ORENINC INDEX – Monday, May 20^th 2019

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Last week index score: 51.27 (updated)

This week: 35.96

Silver Spruce Resources (TSX:SSE) awarded a contract for its Phase I drill programme at Pino de Plata in western Chihuahua, Mexico to ECODRILL with drilling to commence within a week as it seeks to explore and develop a significant high-grade silver and base metals resource.

The Oreninc Index pulled back again in the week ending May 17^th, 2019 to 35.96 from an updated 51.27 a week ago as financings retreated.

China appears to be tiring of US president Donald Trump’s tariff shenanigans making the prospect of a breakthrough unlikely in the short term. Unwilling to be bullied into an agreement by the US president raising tariffs on US$200 billion of Chinese products, China’s vice premier Liu He stated that it will increase tariffs against on US$60 billion of US products from June 1st. A much-anticipated summit meeting between the two presidents is now unlikely to happen until the G-20 summit towards the end of June.

Trump locking horns with China over trade appears to be good for Canada and Mexico as the US reached a deal to lift steel and aluminum tariffs. These tariffs were an obstacle to passing the US Mexico Canada Agreement to update to the North American Free Trade Agreement. Canada will remove tariffs levied on American goods in retaliation for the duties the US placed on its the steel and aluminium.

While stock markets bounce up and down with every twist and turn about the tariffs battle, investors are not turning to gold as a refuge and base metal prices continue to slide. Oil, on the other hand, seems to be benefiting from geopolitical instability noise as tensions with Iran dial-up following reports of damage to two Saudi oil tankers in the Gulf of Oman near the coast of the United Arab Emirates and near the Straits of Hormuz, the pinch point on the sea route that exports oil from the Gulf states.

Uber’s IPO start to market life was rather unter as its share price continued to fall from the initial US$45 to a low of $37.10 on Monday before climbing back to US$43.

In the United Kingdom, prime minister Teresa May plans to present her deal to leave the European Union for a fourth time and then resign, no matter what the outcome. The opposition Labour party refuses to sign-off on the deal, which most observers expect will fail to pass muster for a fourth time. Meanwhile, with European Parliament elections approaching, the Brexit party headed by Nigel Farage looks set to gave most of the UK’s seats, with the Conservative party expected to lose the majority of its seats.

On to the money: total fund raises announced decreased to C$63.7 million, a three-week low, that included one brokered financing for C$9.0 million that was subsequently increased to C$11.0 million, a three-week low, and one bought-deal financing for C$9.0 million that was subsequently increased to C$11.0 million. The average offer size decreased to C$2.6 million, a three-week low, whilst the number of financings decreased to 24, also a three-week low.

Gold’s fight-back ran out of steam this past week as it closed down at US$1,277/oz from US$1,286/oz a week ago. The yellow metal is down 0.39% so far this year. The US dollar index edged up again as it closed at 97.99 from 97.33 last week. The Van Eck managed GDXJ reversed its sell down as it closed up at US$28.74 from US$28.38 a week ago. The index is now down 4.90% so far in 2019. The US Global Go Gold ETF also closed up at US$11.86 from US$11.70 last week. It is up 3.94% so far in 2019. The HUI Arca Gold BUGS Index closed up as well at 150.48 from 147.78 last week. The SPDR GLD ETF finally saw a brake put on its inventory sell off as it closed up at 736.17 tonnes from 733.23 a week ago.

In other commodities, silver continued to lose ground as it closed down at US$14.40/oz from US$14.79/oz a week ago. Copper also continued to shed cents as it closed down at US$2.73/lb from US$2.77/lb a week ago. Oil returned to growth as WTI closed up at US$62.76 a barrel from US$61.66 a barrel a week ago.

The Dow Jones Industrial Average slowed its rate of descent as it closed down at 25,764 from 25,942 a week ago. Canada’s S&P/TSX Composite Index saw growth as it closed up at 16,401 from 16,297 the previous week. The S&P/TSX Venture Composite Index also closed up at 609.15 from 599.48 last week.

Summary:

• Number of financings decreased to 24, a three-week low.
• One brokered financing was announced this week for $9.0m and was later increased to $11.0m, a three-week low.
• One bought-deal financing was announced this week for $9.0m and was later increased to $11.0m, a seven-week high.
• Total dollars down to $63.7m, a three-week low.
• Average offer shrunk to $2.6m, a three-week low.

Financing Highlights

Fura Gems (TSX-V:FURA) opened a C$30.38 million offering on a best efforts basis.

• 5 million shares @ C$0.25
• Net proceeds will be used to advance the Coscuez emerald project in Colombia and ruby assets in Mozambique.
• The financing is expected to close on or about June 28th

Nighthawk Gold (TSX-V:NHK) opened a C$9.0 million offering underwritten by a syndicate led by PI Financial on a bought deal basis. The offering was then increased to $11.0 million.

• Bought deal private placement by a syndicate of underwriters co-led by PI Financial and BMO Capital Markets Canada including Haywood Securities.
• 1 million flow-through shares @ C$0.40 and 11.7 million charity flow-through shares @ C$0.495.
• Overallotment option of up to an additional 1.2 million FT shares and 1.8 million charity FT shares.
• Gross proceeds will be used for exploration expenditures on the Indin Lake gold property in Canada’s Northwest Territories, where its 2019 exploration budget will be increased from C$10.0 million to C$15.0 million.

Major Financing Openings

• Fura Gems (TSX-V:FURA) opened a C$38 million offering on a best efforts basis.   
• Nighthawk Gold (TSX-V:NHK) opened a C$9.0 million offering underwritten by a syndicate led by PI Financial on a bought deal The offering was then increased to $11.0 million.
• Amarillo Gold (TSX-V:AGC) opened a C$5.0 million offering on a best efforts
• NRG Metals (TSX-V:NGZ) opened a C$5 million offering on a best efforts basis.

Major Financing Closings

• Nevada Copper (TSX:NCU) closed a C$8 million offering underwritten by a syndicate led by National Bank Financial on a best efforts basis.
• Nevada Copper (TSX:NCU) closed a C$22 million offering on a insiders only basis.
• Euromax Resources (TSX-V:EOX) closed a C$19 million offering on a strategic deal basis.
• Chakana Copper (TSX-V:PERU) closed a C$8.0 million offering on a strategic deal

Company News

Silver Spruce Resources (TSX:SSE) awarded a contract for its Phase I drill programme at Pino de Plata in western Chihuahua, Mexico to ECODRILL with drilling to commence within a week as it seeks to explore and develop a significant high-grade silver and base metals resource.

• Phase I will consist of at least twelve holes for 2,000-2,500m
• All holes will be collared on existing roads with no new access roads required.
• Permitted to drill 30 holes and a surface access agreement is in place.

Analysis

This will be the first ever drilling at Pino de Plata and the history of artisanal mining of high-grade mineralisation in the area means there could be some exciting results coming over the coming weeks as Silver Spruce seeks to identify resources to support near-term surface mining and direct shipping of ore.