More Bottom of the Cycle Leverage

John Robertson

PortfolioDirect

Mineral Deposits (MDL:AU) and Base Resources (BSE:AU) have several features in common: 80%+ share price contractions, mineral sands developments, African locations, both now in production and positive cash flows. As the chart of their relative performance illustrates, they now share the most gentle of share price recoveries although, given what has gone before, recovery might still be unduly stretching use of the language. The two companies are further examples of the bottom of the cycle leverage available to investors. Returns since mid-March have been 33% and 45%, respectively. Their greatly reduced risk profiles - operationally, financially and from an investment market perspective – warrant giving them some further consideration for inclusion in portfolios. Both have been the subject of PortfolioDirect rating reviews and have been included in the Phase II sub-set of the recommended PortfolioDirect portfolio. Mineral Deposits was added in March while Base Resources was initially added prematurely in September with the majority of the position added in March.


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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