ORENINC INDEX – Monday, March 9^th 2020

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Last Week: 42.49      

This week: 43.95

The Oreninc Index increased in the week ending March 6^th, 2020 to 43.95 from 42.49 a week ago boosted by a large bought deal while financings in general fell.

The past week saw the PDAC conference in Toronto, the world’s largest exploration event and attendance was noticeably down as many companies and delegates did not turn up due to concerns about coronavirus, with official figures coming in at 23,000.

Concern is growing around the globe as the number of cases tops 100,000, global deaths exceed 3,200 and the first deaths in the US and UK, and first cases are reported in many other countries. Stock markets around the world are in crisis as a result of significant sells offs as investors move into treasuries.

Gold has been one of the beneficiaries of the flight to safety, especially as central banks around the world have pledged to take action to support the economy. In the US, the Federal Reserve announced a surprise 50 basis point (0.5%) cut in interest rates mid-week.

The bid for the Democratic party nomination heated up with the Super Tuesday of primaries held in 14 states. Notable casualties were Senator Elizabeth Warren and Michael Bloomberg who both dropped out after poor showings. The big winner was former vice president Joe Biden who won 10 of the 14 Super Tuesday states and it now appears that he or Bernie Sanders will win the nomination.

On to the money: total fund raises decreased a smidge to $61.8 million, a two-week low, which included one brokered financing for $38 million, a 13-week high, and no bought-deal financings. The average offer size almost doubled to $3.6 million, a three-week high, while the number of financings almost halved to 17.

Spot gold continued to soar to new heights as it closed up at US$1,673/oz from $1,585/oz a week ago. The yellow metal is up 10.32% so far this year. The US dollar index closed down again at 95.95 from 98.12 last week. The VanEck managed GDXJ recovered from its strong sell-off the previous week to close up US$40.12 from $36.05 a week ago. The index is down 5.06% so far in 2020. The US Global Go Gold ETF followed suit and closed up at US$16.13 from $14.88 a week ago. It is down 85.14% so far in 2020. The HUI Arca Gold BUGS Index closed up as well at 240.27 from 215.54 last week. The SPDR GLD ETF inventory added again as it closed up at 955.6 tonnes from 934.23 tonnes a week ago.

In other commodities, spot silver also rebounded as it closed up at US$17.35/oz from $16.67/oz a week ago. Copper added a couple of cents as it closed up US$2.56/lb from $2.54/lb a week ago. The oil price continued its descent as WTI closed down at US$41.28 a barrel from $44.76 a barrel a week ago.

Volatile times for the Dow Jones Industrial Average continue with a rollercoaster week in which it closed up at 25,864 from 25,409 a week ago. Canada’s S&P/TSX Composite Index closed down again at 16,175 from 16,263 the previous week. The S&P/TSX Venture Composite Index closed up at 506.54 from 497.61 last week.

Summary

• Number of financings decreased to 17.
• One brokered financing was announced this week for $38 million, a 13-week high.
• No bought-deal financings were announced this week.
• Total dollars decreased to $61.8 million, a two-week low.
• Average offer increased to $3.6 million, a three-week high.

Financing Highlights

Premier Gold Mines (TSX:PG) opened and closed a C$38 million bought deal financing.

• Led by CIBC Capital Markets and Sprott Capital Partners, on behalf of a syndicate of underwriters that also included BMO Capital Markets, Scotiabank, Canaccord Genuity, RBC Capital Markets, Cormark Securities and TD Securities.
• 3 million shares @ $1.50.
• Proceeds will be used for working capital requirements of the Mercedes and South Arturo mines, development, expansion and working capital requirements of the McCoy-Cove project, and to reduce indebtedness under the company’s revolving term credit facility.

Major Financing Openings

• Premier Gold Mines (TSX:PG) opened a $38 million offering underwritten by a syndicate led by CIBC Capital Markets on a best efforts basis.
• Goldsource Mines (TSX-V:GXS) opened a $5 million offering on a best efforts basis. Each unit includes a 1/2 warrant that expires in two-and-a-half years. The deal is expected to close on or about March 24th.
• Magna Terra Minerals (TSX-V:MTT) opened a $2.6 million offering on a best efforts basis.
• Mistango River Resources (CSE:MIS) opened a $2.04 million offering on a best efforts basis. Each unit includes a warrant that expires in two years.

Major Financing Closings

• Premier Gold Mines (TSX:PG) closed a $38 million offering underwritten by a syndicate led by CIBC Capital Markets on a best efforts basis.
• Troilus Gold (TSX-V:TLG) closed a $12.83 million offering on a best efforts basis.
• Kerr Mines (TSX:KER) closed a $3.21 million offering on a best efforts basis.