Hartleys has been assisting ASX-listed resource companies from explorers through to producers since 1955, through numerous ups and downs in the commodities cycle. While the four or so years up until the start of this year have been tough for resource companies, 2016 has been a much better year and there have been good returns to be made.
We see another solid year ahead for resources in 2017, with strong interest across a broad spectrum of commodities. A lot of the money raised in 2016 has been exploration and study capital, which augers well for a busy 2017 with lots of exploration and development activity.
History shows that if the recent strong gold price environment is over then it would potentially be the shortest gold run ever seen, suggesting that there could be at least another year to go.
We have a strong list of gold companies we like and have been working with, including producers Pantoro (PNR), Millenium (MOY) and Ramelius (RMS), developers Gascoyne (GCY) and Eastern Goldfields (EGS), and explorers Duketon (DKM), Explaurum (EXU), Nexus (NXM), Emmerson (ERM) and Ausgold (AUG).
Internationally, we have worked with Beadell (BDR), West African Resources (WAF), Burey (BYR) and Cardinal (CDV).
The copper price has been disappointing for most of the year, but it has recently spiked which augers well for 2017. As a key component of batteries, it is also exposed to the same dynamics as the “battery minerals” including lithium. We have been working with RTG Mining (RTG), Altona (AOH), Hot Chili (HCH), Avalon (AVI) and Avanco (AVB) which all offer strong leverage to a rising copper price.
We have been working with RTG Mining (RTG), Altona (AOH), Hot Chili (HCH), Avalon (AVI) and Avanco (AVB) which all offer strong leverage to a rising copper price.
Nickel prices have risen around 45% this year on the LME, with most of the rally in recent months. We have been working with Buxton (BUX) and Cassini (CZI) to advance their nickel exploration plays. If the nickel price remains strong, we see potential for mining restarts in 2017 from companies such as Panoramic (PAN). Zinc is one commodity that has been consistently rising throughout 2016. In Zinc, we like Red River (RVR) which is planning to re-start its Thalanga mine, and Ironbark zinc (IBG) which is developing the very large Citronen zinc project.
The “battery metals” have had a big 2016. We have assisted lithium developer Pilbara Minerals (PLS), Kidman (KDR), Birimian (BGS), Core Exploration (CXO) and Global Geoscience(GSC). Corazon (CZN) has an exciting cobalt project that it is drilling. David Flanagan, who wehave had a long history with, recently joined as Chairman of Metals of Africa (MTA), which has a compelling graphite project.
Although coal has been strong this year, oil and gas has remained flat for most of 2016. We see this changing, and in that space we have assisted 88 Energy (88E), UIL, Pancontinental (PCL) and Melbana (MAY), who are all well positioned for an uptick in sentiment.
Unfortunately, the uranium price has consistently weakened this year and has not had the bounce many analysts have been expecting. We are positive on the outlook and if the uranium price recovers, it would be very positive for companies such as Paladin (PDN) and Peninsula (PEN).
Another interesting space is the fertilizer space, underpinned by a growing global population. Companies we work with that have good exposure to this space include Goldphyre (GPH), Danakali (DNK) and Elemental (ELM).
Of course another way to play resources is investment into mining services. This year the firm has worked with and/or helped with transactions for MLD, IMD, SRG, PEA and GNG, who all have good exposure a continued uptick in resources.