ORENINC INDEX – Monday, June 17^th 2019

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Last week index score: 35.32 (updated)

This week: 34.31

The Oreninc Index fell in the week ending June 14^th, 2019 to 34.31 from an updated 35.32 a week ago as gold consolidated recent price gains and financings jumped.

Another strong week for gold with the yellow metal holding onto recent gains while oil continued to slide as inventories reached their highest levels since mid-2017. However, more alleged attacks on tankers in the Gulf of Oman saw prices firm on sentiment of possible disruption in crude flows as tensions between Iran and the USA increase.

The US president also notched up his tariff rhetoric against China trying to force a summit meeting with his counterpart president Xi Jinping. Meanwhile, protests against a Hong Kong law which would allow extradition to mainland China have resulted in violent clashes with police and show little sign of abating forcing the government to cancel the plan.

The playground bully of the geopolitical scene is looking for someone else to pick on. Who is joining China, Iran, Mexico and Canada on the list for special attention of US president Donald Trump? Germany! Trump is now threatening sanctions on Germany as chancellor Angela Merkel supports a gas pipeline from Russia and said he may move US troops away from Germany, a NATO ally, over its defense spending. The White House also announced it would send more troops to Poland.

On to the money: total fund raises announced increased to C$55.9 million, a four week high, which included one brokered financing for C$5.45 million, four-week high and two bought-deal financings for C$25.4 million, a 13-week high. The average offer size increased to C$2.2 million, a four-week high, whilst the number of financings decreased to 25.

Gold dug-in and held last weeks’ gains as it closed up at US$1,341/oz from US$1,340/of a week ago. The yellow metal is up 4.62% so far this year. The US dollar index gained more than a point to close up at 97.57 from 96.54 last week. The Van Eck managed GDXJ gained again as it closed up at US$31.51 from US$30.88 a week ago. The index is now up 4.27% so far in 2019. The US Global Go Gold ETF also saw a rise as it closed up at US$12.96 from US$12.84 a week ago. It is up 13.63% so far in 2019. The HUI Arca Gold BUGS Index closed up as well at 173.74 from 168.95 last week. The SPDR GLD ETF saw its inventory increase again as it closed up at 764.10 tonnes from 756.42 tonnes a week ago.

In other commodities, silver fell below the US$15/oz level again as it closed down at YS$14.88/oz from US$15.02/oz a week ago. Copper however, continues to languish but gained a cent as it closed up at US$2.63/lb from US$2.62/lb a week ago. Oil’s sell-off resumed as WTI closed down at US$52.51 a barrel from US$53.99 a barrel a week ago.

The Dow Jones Industrial Average saw more growth as it closed up at 26,089 from 25,983 a week ago. Canada’s S&P/TSX Composite Index also closed up at 16,301 from 16,230 the previous week. The S&P/TSX Venture Composite Index closed down however at 587,84 from 596.54 last week.

Summary

• Number of financings decreased to 25.
• 1 brokered financing was announced this week for $5.45m, a four-week high.
• 2 bought-deal financings were announced this week for $25.4m, a 13-week high.
• Total dollars up to $55.9, a four-week high.
• Average offer increased to $2.2m, a four-week high.

Financing Highlights

Midas Gold (TSX:MAX) opened a C$19.9 million offering on a bought deal basis. 

• RBC Capital Markets and BMO Capital Markets as co-lead underwriters.
• 2 million shares @ C$0.60.
• Proceeds to be used to advance the feasibility study on, and permitting for, the redevelopment and restoration of the Stibnite gold project in Idaho, USA.
• Paulson & Co to maintain its pro rata interest of 29.11% and Barrick Gold to increase its 19.6% stake to 19.9%.

Great Bear Resources (TSX-V:GBR) opened a C$5.45 million bought deal offering which was increased to C$8.2 million.

• Underwritten by a syndicate led by Cormark Securities and including Canaccord Genuity.
• 5 million flow-through shares @ C$5.45.
• Proceeds will be used for Canadian exploration expenses related to Great Bear’s projects in Ontario.
• Drilling to include an additional 30,000m for 90,000m in 2019.

Major Financing Openings

• Midas Gold (TSX:MAX) opened a C$9 million offering on a bought deal basis.   
• Great Bear Resources (TSX-V:GBR) opened a C$45 million offering underwritten by a syndicate led by Cormark Securities on a bought deal basis, which was then increased to C$8.2 million.
• Benchmark Metals (TSX-V:BNCH) opened a C$5.0 million offering on a best efforts
• Strategic Resources (TSX-V:STI) opened a C$7 million offering on a best efforts basis.

Major Financing Closings

• Gowest Gold (TSX-V:GWA) closed a C$8.0 million offering on a strategic deal   
• Kincora Copper (TSX-V:KCC) closed a C$25 million offering on a best efforts basis.
• Sandspring Resources (TSX-V:SSP) closed a C$4.0 million offering on a best efforts
• Strategic Resources (TSX-V:STI) closed a C$7 million offering on a best efforts basis.