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Contents

Where are we in the Cycle?
Some evident improvement in the cyclical position of metal prices leaves markets better positioned near a still below average cyclical trough.   More...

Market Directions
A sense of relief in financial markets over the Brexit vote impact on liquidity and growth has helped resource sector equities. Gold bullion prices have benefited from an emerging sense that low interest rates will last longer than expected just a few weeks ago.    More...

Portfolio Performance and Positioning
Phase III companies appeared to benefit most from the flow of funds in response to changing views about the financial market impact of the Brexit vote. Cyclical conditions still warrant retention of a large cash position as companies battle to sustain price rises. There were no changes to the portfolio recommendations .    More...

Stock Reviews and Rating Analysis
Danakali (DNK:AU) could validly claim to have the best resource development potential of any ASX-listed company. Its biggest investment headwind is its location: Eritrea. CEO Paul Donaldson argues strenuously that Eritrea gets a bad rap. There is no corruption. There’s no war with neighbouring Ethiopia. The government is keen to raise living standards and has worked cooperatively to improve infrastructure. The problem yet to be confronted by Eritrea and unaddressed by Danakali is how the transition to a new president is managed in a one party dictatorship without a constitution and no history of elections. Unfortunately, one man’s stable government can easily become another man’s anarchy when it is time to change. As long as that is yet to occur, Danakali risks a potentially dramatic loss of value at some indefinite time in the future.
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Although the statements of fact in this communication have been added from and are based upon sources E.I.M. Capital Managers Pty Ltd, the publisher, believes to be reliable, their accuracy is not guaranteed and any such information may be incomplete or condensed.

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