Canadian Financing Activity in the Mining Space Continues Slide to Five-Week Low

Benjamin Cox |

Oreninc Index Continues Slide to Five-Week Low

The Oreninc Index continued its slide down for the week ending May 28, 2015. Total dollars announced fell to $52m, a five-week low. Three brokered deals were announced for $19.5m, a five-week low; no bought deals were announced for the first time in five weeks.

Deal making picked up for the week, with the most activity coming from Barrick Gold (ABX) (ABX:CA), which sold both it’s Cowal gold mine in a deal worth $550m and a 50% stake in its subsidiary that manages the Porgea mine for $298m in cash to Evolution Mining (EVN:ASX) and Zijin Mining Group Co (2899:HK) respectively. Gold continued its slide for the week, falling below $1,190 an ounce. Iron ore rebounded for the week after a down week last week.

While financing levels did decrease, it is encouraging to see the amount of deal making that is happening in the space. Still, these types of deals are more encouraging for producing companies, and junior exploration companies continue to struggle with getting any real extended foothold raising capital in the current market.

Index_Image_5_28_2015_01.png

Summary:

  • Number of financings dropped to 29, a three-week low.
  • Three brokered financings were announced for $19.5m, a five-week low.
  • No bought deals were announced for the first time in five weeks.
  • Total dollars fell to $52m, a five-week low.
  • Average offer size decreased to $1.9m, a five-week low.  

Major Financing Openings:

  • Junex Inc. (JNX:CA) opened a $19.5 million offering on a best efforts basis. Each unit includes a 1/2 warrant that expires in 36 months.
  • Avino Silver & Gold Mines Ltd. (ASM:CA) opened a $7.46 million offering underwritten by a syndicate led by Cantor Fitzgerald & Co. on a best efforts basis.
  • Aura Minerals Inc. (ORA:CA) opened a $6.1 million offering on a best efforts basis.    The deal is expected to close on or about June 1, 2015.
  • Northquest Ltd. (NQ:CA) opened a $4.44 million offering on a insiders only basis.  Each unit includes a 1/2 warrant that expires in 24 months.

Major Financing Closings:

  • Largo Resources Ltd. (LGO:CA) closed a $73.43 million offering on a best efforts basis. Each unit includes a 1/2 warrant that expires in 12 months.
  • NexGen Energy Ltd. (NXE:CA) closed a $27.3 million offering underwritten by a syndicate led by Cormark Securities Inc. on a bought deal basis. The deal is expected to close on or about May 26, 2015.
  • Denison Mines Corp. (DML:CA) closed a $15 million offering underwritten by a syndicate led by Dundee Securities Ltd. on a bought deal basis. The deal is expected to close on or about May 26, 2015.
  • Marlin Gold Mining Ltd. (MLN:CA) closed a $8.75 million offering underwritten by a syndicate led by Dundee Securities Ltd. on a best efforts basis.

Author: Paul Ostrow

Oreninc also publishes the Oreninc Deal Log, a daily list of all financing activity in the TSX, TSX-V and CSE resource sectors. Visit http://oreninc.com to see which companies and sectors to watch. Oreninc also writes custom reports for companies on effective capital raising strategies to help companies maintain long-term shareholder value.

Disclaimer: The views presented in Oreninc's blog reflect the opinions of the Oreninc Team only. We use the publicly available data we collect for the ODL to discuss greater market and financing issues. See Terms.

 

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
ABX Barrick Gold Corporation 15.45 -0.47 -2.95 15,558,354

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