The Oreninc Index fell in the week ending January 20, 2017 albeit following one of the best weeks seen in Canadian equity financings for a long time. Total dollars announced fell to $191.8m from $285.6m, which included five brokered financings for a total of $41.5m, and one bought-deal financing for $30.0. The average offer size fell from $11.9m to $5.2m.
Whilst the dollar values may have fallen, the total number of financings increased to 38 as gold consolidated its move above the 1,200 USD mark, continuing the rally that began in late December 2016. The industry’s leading benchmark index, the van Eck managed GDXJ continued its upward trend and is up 18.76% so far in 2017.
Donald Trump is now the US President and the ten-year Treasury Inflation Protected Securities (TIPS) yield continues on its path to pre-election levels.
Financial news highlight
Of particular note this week, Lithium Americas Corp. (TSX:LAC) announced major financings including private placements for an aggregate $106.5 million that highlights the serious interest in the lithium space, particularly from China, as it seeks to obtain access to the raw material that it needs for its battery plants.
Ganfeng agreed to purchase 75 million shares at C$0.85 each for gross proceeds of C$64 million, some 19.9% of the company, and a couple of days later BCP Innovation Pte Ltd (BCPI) agreed to purchase 50 million shares at C$0.85 each for gross proceeds of C$42.5 million, some 16.4%.
But the money flow did not stop there as debt commitments from both purchasers mean LAC will have raised US$286 million, enough to finance its 50% share of stage 1 of the Cauchari-Olaroz lithium carbonate joint venture project in Argentina with leading producer SQM.
Ganfeng will provide US$125 million in debt at an 8-9.5% with a six-year term with an offtake entitlement to 70% of LAC’s share of Cauchari-Olaroz stage 1 production, and BCPI will provide US$80 million in debt on the same terms for 15% of LAC’s share of Cauchari-Olaroz stage 1 production.
Summary:
Major Financing Openings:
Major Financing Closings:
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