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Are we on the cusp of a resource sector renaissance?

The feeling on the street is one of growing but cautious optimism. Gold prices have stabilised and risen by around 17% in 2016 (A$ gold prices are up by 21%), silver is also up 21%, the market is coming to grips with a lithium ‘boom’, and we’ve seen solid rises of 25% for zinc and 11% for crude oil. There have also been more modest rises for other metals including copper, lead and nickel. The key driver of course remains Chinese demand, but on the supply side recent significant cut-backs are beginning to have a positive impact in terms of commodity price stabilisation.

With respect to equities, poor strategic decision-making and overly-ambitious expansion plans have caught out most of the world's heavyweight resource sector miners. Contrast this however with the high-quality resource juniors in the sector that we're following at the present time. These companies have learned to survive on the smell of an oil rag, executive salaries are modest and geared towards performance, directors often have significant personal stakes (hurt money) in their companies and there are realistic achievable growth strategies in place.

Smaller companies are also more highly leveraged to an eventual recovery in commodity prices and overall sector sentiment, something that is potentially already occurring. The gold sector has been a major beneficiary of strong US$ gold prices, with the A$ gold price recently hitting a record-high of $1,750 - which is above the previous all-time high of $1,730 reached in 2011 - a time when the US price hit $US1,900 but the Australian dollar was trading around $US1.10.

Real companies with real projects (not the‘lifestylers’) are gradually able to raise money and explore again, share prices are moving (in a positive direction for a change) as markets react to good news (rather than ignoring it). And nowhere is this better reflected than in the Australian Small Resources Index.


OPPORTUNITIES


With over 800 listed resource companies on the ASX, there are more investment opportunities available than most investors realise.

 

We provide comprehensive analysis of emerging resource opportunities. We offer investors the most informative and best-value resource equity service available.


Our reports are simple, concise and easy to understand by both big and small investors alike -and our research is 100% independent.


S&P AUST Index ASX Small Resources Index

A Clear Case of Winners &
Losers in the Commodity Space




15-Year Gold Price
Performance ($A)



Some of our Recent Strong Performers

Pilbara Minerals (ASX:PLS)
*Up 285% since initial coverage in Sept 2015

West African Resources (ASX: WAF) *Up 106% since initial coverage in Sept 2015

Metalicity Limited (ASX:MCT)
*Up 160% since initial coverage in Oct 2015

Oklo Resources (ASX:OKU)
*Up 106% since initial coverage in Nov 2015
  
Gascoyne Resources (ASX:GCY)  *Up 158% since initial coverage in Feb 2016
(*As at 30 May 2016)


Gavin Wendt

FOUNDING DIRECTOR &
SENIOR RESOURCE ANALYST


 Is the iron ore rally sustainable? Gavin speaks with CNBC



July 12-14, 2016, Frankfurt, Germany


121 MINING INVESTMENT
12 - 13 OCTOBER 2017

HONG KONG


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