In the short-term, zinc and nickel look reasonable based on their respective supply side constraints. We’re not getting carried away with the outlook for China in terms of demand, but equally we don’t expect a financial or policy crisis there in the short to medium-term. Independence Group is a predominantly nickel exposed diversified miner with a good balance sheet. Larger, liquid names with good management and assets, such as OZ Minerals, Whitehaven, Western Areas, and Sandfire Resources, should all be beneficiaries of any improved investor appetite toward resources. For microcap pure zinc exposure, we like Red River Resources and Heron Resources. Gold still has legs too, on our expectation of ongoing low real interest rates globally, and probable disappointment to the timing and magnitude of consensus Fed tightening.
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