Oreninc Index retreats as gold price dips

Kai Hoffmann - Oreninc | May 1, 2017 | 3:07 pm Precious Metals Gold Silver 

Last week index score: 75.93

This week: 60.47

NuLegacy Gold (TSXV: NUG) began an initial 40-hole, 35,000 drilling program at its Avocado deposit in Nevada.

The Oreninc Index fell in the week ending April 27th, 2017 to 60.47 from 75.93 as gold continuing to experience downwards pressure,

Total raises announced increased to C$129.5 million, a three-week high, which included two brokered financings for a total of C$18.0 million, a two-week low within which there was one bought-deal financing for C$15.0 million. The average offer size increased to C$3.2 million, a three-week high, whilst the total number of financings announced increased to 40, a two-week high.

The gold price continued to be under pressure as the US dollar strengthened and the stock markets grew, with gold ending the week down at US$1,268 from $1,289 the week before. US president Donald Trump announced a tax plan that included a reduction in corporate tax to 15%. The president also said he is thinking if withdrawing from the NAFTA free trade agreement.

The van Eck managed GDXJ continued to fall and is now up just 2.16% so far in 2017. The growth in the inventory of the SPDR GLD ETF came to an end and closed at 853.6 tonnes, down from 858.7 tonnes the previous week.

In other commodities, Silver fell on the week to close at US$17.24 whilst copper was up on the week at US$2.59. Oil fell with WTI crude closing at $49.19 per barrel.

The Dow Jones Industrial Average had a strong week of growth and closed at 20,940 but Canada’s S&P/TSX Composite Index fell and closed at 15,586 as did the S&P/TSX Venture Composite Index, which closed down on the week at 806.77.

Summary:

  • Number of financings increased to 40, a two-week high.
  • Two brokered financings were announced for $18.0m, a two-week low.
  • One bought-deal financings were announced for $15.0m, a two-week low.
  • Total dollars grew to $129.5m, a three-week high.
  • Average offer size increased to $3.2m, a three-week high.

Financial news highlights

Barkerville Gold Mines (TSXV: BGM) announced a bought deal private placement that it subsequently was increased to C$23.5 million. It also announced a concurrant non-brokered private placement for C$15 million with Osisko Royalties and Osisko Mining. The net proceeds from both financings will be used to further explore the company’s exploration properties in British Columbia, Canada.

The financing was announced after Barkerville announced a new discovery from an ongoing 130,000m Phase II Island Mountain exploration drilling program at its flagship Cariboo gold project.

Encanto Potash (TSXV: EPO) executed a financing agreement with Taylor-Dejongh with an initial equity investment of C$10 million for general working capital requirements and a subsequent project equity investment of C$60 million for the completion of a feasibility study for the Muskowekwan potash project in Saskatchewan, Canada, the first mining project on First Nations land.

Major Financing Openings:

  • Encanto Potash (TSX-V:EPO) opened a C$70 million offering on a strategic deal
  • Barkerville Gold Mines (TSX-V:BGM) opened a C$5 million offering underwritten by a syndicate led by Haywood Securities on a bought deal basis. Each unit includes half a warrant that expires in 18 months. The deal is expected to close on or about May 16, 2017.
  • Barkerville Gold Mines (TSX-V:BGM) opened a C$83 million offering on a strategic deal basis. Each unit includes a half warrant that expires in 18 months. The deal is expected to close on or about May 16, 2017.
  • Evrim Resources (TSX-V:EVM) opened a C$21 million offering on a best efforts basis. Each unit a half warrant that expires in 36 months.

Major Financing Closings:

  • Leucrotta Exploration (TSX-V:LXE) closed a C$80 million offering underwritten by a syndicate led by Haywood Securities on a bought deal
  • Platinum Group Metals (TSX:PTM) closed a C$21 million offering underwritten by a syndicate led by BMO Capital Markets on a bought deal basis.
  • Epsilon Energy (TSX:EPS) closed a C$57 million offering on a best efforts basis.
  • Seabridge Gold (TSX:SEA) closed a C$22 million offering underwritten by a syndicate led by Canaccord Genuity on a bought deal

Company news

NuLegacy Gold (TSXV: NUG) began an initial 40-hole, 35,000 drilling program at its Avocado deposit in Nevada.

  • The program aims to expand the extent of the gold mineralization
  • Drill the Deep Iceberg IP anomaly to confirm it as the third gold deposit
  • Exploring the VIO and Jasperoid Basin anomalies to establish their prospectivity as deposits
  • Expand the gold content of the established near-surface oxide Iceberg gold deposit
  • 65% of the drilling will consist of deeper drilling to explore for additional deposits and 35% will concentrate on expanding the gold footprint of the near-surface Iceberg deposit.

Conclusion

The restart of drilling is a key step for NuLegacy to confirm anomalies as deposits and expand the gold endowment of its Avocado and Iceberg deposits, with a view to being able to opportunistically finance at higher prices to achieve financial independence and ultimately sell to or merge with a producer.

NuLegacy is an advanced stage Nevada exploration company focusing on the discovery of district scale Carlin-style gold deposits on its Red Hill project in the Cortez gold trend.

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