sprott-is-helping.html

The Oreninc Index fell in the week ending October 18^th, 2019 to 39.90 from 40.83 as the aggregate raise amount almost halved during a short week due to Canadian Thanksgiving.

The gold price hovered under the US$1,500/oz level through the week, making half-hearted attempts to move higher before falling back again.

Is there finally an agreement for the UK to leave the European Union? UK prime minister Boris Johnson and European Commission president Jean-Claude Juncker certainly think so. The new deal will see a customs border in the Irish Sea between the mainland UK and Northern Ireland, something Johnson and hardliners from the ruling Conservative party said would never happen as it would be an incision in the UK’s sovereignty (and reclaiming sovereignty was a key issue in the desire to leave the UK, right?). So, Northern Ireland will remain in the EU customs union to allow a free flow of goods with the Republic of Ireland and prevent the return of border posts between the two territories. Goods passing from the mainland UK to Northern Ireland will be subject to checks and duties.

However, the terms have yet to be ratified by the UK Parliament and the EU member states, which in the UK at least is likely to present a challenge given that Johnson lacks a majority. Opposition leader Jeremy Corbyn called the deal worse than the one former prime minister Teresa May failed to win approval for on three occasions and said it should be put to a public referendum. Notably, it lacks the backing of the Democratic Unionist party in Northern Ireland.

Elsewhere, trade talks between the US and China continue along a rocky road with Beijing threatening countermeasures if the US backs pro-democracy demonstrators in Hong Kong. However, with China promising to buy more US agricultural products the US delayed the implementation of 25-30% tariffs on US$250 billion of imports. Duties on $160 billion of other products are due to kick-in on December 15th.

Turkish armed forces continue attacks in northern Syria following the withdrawal of US forces from the region. The US has threatened economic sanctions against Turkey if the attacks continue, which met with the opprobrium of Turkish president Recep Erdoğan. The US stores nukes at an airbase in Turkey, further complicating the situation, and the US withdrawal could also see Russia attempt to increase its influence in the region by acting as peacekeeper.

On to the money: total fund raises announced decreased to $25.5 million, a seven-week low, which included one brokered financing for $8.0 million, a one-week high, and one bought-deal financing for $8.0 million, also a one-week high. The average offer size fell to $1.1 million, a one-week low, while the number of financings fell to 22.

Gold closed up at US$1,490/oz from $1,489/oz a week ago. The yellow metal is up 16.18% so far this year. The US dollar index continued to slide as it closed down at 97.28 from 98.33 last week. The VanEck managed GDXJ closed up at US$37.21 from $37.07 a week ago. The index is now up 23.13% so far in 2019. The US Global Go Gold ETF closed up at US$15.80 from $15.75 a week ago. It is up 38.48% so far in 2019. The HUI Arca Gold BUGS Index closed up at 208.19 from 204.08 last week. The SPDR GLD ETF inventory closed up at 924.64 tonnes from 921.71 tonnes a week ago.

In other commodities, silver closed up at US$15.55 from US$15.54/oz a week ago. Copper also added a cent as it closed up at US$2.63/lb from $2.62/lb a week ago. Oil lost a dollar as WTI closed down at US$53.78 a barrel from $54.91 a barrel a week ago.

The Dow Jones Industrial Average fell away again as it closed down at 26,770 from 26,816 a week ago. Canada’s S&P/TSX Composite Index closed down again at 16,377 from 16,415 the previous week. The S&P/TSX Venture Composite Index closed up at 542.43 from 540.76 last week.

Summary

• Number of financings decreased to 22.
• One brokered financing announced this week for $8m, a one-week high.
• One bought-deal financing was announced this week for $8m, a one-week high.
• Total dollars lowered to $24.5m, a seven-week low.
• Average offer decreased to $1.1m, a 19-week high.

Financing Highlights

Amex Exploration (TSX-V:AMX) opened a bought deal private placement for gross proceeds of $8.0 million.

• Syndicate of underwriters co-led by PI Financial and Generic Capital.
• 4 million flow-through units @ $1.80 and half a warrant.
• A premium of about 63% to the closing price of the company’s shares on October 15th.
• Each warrant is exercisable @ $1.50 for 18 months.
• Eric Sprott agreed to make a strategic investment and is expected to own ~14.2% of Amex on a non-diluted basis.
• Proceeds will be used for general exploration expenditures on properties in Quebec, Canada.

Major Financing Openings

• Amex Exploration (TSX-V:AMX) opened a $8 million offering underwritten by a syndicate led by PI Financial on a bought deal Each unit includes half a warrant that expires in 18 months. The deal is expected to close on or about November 5th.
• Balmoral Resources (TSX:BAR) opened a $1 million offering on a best efforts basis.   The deal is expected to close on or about October 30th.
• Canadian Metals (CSE:CME) opened a $2 million offering on a best efforts   
• Erdene Resource Development (TSX:ERD) 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 October 25th.

Major Financing Closings

• Metallic Minerals (TSX-V:MMG) closed a $75 million offering on a strategic deal basis. Each unit included half a warrant that expires in two years.
• Mineral Mountain Resources (TSX-V:MMV) closed a $41 million offering on a best efforts basis. Each unit included a warrant that expires in two years.
• Kootenay Silver (TSX-V:KTN) closed a $2 million offering on a best efforts Each unit includes half a warrant that expires in two years.
• Metallis Resources (TSX-V:MTS) closed a $86 million offering on a best efforts basis.