ORENINC INDEX – Monday, July 9^th 2018

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Last week index score: 16.43 (updated)

This week: 17.94

NuLegacy Gold (TSXV:NUG) announced a non-brokered private placement of up to 15 million units @ C$0.20 to raise C$3.0 million.

Avrupa Minerals (TSXV:AVU) provided an update on drilling at the Alvito IOCG project in Portugal. 

The Oreninc Index grew in the week ending July 6^th, 2018 to 17.94 from an updated 16.43 a week ago as lethargy continues to hang over the mining finance sector with summer doldrums now in full swing.

Gold bounced away from year lows as the world prepared for a trade war after the US imposed a 25% tariff against US$34 billion of Chinese imports and China immediately retaliated in kind by slapping a 25% tariff on 545 US products worth US$34 billion. US president Donald Trump said the US might additionally target Chinese goods worth $500 billion, the total value of Chinese imports into the US in 2017. China’s government-run English language China Daily newspaper said, “the Trump administration is behaving like a gang of hoodlums with its shakedown of other countries, particularly China.” This news sent the US dollar index tumbling.

Trade war concerns overshadowed the Bureau of Labor Statistics June jobs report that said 213,000 jobs were created, above the 200,000-figure expected by many economists. However, the US unemployment rate rose from 3.8% to 4.0% and wage data came in below expectations in June with average hourly nonfarm earnings rising by 5 cents to $26.98.

On to the money: total fund raises announced plunged to C$16.6 million, a 17-week low, which included no brokered financings and no bought deal financings. The average offer size fell to C$1.2 million, a two-week low, whilst the number of financings was 13, a 17-week low. Last week also saw only 4 trading days with Canada Day holiday on Monday.

Gold started a recovery from its recent hammering to close the week up at US$1,255/oz from US$1,252/oz a week ago, recovering from a week low of US$1,242/oz. Gold is now down 3.63% this year. The US dollar index fell again to 93.96 from 94.47 a week ago. The van Eck managed GDXJ gained ground to close up at US$33.50 from US$32.70 a week ago. The index is down 1.85% so far in 2018. The US Global Go Gold ETF also gained ground to close up at US$12.99 from US$12.72 a week ago. It is now down 0.17% so far in 2018. This shows that the better gold names are breaking away from the downturn in the yellow metal’s performance. The HUI Arca Gold BUGS Index closed up at 179.22 from 174.52 last week. The sell-off in the SPDR GLD ETF continued with its inventory closing down at 802.24 tonnes from 819.04 tonnes a week ago.

In other commodities, silver closed down at US$16.05/oz from US$16.12/oz a week ago. Copper’s fall continues, exacerbated by the impending US-China trade war, to close at US$2.82/lb from US$2.96/lb last week. Oil finally eased to close down at US$73.80 a barrel from US$74.15 a barrel a week ago.

The Dow Jones Industrial Average returned to winning ways to close up at 24,456 from 24,271 last week. Canada’s S&P/TSX Composite Index also had a winning week to close up at 16,371 from 16,277 the previous week. The S&P/TSX Venture Composite Index also closed up at 740.10 from 739.96 last week.

 Summary:

• Number of financings decreased to 13, a 17-week low.
• No brokered financings were announced this week, a two-week low.
• No bought-deal financing was announced this week, a two-week low.
• Total dollars plunged to $16.6m, a 17-week low.
• Average offer size fell to $1.2m, a two-week low.

 Major Financing Openings

• Prize Mining (TSXV:PRZ) opened a C$4 million offering on a best efforts Each unit includes half a warrant that expires in a year. The deal is expected to close on or about July 26th.
• NuLegacy Gold (TSXV:NUG) opened a C$3 million offering on a best efforts Each unit includes a warrant that expires in two years. The deal is expected to close on or about July 16th.
• Allegiant Gold (TBA) opened a C$34 million offering on a best efforts basis.   
• Allegiant Gold (TBA) opened a C$07 million offering on a strategic deal basis.   

Major Financing Closings

• White Gold (TSXV:WGO) closed a C$10 million offering on a best efforts   
• Foran Mining (TSXV:FOM) closed a C$14 million offering on a best efforts basis.   
• Eastmain Resources (TSX:ER) closed a C$12 million offering underwritten by a syndicate led by Industrial Alliance Securities on a bought deal basis. Each unit include half a warrant that expires in two years.
• Canadian Orebodies (TSXV:CO) closed a C$06 million offering on a best efforts basis.

Company News

NuLegacy Gold (TSXV:NUG) announced a non-brokered private placement of up to 15 million units @ C$0.20 to raise C$3.0 million.

• OceanaGold (TSX:OGC) intends to exercise its equity participation right to maintain its ownership interest at 16.2% (2.4 million units).
• Each unit consists of one share and a warrant exercisable @ C$0.30 for two years.
• Upon closing, NuLegacy will have ~C$9.0 million in its treasury.
• The net proceeds will be used to fund ongoing exploration of the Red Hill property in Nevada.

Analysis

The financing will mean that NuLegacy has sufficeint funds to complete its 2018 exploration program and expand its planned drilling programs going into 2019. Plus the ongoing support and participation of gold producer Oceana underpins the company’s efforts.

Avrupa Minerals (TSXV:AVU) provided an update on drilling at the Alvito IOCG project in Portugal. 

• To date, Avrupa has completed the initial 15 drill holes, totaling 2,127m, in eight separate prospect areas within the Alvito license.
• Drilling has been completed on the three additional holes at Entre Matinhas for 300m of the supplemental drill program agreed by the technical committee.
• Avrupa expects all drill samples to be in the laboratory in July.
• Work is funded by Oz Minerals that is spending A$1 million on exploration to earn-in to 51% of the project.

Analysis

With drilling samples hitting the laboratory, the company is expected to announced results in the coming weeks.