A Growing Resources Renaissance
We are in the midst of an embryonic resource sector recovery. Quality smaller companies are once again able to raise funding for exploration, appraisal and development activities, markets are reacting favourably to good news, share prices are moving in the right direction, and the industry’s 'life-style companies’ are being left in the dust. In fact, smaller companies have strongly outperformed the sector’s heavyweights. Resource behemoths are being forced to live with the consequences of poorly-timed project expansions and expensive corporate deals.
Smaller companies by contrast boast management with significant 'hurt money' invested and their companies and run on the smell of an oily rag. They also more leveraged to strongly-performing commodities like gold (up 26% this year), silver (up 44%), zinc (up 55%), nickel (up 33%) - along with lithium and graphite. Nowhere is this better reflected than in the performance of the Australian Small Resources Index.