Gold with Recovery and Strategic Themes

John Robertson

PortfolioDirect

Blackham Resources and Phoenix Gold are both aiming to develop gold prospects around historical mining areas in Western Australia but have several other attributes in common - in addition to their potential leverage to gold price movements. Both are taking advantage of fresh insights into areas of historical production to get better results than their predecessors. Both have clear plans to get production underway with unusually low capital requirements. Both have adequate funding. Both suffered large (82% and 59%, respectively) share price falls between July 2014 and later credibility damaging failures to meet expected development outcomes. Both have underperformed the ASX gold equity price index since July 2014. Both are rehabilitating their market reputations although, on this single measure, they differ because Blackham is more advanced. Both have similar and favourable valuation attributes according to the PortfolioDirect sector relative valuation model. Both are potential targets in regional consolidation strategies. Blackham has launched its own asset wrap-up while Phoenix has already attracted buying from two much larger industry players operating nearby.


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John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...

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