ORENINC INDEX – Monday, July 1^st 2019

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Last week index score: 43.57 (updated)

This week: 48.69

The Oreninc Index increased in the week ending June 28^th, 2019 to 48.69 from an updated 43.57 a week ago as the number of financings and dollars increased.

Gold continued to shove continued strength as it held above the US$1,400/oz level leading many commentators to opine that if it holds at this level or above for another couple of weeks, it could be a springboard to much higher prices. After hitting a record level in Australian dollars last week it almost hit its highest point ever in Canadian dollars after hitting C$1,864/oz this week.

The gold price pushing higher has also seen it become a topic written about in mainstream media and not just the business pages. For example, the UK’s The Sun tabloid newspaper ran an article about how to convert old gold jewellery into cash.

Perhaps a better indicator of the growing strength of the gold price is that the yellow metal shrugged off the latest inflation numbers from the US Department of Commerce. The Core Personal Consumption Expenditures Index increased 0.2% in May meeting expectations while the core annual inflation rate remained unchanged at 1.6%, which some observers may lend support to the case for the US Federal Reserve to possibly cut interest rates in July. The gold price also shrugged of US Labor Department data as jobless claims rose by 10,000 to a seasonally adjusted 227,000. The four-week moving average for new claims increased by 2,250 to 221,250.

Vying with gold for headlines was the return of Bitcoin which has seen a meteroric rise recently and hit US$13,747 this week, its highest level since January 2018. It increased 40% this week alone and is up 320% since December and more than double what it was at the start of May.

On the political front, world leaders from the G20 group of nations are in Osaka, Japan for a summit meeting as tension between the US and Iran continues, and the trade spat between the US and China continues. US president Donald Trump met with his Chinese counterpart Xi Jingping and they agreed to resume trade talks.

A two-week strike at Codelco’s massive Chuquicamata copper mine in Chile is over after the company and unions came to terms. The stoppage is estimated to have cost the company some US$35 million due to lost production.

On to the money: total fund raises announced increased to C$108.9 million, an 18-week high, which included one brokered financing for C$32.5 million, seven-week high and one bought-deal financing for C$32.5 million, a 15-week high. The average offer size more than doubled to C$4.3 million, an 18-week high, while the number of financings decreased to 25.

Gold continued to gain hitting a mid-week high of US$1,423/oz before closing up at US$1,409/oz from US$1,399/oz a week ago. The yellow metal is up 9.91% so far this year. The US dollar index continued in retreat to close down at 96.13 from 96.22 last week. The Van Eck managed GDXJ continued to gain as it closed up at US$34.96 from US$34.37 a week ago. The index is now up 15.68% so far in 2019. The US Global Go Gold ETF also saw a rise as it closed up at US$14.08 from US$13.82 a week ago. It is up 23.42% so far in 2019. The HUI Arca Gold BUGS Index closed up as well at 194.12 from 189.99 last week. The SPDR GLD ETF saw its inventory rise to more than 801 tonnes mid-week before closing down at 794.04 tonnes from 799.03 tonnes a week ago.

In other commodities, silver shed a few cents as it closed down at US$15.32/oz from US$15.35/oz a week ago. Copper added a cent as it closed up at US$2.71 from US$2.70/lb a week ago. Oil continued to strengthen as WTI closed up at US$58.47 a barrel from US$57.43 a barrel a week ago.

The Dow Jones Industrial Average declined as it closed down at 26,599 from 26,719 a week ago. Canada’s S&P/TSX Composite Index also closed down at 16,382 from 16,525 the previous week. The S&P/TSX Venture Composite Index closed down as well at 585.47 from 592.57 last week.

Summary

• Number of financings decreased to 25.
• One brokered financing was announced this week for C$32.5m, a seven-week high.
• One bought-deal financing was announced this week for C$32.5m, a 15-week high.
• Total dollars up to C$108.9m, an 18-week high.
• Average offer decreased to C$4.3m, an 18-week high.

Financing Highlights

Continental Gold (TSX:CNL) announced that Eric Sprott agreed to invest US$25 million in a non-brokered private placement.

• 6 million shares @ C$3.10
• Proceeds will be used for general working capital and corporate purposes.

Pure Gold Mining (TSX-V:PGM) entered into an agreement with Sprott Capital Partners for a bought-deal private placement to raise C$32.5 million.

• 1 million units @ C$0.55
• Each unit will consist of one share and half a warrant exercisable @ C$0.85 for three years.
• The underwriters have a 15% over-allotment option.
• Proceeds will be used for exploration and development activities.

Major Financing Openings

• Continental Gold (TSX-V:NSX) opened a C$9 million offering on a strategic deal basis.
• Pure Gold Mining (TSX-V:PGM) opened a C$51 million offering underwritten by a syndicate led by Sprott Capital Partners on a bought deal basis.
• Osisko Metals (TSX-V:OM) opened a C$8.0 million offering on a best efforts
• Skeena Resources (TSX-V:SKE) opened a C$5.0 million offering on a best efforts

Major Financing Closings

• Galway Metals (TSX-V:GWM) closed a C$1 million offering on a best efforts basis.   
• BTU Metals (TSX-V:BTU) closed a C$49 million offering on a best efforts basis.
• Goldplay Exploration (TSX-V:GPLY) closed a C$38 million offering on a best efforts basis.   
• Aton Resources (TSX-V:AAN) closed a C$12 million offering on a best efforts basis.