ORENINC INDEX – Monday, February 24^th 2020

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Last Week: 43.06      

This week: 43.69

The Oreninc Index increased slightly in the week ending February 24^th, 2020 to 43.69 from 43.06 a week ago although the number of financings halved

The touchpaper was lit under gold this week with the yellow metal powering to a seven-year high and honing-in on the US$1,650/oz level as safe-haven buying strengthens. At the same time, the US dollar has had its strongest yearly start since 2015 with the dollar more closely tracking stocks higher than falling with Treasury yields.

Deaths caused by the coronavirus in China have passed 2,200 with the number of afflicted over 75,000. Other Asian countries, particularly South Korea and Japan have reported a growing number of cases.

News of the economic impacts of the virus outbreak rolled-in throughout the week, as different industries are starting to experience the first effects of materials or component shortages. For example, car sales in China, the world’s largest market, falling 90% in February. Sportswear company Adidas said business has fallen 85% because of store closures in China. The industrial province of Hubei where the virus outbreak began is still locked down.

The government response to shore up the economy includes moves by the People’s Bank of China to provide medium-term lending for banks and reducing interest rates charged. The airline industry is likely to receive state assistance to compensate for lost revenues due to travel bans.

In the US, the Federal Reserve released the minutes from its January 28-29 meeting which stated the “current stance of monetary policy was appropriate” and indicating interest rates would be held steady at between 1.5% and 1.75% for the foreseeable future. The minutes indicated the Fed plans to wind up conducting daily repo operations and short-term T-bill purchases after April.

On to the money: total fund raises fell back to $60.8 million, a two-week low, which included one brokered financing for $27 million, a five-week high, and one bought-deal financing for $27 million, a six-week high. The average offer size increased to $3.8 million, a three-week high, while the number of financings halved to 16.

Spot gold closed in on the US$1.650/oz mark closing up at $1,643/oz from $1,584/oz a week ago. The yellow metal is up 8.31% so far this year. The US dollar index saw another strong week as it again closed up at 99.26 from 99.12 last week. The VanEck managed GDXJ closed up at US$44.97 from $40.97 a week ago. The index is up 6.41% so far in 2020. The US Global Go Gold ETF also closed up at US$17.92 from $16.51 from a week ago. It is up 2.05% so far in 2020. The HUI Arca Gold BUGS Index closed up at 249.75 from 225.36 last week. The SPDR GLD ETF inventory added another ten tonnes as it closed up at 933.94 tonnes from 923.99 tonnes a week ago, its highest level since November 2016.

In other commodities, spot silver added the best part of a dollar to close up at US$18.49/oz from $17.74/oz a week ago. Copper continues bouncing along its apparent bottom closing the week up at US$2.61/lb from $2.60/lb a week ago. The oil price continued to improve as WTI closed up at US$53.38 a barrel from $52.05 a barrel a week ago.

The Dow Jones Industrial Average posted a rare loss as it closed down at 28,992 from 29,398 a week ago. Canada’s S&P/TSX Composite Index closed down slightly at 17,843 from 17,848 the previous week. The S&P/TSX Venture Composite Index closed up at 582.55 from 570.49 last week.

Summary

• Number of financings decreased to 16.
• One brokered financing was announced this week for $27 million, a five-week high.
• One bought-deal financing was announced this week for $27 million, a six-week high.
• Total dollars decreased to $60.8 million, a two-week low.
• Average offer size increased to $3.8 million, a three-week high.

Financing Highlights

Harte Gold (TSX:HRT) announced a $27 million overnight marketed private placement

• 8 million flow-through shares @ $0.16.
• Underwritten by a syndicate led by Canaccord Genuity and Haywood Securities, and including CIBC Capital Markets and BNP Paribas.
• Appian Capital Advisory participated to maintain its pro-rata interest at 24.4%.
• Proceeds will be used for eligible development expenses at its Sugar project in Ontario, Canada.

Major Financing Openings

• Harte Gold (TSX-V:HRT) opened a $27 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal basis. The deal is expected to close on or about March 11th.
• Touchstone Exploration (TSX-V:TAB.U) opened an $11.95 million offering on a best efforts basis.
• Aurania Resources (TSX-V:ARU) opened an $8 million offering on a strategic deal basis. Each unit includes half a warrant that expires in 18 months. The deal is expected to close on or about February 28th.
• Azimut Exploration (TSX-V:AZM) opened a $6 million offering on a best efforts basis.

Major Financing Closings

• Bear Creek Mining (TSX-V:BCM) closed a $16.6 million offering underwritten by a syndicate led by BMO Capital Markets on a bought deal basis.
• Touchstone Exploration (TSX-V:TAB.U) closed a $15.23 million offering on a best efforts basis.
• Irving Resources (CSE:IRV) closed a $5.27 million offering on a best efforts basis.
• Para Resources (TSX-V:PBR) closed a $5 million offering on a best efforts basis.