Bullish or Bearish…The Year in Review
Author: Client Executive – Sonia Turner
With the ringing of the New Financial Year bell, also comes the need to take stock and look at the year in review. And I guess the question is, Bullish or Bearish?
Resurgence in confidence
The start of the year shenanigans at Diggers, was more tellingly back to larger and a much more positive crowd. Deals, mergers and acquisitions were hot on the floor and as the year has progressed so, have many of the projects presented to us throughout the 3 days. Blackham, Gold Road, Heron, Dacian, Pilbara, Pantoro and Sheffield to name a few have all taken a massive step closer to producers, giving us belief that there has been more substance behind this years projects.
Then, fast forwarding to the RIU Exploration Conference in Freo in February, it was literally standing room only as many poured into the Esplanade hotel clutching notebooks and freshly sharpened pencil to listen to a line-up of extremely positive juniors. The floor a mass of companies and investors with little space on the stands to speak of. Again the positivity all laid bare to see alongside the drill results and many this year already taking the next forward step from junior.
Lithium stands strong
How can we possibly lead a year in review without tipping a hat to Lithium, apparently it is definitely here to stay. With Tianqi going from a concept fly through video in September 16, to turning the first sod, and more recently announcing the fast track of phase 2 of the plant, all in 8 months. Pilbara Minerals over the last 6 months successfully raising their capital and will be ready to start works in September are not the only ones in a long line of hopefuls that we will carefully watch as the New Year begins.
Gold stays stable
So we turn to our stalwart Gold. It has been extremely conflicting for our Bulls and Bears and has had its fair share of ups and downs this year. Certainly with the introduction of Mr Trump to the White House, the increase of terrorist threats and the general political tension geographically, even though we are still the same price as last year, we have enjoyed a period of 9% growth this year. Furthermore, analysts are predicting that the bullish trend is yet to continue.
Exploration in vogue
Eddie Rig at Argonaut and Liam Twigger were extremely positive at the Market Outlook session at the February WA Mining Club Lunch. Liam saying that while the top end risk indicator of exploration isn’t currently attracting investment, anything that has a pathway to production and has resources, and people can see cash flow is going to attract interest.
The West Australian reported this month that Exploration Spend was up, and Michael Fotios of Eastern Goldfields confirmed that the key to the success of a project was the exploration spend. It was this exploration pathway that is leading to production, allowing him to successfully raise and bring the Daveyhurst project back on line.
Understanding the market and responding
One interesting point to note this year was the number of new collaborations with service providers, one of the big ones this year being Millennium whom through investment from the contractors were able to dodge the administrator. Ausdrill has also been a key investor in this area and commended for using their balance sheet to help reinvigorate the market.
Similarly, being able to understand and meet the needs of a cyclical market has also allowed Scope Systems to redevelop their Mining ERP system to meet the needs of those smaller companies at the bottom of the cycle. With increased need for exploration expenditure and more holes in the ground, so a more functionally rich business solution is needed than just the run of the mill accounts system.
Continuing to support mining operations
With 25 years of mining expertise and being able to utilise that knowledge in the R&D of our core Business System, Pronto Xi, Scope Systems has been able to offer our junior partners an exploration specific system. It is able to track all of their standard accounting functionality with the added benefit of also tracking all of their non-financial drilling and physicals data to accurately track the budget and actuals of their projects and leases.
As Fotios explained at the June Mining Club, modernisation of systems has been key to bringing Daveyhurst on line and Scope has also seen this through the demand of its mining systems, from ERP, through to its home-grown production data tracking system.
So in summary, from the positivity at Diggers to the crowds at Freo , the added tables at the WA Mining Club to Scope Systems own results, I would like to very proudly announce I am one of those Bulls.
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