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.
Last week index score: 64.50 (Updated)
This week: 75.58
Prospero Silver (TSXV:PSL) received permits to drill its Bermudez project in northwest Chihuahua, Mexico.
Zinc One Resources (TSXV:Z) reported results from an ongoing surface-sampling at its Bongará zinc mine project in north-central Peru.
Castle Silver Resources (TSXV:CSR) signed a provisional milling agreement with Granada Gold Mine.
LiCo Energy Metals (TSXV:LIC) provided a drilling update on its Teledyne and Glencore Bucke cobalt properties near Cobalt, Ontario, Canada.
The Oreninc Index grew in the week ending November 3rd, 2017 to 75.58 from last week’s updated 64.50 as the number of brokered financings and bought deals increased even though the total raises announced fell.
The gold price was negatively impacted by the US unemployment rate falling to 4.1%, which is a 17-year low. With the Federal Reserve FOMC due to meet in early December, the market has priced-in the near certainty that it will increase interest rates to 1.25-1.50%. In the UK, the Bank of England raised interest rates for the first time in a decade to 0.5%. News flow, meanwhile has been low on geopolitics and dominated by Hollywood sex scandals. That could change abruptly as US president Donald Trump embarks of a tour of Asia. The US is a key ally of both Japan and South Korea—where it has based significant military forces—countries that feel increasingly threatened by North Korea’s push to develop ballistic nuclear missiles. The region is also of great interest to China and Russia, which oppose any increase in US presence. Let’s hope any explosions are restricted to the president’s Tweets.
Total fund raises announced decreased slightly to C$104.2 million, a two-week low, which included five brokered financings for C$68.5 million, a nine-week high, and two bought-deal financings for C$22.6 million, a three-week high. The average offer size fell however, to C$2.4 million, a two-week low, whilst the total number of financings announced increased to 43, a 21-week high.
Gold tread water for much of the week and closed down slightly at US$1,269/oz from US$1,273/oz a week ago. Gold is now up 10.7% since the start of the year. The van Eck managed GDXJ had a marginally positive week, rising to US$32.12 from US$32.10 a week ago. It is now up 1.81% so far in 2017. The US Global Go Gold ETF fared slightly better to close at US$12.24 from US$12.15 last week. The SPDR GLD ETFsaw inventories continue to sell down to close the week at 846 tonnes from 851 tonnes a week ago.
In other commodities, silver fell also barely moved despite some earlier volatility, closing the week at US$16.84/oz from US$16.87/oz a week ago. Copper too had a flat week to close at US$3.11/lb from US$3.10/lb a week. Oil continued its upwards climb and hitting its highest level since July 2015, closing the week at US$55.64 a barrel from US$53.90 a barrel a week ago.
The Dow Jones Industrial Average continued to move deeper into record territory as it closed at 23,539 from 23,328 last week. Canada’s S&P/TSX Composite Index posted a similar growth chart to the Dow’s and broke through the 16,000-level to close up at 16,020 from 15,953 the previous week. The S&P/TSX Venture Composite Index saw slight growth to close at 791.98 from 787.38 the previous week.
Summary:
Financing Highlights
Avesoro Resources (TSX:ASO) opened a C$25.88 million offering underwritten by a syndicate led by Hannam & Partners and Numis Securities out of the UK and Sprott Capital Partners out of Toronto on a best efforts basis. Funds will be used for the proposed acquisition of the Youga and Balogo gold mines in Burkina Faso.
Major Financing Openings:
Major Financing Closings:
Company news
Prospero Silver (TSXV:PSL) received permits to drill its Bermudez project in northwest Chihuahua, Mexico.
Analysis
The drill permit will see Prospero continue on its programme to rapidly test a number of targets under its strategic deal with Fortuna Silver.
Zinc One Resources (TSXV:Z) reported results from an ongoing surface-sampling at its Bongará zinc mine project in north-central Peru.
Analysis
High-grade sampling results are an encouraging indication that Bongarita and Mina Chica hold significant potential. Their potential will be more rigorously tested in the near-future by the upcoming drill program, which will better delineate and expand the known mineralization at Bongará.
Castle Silver Resources (TSXV:CSR) signed a provisional milling agreement with Granada Gold Mine.
Analysis
If the agreement comes to fruition, it will provide Castle with a revenue stream as it advances the exploration and development of its Gowganda property and will therefore subsidise the cost of building the mill it will need.
LiCo Energy Metals (TSXV:LIC) provided a drilling update on its Teledyne and Glencore Bucke cobalt properties near Cobalt, Ontario, Canada.
Analysis
Initial indications appear positive from the drilling programme with cobalt camp style mineralization seen in each hole. However, the proof of the pudding will be the drill assay results.
