Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
ORENINC INDEX – Monday, January 29th, 2018
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Last week index score: 34.36
This week: 22.99
Zinc One Resources (TSXV:Z) received additional results from an ongoing surface-sampling program at its Bongará zinc mine project in north-central Peru.
Prospero Silver (TSXV:PSL) started drilling at the Pachuca SE project in Hidalgo, Mexico.
NuLegacy Gold (TSXV:NUG) reported further results from its Serena and North Iceberg Zones as part of a 16-hole fall drill program in Nevada, USA.
Avrupa Minerals (TSXV:AVU) provided an exploration update for its Alvito project in Portugal where work is funded by OZ Minerals.
The Oreninc Index fell in the week ending January 26th, 2018, as a lack of activity saw the metaphorical tumbleweeds rolling down Bay St with the index falling to 22.99 from 34.36 a week ago.
Conference season has begun with the Vancouver Resource Investment Conference and AMEX Roundup in Vancouver, Canada this past week. And whilst both events were well attended, interest from the financial sector in mining continues to be muted. This is peculiar considering that the prices for gold, copper and other metals have been riding high(er) since the start of the year.
February sees a number of banks hosting conferences for their own clients culminating in the BMO Metals and Mining event in Florida at the end of the month, arguably the best mining event in the world, and then the main exploration event of the year the Prospectors and Developers Association Conference (PDAC) in Toronto. Expect a lot of newsflow in the coming weeks and a pick-up in equity raises.
On the geopolitical front, all eyes were on the Davos conference of world leaders and leading businessmen last week. Whilst there was a lot of talk about equality, much of that seemed to be of the male-female kind rather than the rich world-not so rich world kind. US president Donald Trump was in attendance and surprised many people with the uncharacteristically measured tone of his discourse rather than his habitual tub-thumping.
On to the money: total fund raises announced fell to a paltry C$19.6 million, a three-week low, which included no brokered financings and no bought-deal financings. The average offer size fell to just C$0.9 million, a four-week low, whilst the total number of financings increased to 22, a two-week high.
Against this backdrop, gold continued its strong start to 2017 as the US dollar continued to show weakness.
Gold continued its recent growth spurt to close at US$1,357/oz from US$1,333/oz a week ago. The yellow metal is now up 3.1% so far in 2018. The van Eck managed GDXJ had an up-and-down week, to close slightly up at US$34.79 from US$34.40 after seeing an intra-week high of US$35.74. The index is up 1.9% so far in 2018. The US Global Go Gold ETF saw growth to close up at US$13.06 from US$12.84 a week ago after hitting an intraweek high of US$13.30. It is up 0.38% so far in 2018. The SPDR GLD ETF saw modest growth, adding a couple of tonnes to close at 848.14 tonnes from 846.67 tonnes a week ago.
In other commodities, silver saw a strong gain to close up at US$17.40/oz from US$17.02/oz a week ago. Copper also had a flat week to close up slightly at US$3.19/lb from US$3.18/lb last week after hitting an intraweek low of US$3.11/lb. Meanwhile, oil continues its upward climb to close at US$66.14 a barrel from US$63.37 a barrel a week ago.
The Dow Jones Industrial Average continued its climb to close at 26,616 from 26,071 last week. Canada’s S&P/TSX Composite Index saw a volatile week to close down at 16,239 from 16,353 the previous week. The S&P/TSX Venture Composite Index closed up at 890.80 from 880.44 last week.
Summary:
Financing Highlights
Royal Road Minerals (TSXV:RYR) opened a C$3.42 million offering on a best efforts basis together with a C$1.58 million offering on a strategic deal basis.
Major Financing Openings:
Major Financing Closings:
Company News
NuLegacy Gold (TSXV:NUG) reported further results from its Serena and North Iceberg Zones as part of a 16-hole fall drill program in Nevada, USA.
Analysis
As NuLegacy continues to explore it is becoming better able to target Carlin-style gold mineralization along structural corridors that have been identified by geophysical and geochemical data. The 2018 drilling programme will aim to further expand the Serena zone.
Avrupa Minerals (TSXV:AVU) provided an exploration update for its Alvito project in Portugal where work is funded by OZ Minerals.
Analysis
With the company undertaking the first, truly systematic exploration of the area, its considered early-stage exploration approach is resulting in the identification of copper and gold mineralization in a number of areas, which bodes well for when drilling finally commences around the end of March.
Prospero Silver (TSXV:PSL) started drilling at the Pachuca SE project in Hidalgo, Mexico.
Analysis
The completion of this program will also mark the completion of the first phase of Fortuna’s strategic investment. The drilling it funded was to determine which targets are the most interesting and highest potential and so following the completion of the Pachuca SE drilling, Fortuna and will decide which project it will enter into a JV to continue exploring.
Zinc One Resources (TSXV:Z) received additional results from an ongoing surface-sampling program at its Bongará zinc mine project in north-central Peru.
Analysis
The high zinc values augment previous high-grade results from samples collected at Mina Grande Sur, Bongarita and Mina Chica. With drilling to commence shortly, and 124 platforms permitted, the news flow over the coming months should be considerable and continual regarding the potential for Bongara to host economic quantities of high-grade zinc.
Source: www.oreninc.com
