Why Small Resources Offer More Gains in 2017

2016 played host to a significant resource sector rejuvenation – and all indications are that this momentum will be maintained into 2017. This is reflected in the Australian Small Resources Index graph below, which rose by 70% during 2016. Not surprisingly this was driven by a dramatic performance by commodities right across the board during 2016. These include gold (up 9%), silver (up 16%), copper (up 17%), nickel (up 17%), cobalt (up 32%), lead (up 47%), crude oil (up 52%), tin (up 62%), zinc (up 66%), iron ore (up 81%) and coking coal (up 250%) - along with lithium and graphite. Three of our best-performing junior companies since our initiation of coverage in late 2015 include Pilbara Minerals (ASX: PLS) (up 206%), West African Resources (ASX: WAF) up 225% and Emmerson Resources (ASX: ERM) up 229%. Industrial metals will be the key during 2017, but I also anticipate a strong H1 2017 rebound in gold stocks, reminiscent of the strong start they enjoyed in early 2016, as the Trump honeymoon period draws to an end.

Gavin Wendt
Founding Director

Gavin has been a senior resources analyst following the mining and energy sectors for the past 25 years, working with Intersuisse and Fat Prophets. He is also the Executive Director, Mining & Metals with Independent Investment Research (IIR).

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