Report Cover Page

Contents

Where are we in the Cycle?
Without an improvement in growth prospects, a strengthening in the US dollar exchange rate looms as a near-term danger for commodity prices and associated equity values. More...

Market Directions
Resource sector equity prices stalled despite more buoyant expectations about crude oil prices but downward pressure from gold had an adverse effect. More...

Portfolio Performance and Positioning
Losses among Phase I stocks offset modest gains among Phase II and Phase III companies. High cash positions continue to reflect a shortage of companies successfully developing new projects. More...

Stock Reviews and Rating Analysis
Mustang Resources (MUS:AU), exploring for rubies in Mozambique, has been classified as a Phase I company and rated ‘3+’ on the five point PortfolioDirect rating scale. Mustang is unusually positioned for a mineral explorer insofar as it is able to achieve revenue from ruby sales arising from bulk testing and before a commercial resource is defined. Making a link with the nearby operating mine of Gemfields PLC is at the heart of the investment proposition. Investors will not have long to wait before getting a clearer picture of the outlook. The risk profile of the company, based on the standard PortfolioDirect criteria, is unusually low. Very low expectation risk offers correspondingly high leverage to future exploration success. It is premature to think of Mustang Resources as an alternative entry into the global luxury goods market although that is where its potential could lie in the longer term.
For company reports & ratings...

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.

All opinions and estimates in this communication constitute judgments by E.I.M. Capital Managers as of the date of this communication and are subject to change without notice. The publisher is under no obligation to make public any change in view about any matter referred to in this or any linked documents.

No references to past investment performance should be taken to indicate anything about future performance.

This communication is directed only to Australian wholesale investors and licensed financial advisers for information purposes and is not intended as an offer or solicitation with respect to the purchase or sale of a security.