ORENINC INDEX – Monday, October 8^th 2018

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Last week index score: 18.44

This week: 19.06

The Oreninc Index increased in the week ending October 7^th, 2018 to 19.06 from 18.44a week ago, although the number of financings fell.

The news cycle was dominated by the controversial nomination and appointment of Brett Kavanaugh to the US Supreme Court, and various incidents in his past that cause many to question his appropriateness for that office.

In other news, Canada, the US and Mexico agreed the replacement for their NAFTA free trade agreement, which now has the less nifty name of USMCA (US-Mexico-Canada Agreement).

Despite the general malaise hanging over the precious metals and mining sector, pricing for the yellow metal is doggedly holding around the US$1,200/oz level. The latest piece of news it has deflected is the latest US labor market jobs report from the Bureau of Labor Statistics that said 134,000 jobs were created in September. The data was weaker than many economists were expecting but that does not distract from the fact that US unemployment continues to fall, with the unemployment rate now just 3.7%, its lowest since 1969. Plans that Amazon may fix an in-house minimum wage of US$15/hour and push to raise the federal minimum wage level, could means that worker incomes may start rising too.

On to the money: total fund raises announced increased to C$27.3 million, a one-week high, which included one brokered financing for C$1.1 million, a one-week high, and one bought-deal financing for C$1.1 million, also a one-week high. The average offer size increased to C$1.8 million, a one-week high, whilst the number of financings was 15, a four-week low.

Finally, a better week for gold as it closed up at US$1,203/oz from US$1,190/oz a week ago. It is now down 7.61% this year. The US dollar index continued to inch upward ending the week up at 95.62 from 95.13 last week. The van Eck managed GDXJ also inched up to close at US$27.62 from US$27.36 a week ago. The index is down 19.07% so far in 2018. The US Global Go Gold ETF saw another reconfiguration of its composition as it inched down to close at US$10.54 from US$10.57 a week ago. It is now down 18.99% so far in 2018. The HUI Arca Gold BUGS Index closed up at 143.43 from 141.07 last week. The selling in the SPDR GLD ETF resumed with its inventory falling to 730.17 tonnes from 742.23 tonnes a week ago.

In other commodities, silver shed a few cents as it closed down at US$14.63/oz from US$14.66/oz a week ago. Copper also lost a few cents to close down at US$2.76/lb from US$2.80/lb last week. Oil’s rise continues as WTI closed up at US$74.34 a barrel from US$73.25 a barrel a week ago.

The Dow Jones Industrial Average lost more ground as it closed down at 26,447 from 26,458 last week. Canada’s S&P/TSX Composite Index followed suit as it closed down at 15,946 from 16,073 the previous week. The S&P/TSX Venture Composite Index also pulled back as it closed down at 705.69 from 709.16 last week.

Summary

• Number of financings decreased to 15, a four-week low.
• One brokered financing was announced for C$1.1m, a one-week high.
• One bought-deal financing was announced for C$1.1m, a one-week high.
• Total dollars elevated to C$27.3m, a one-week high.
• Average offer size increased to C$1.8m, a one-week high.

Financing Highlights

Stornoway Diamond Corporation (TSX:SWY) announced a series of financing transactions of up to C$129 including an offering of 57.1 million units @ C$0.35 for gross proceeds of C$20 million.

• Each unit is comprised of one share and half a warrant exercisable @ C$0.455 for five years.
• Stornoway’s largest shareholder, Ressources Québec intends to subscribe for up to C$10 million.
• The financing also includes the deferral of certain loan principal repayments for 24 months, representing debt service cost deferral of up to $54 million.
• Amendments to the Renard diamond streaming agreement comprising a supplementary up front deposit of the US dollar equivalent of C$45 million in cash and certain sales and pricing changes.

Major Financing Openings

• Stornoway Diamond (TSX:SWY) opened a C$20 million offering on a best efforts Each unit includes half a warrant that expires in five years.
• Prairie Provident Resources (TSX:PPR) opened a C$1 million offering underwritten by a syndicate led by Mackie Research Capital on a bought deal basis.   
• Velocity Minerals (TSXV:VLC.H) opened a C$1 million offering on a best efforts Each unit includes half a warrant that expires in three years.
• Zenyatta Ventures (TSXV:ZEN) opened a C$1 million offering on a best efforts Each unit includes half a warrant that expires in two years.

Major Financing Closings

• Nouveau Monde Mining Enterprises (TSXV:NOU) closed an C$86 million offering underwritten by a syndicate led by Eight Capital on a best efforts basis. Each unit included half a warrant that expires in two years.
• GT Gold (TSXV:GT) closed a C$43 million offering on a best efforts basis.
• Dolly Varden Silver (TSXV:DV) closed a C$2 million offering underwritten by a syndicate led by Eventus Capital on a best efforts basis.   
• Niocorp Developments (TSXV:NB) closed a C$13 million offering on a best efforts basis.