2017 TRENDS
After a year of turmoil on the political front – Brexit, Trump, Syria, terrorist attacks in Nice
and Berlin – and inconsistency in commodity markets, only the bravest would confidently
predict what 2017 holds for the world of resources.
Instead of definitive forecasts, Paydirt has decided to shine a spotlight on the commodities, companies, jurisdictions and issues which are likely to dominate the headlines in 2017.
Five industry trends to
watch
A rebound for platinum
It has been a barren decade so far for
the PGM business. Industrial relations
action, government intervention and
underperforming assets have all contributed to the issues but the underlying
problem is the prices for palladium and
particularly platinum. The platinum market has been mired in GFC-level prices
for more than 18 months but some analysts are tipping a rebound in 2017.
In its 2017 house view report, UBS
predicted a rebound in both platinum and
palladium prices thanks to an expected
increase in car sales. This would provide
welcome relief to the embattled South
African platinum sector and could even
encourage Australian juniors to relook at
both African and domestic opportunities.
Juniors return to Africa and Latin
America
While Australian gold and base metalfocused juniors have enjoyed a strong 18
months on the local market, ASX companies with overseas projects have generally struggled to follow their lead.
However, with gold tipped for a rebound in the first half of 2017 and most
of the locally-focused junior stocks fully
valued, investors are
were worth. The lithium marlikely to start lowering
ket has been dominated by a
their risk profile in order
few players for more than two
to capture good value.
decades and while the rise
The process may
of lithium ion batteries has
already have started.
sparked a surge in demand,
The likes of West Afrithe industry is still opaque
can Resources Ltd and
and its future unclear.
Cardinal
Resources
This year should give us
Ltd (before a big presome answers as savvy
Christmas sell-off) encompanies deal their way out
Lithium players with genuine of projects they likely only
joyed breakout years
on the ASX and with projects could cash in this year secured 18 months previMark Connelly putting
ously. Birimian Ltd appeared
together a $250 million IPO for his Toro
the first to realise value from its lithium
Gold Ltd gold play, it appears West Africa
assets when it announced a $107 million
is attracting attention once again.
deal with Chinese firm Shandong Mingrui
It is far from the only location with
Group for its Bougouni lithium project in
gold potential. Amani Gold Ltd (formerly
southern Mali. However, in what could
Burey Gold) has been joined by Vector
be a sign of the difficulties facing lithium
Resources Ltd in the DRC and OreCorp
players this year, Mingrui pulled out of
Ltd is preparing to release a PFS for its
the transaction before paying a deposit.
Nyanzaga gold project in Tanzania.
The industry continues its wait for deal
Across the Atlantic, Barrick Gold Corp
to set a marker for the rest of the industry
has increased its commitment to a JV
with ASX explorer Alicanto Minerals Ltd,
Rush for the next specialty coma move which hints at an increasing inmodity
terest in Guyana and the wider Guiana
The lithium rush of 2016 will inevitably
Shield of South America.
be replaced by another commodity in
2017 but what will it be?
Lithium plays begin to be flipped
The best place to start the search
As juniors raced to secure lithium-rich
would be in the battery space which has
ground in 2016, many an investor was
already led to interest in lithium, graphleft asking exactly what lithium projects
ite and even nickel. Lithium-ion batteries also contain cobalt but with a major
portion of global supply coming from politically questionable sources in Central
and East Africa, end-users are increasing their search for “ethical” supply.
The end of 2016 saw a number of companies ramping up their cobalt exploration and development plans and Cobalt
Blue Holdings Ltd – set to be one of the
first new resources floats of 2017 – has
the Thackaringa cobalt project near Broken Hill as its cornerstone asset. Another
IPO, Ardea Resources Ltd, is also talking
up the cobalt potential of its West Australian tenements.
As with lithium and graphite, it is hard
to accurately forecast how the cobalt
Strong performances in the gold and base metals sectors could see
Australian juniors return to exploration in Africa and Latin America
PAGE 28 FEBRUARY 2017 AUSTRALIA’S PAYDIRT
To continue reading, please go to
www.paydirt.com.au/paydirt-digital