Report Cover Page

Contents

Where are we in the Cycle?
Even before the Brexit vote, mining industry prospects were appearing bleaker as the US Federal Reserve flagged a reappraisal of its understanding of macro conditions against a dearth of evidence that policies had been effective in accelerating growth. More...

Market Directions
Resource sector equity prices were little changed over the week despite large variations in the prices within other sectors. Gold equity prices showed little leverage to higher gold bullion prices.    More...

Portfolio Performance and Positioning
Losses occurred across all corporate development stages with Phase II companies again suffering the worst. There were no significant changes to portfolio models. High cash positions have been retained in the macro model designed to take account of sector cyclical positioning.    More...

Stock Reviews and Rating Analysis
After a median share price fall through the cycle of around 80%, hundreds of early stage mining companies can show very strong bottom of the cycle capital gains even without recovering a material part of their earlier losses. At this stage of the cycle, seller exhaustion is a pre-requisite for market re-pricing which may not be the result of a specific event or a so-called ‘investment catalyst’. Remaining examples of exploration or development endeavours still trapped within cyclical low price ranges include companies such as Australian Vanadium (AVL), Bannerman Resources (BMN), Crusader Resources (CAS), Deep Yellow (DYL), Heemskirk Consolidated (HSK), Kasbah Resources (KAS), Mineral Deposits (MDL), MZI Resources (MZI), Potash West (PWN) and Thundelarra (THX).
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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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