Expressing a view: Mining & Exploration – Imdex

Accumulating shares in Imdex (IMD:ASX) is a one way I am expressing my view amid a larger theme of the world requiring more mining projects to supply a host of ‘ingredients’.

The bigger picture is that I expect mining exploration and production capex to rise over the next decade. While the easy and low hanging fruit (resources) have been had, better technology with be required to aide financing and feasibility decisions.

Imdex also falls into another investment theme which I like being the testing, certification and verification sector.

Put it this way, it’s akin to owning the ‘pick and shovels’ coupled with technological enhancements which assist speed, precision, efficiency and cost savings.

Recently, Imdex shares traded down my longer term ‘Oversold Trifecta’ for only the 5th time in the past 15 years.

Those metrics are a combination of when the share price simultaneously trades 2.5 standard deviations below its rolling weekly mean, (at least) down to or below its 200 week moving average and registers a weekly Oversold RSI (Relative Strength Indicator) reading.

September 8, 2022
by Rob Zdravevski
rob@karriasset.com.au

#Imdex
#mining

* not personal advice
* do your research or see a licensed professional

Iron Ore to double dip

Iron Ore too….is yet to make a new higher high.

Last week’s intraday high of $132.30 remains shy of October ’21’s $132.60 high.

In addition, trading in Iron Ore futures, on January 13th, 2022 produced a bearish outside reversal day.

I see risk in Iron Ore equities. The bounces have been impressive and taking the ‘fat part’ of the trade should satisfy many.

The advance wasn’t accompanied with robust volume.

I think this market will hurt the latecomers who have bought in the past week.

Markets do that sort of stuff. Shaking out those who shouldn’t be there…..is part of a market’s modus operandi.

Intuition suggests that we’ll see a test towards or close to recent lows. Perhaps I’ll call it a ‘double dip’.

At that stage, we’ll watch for any new ‘lower lows’ or where we see a consolidation.

There are plenty of ‘gap-ups’ to back and fill and the recent rally in those equities gives many a second chance to exit.

For some, it could be a ‘get out of jail free’ card.

#fmg #rio #bhp #min #ironore

January 17, 2022

by Rob Zdravevski

rob@karriasset.com.au

Gold exploration declines by 55%

English: Pouring molten gold into ingot mold a...

The volume of drilling activity in the global gold industry has fallen by 55 per cent in the past 12 months, new data from research group IntierraRMG has found.

Less exploration means supply.

Less gold supply should mean a higher gold price, ONLY if gold demand stays steady or rises.

Such a scenario will benefit gold companies who have a proven resource.

Often, the best thing such a company can do, is to leave the gold in the ground rather than spending hundreds of millions of dollars trying to extract it.

Management who think that success is measured by how much gold they “pour” can prove to be a handicap for its company’s share price, especially when capital is scarce.

The pay cheque matters more than your brand

A news tidbit from the Australian labour front appeared in The Australian newspaper on Oct 7, 2011, raised my interest.

The story said…..

“Kevin Reynolds, the head of Western Australia’s Construction Forestry Mining Energy Union, yesterday described large resource-sector companies in the state as “bottom-feeding freeloaders who suck up labour trained by other people without contributing a cent”.  Mr Reynold’s call for the major resource firms to contribute to the state’s construction industry training fund was backed by home builder ABN Group’s Dale Alcock.”

I haven’t formed a distinct view on this statement or topic yet, however the one thing I have noticed increasingly, whether its the mining industry or financial services, employees over the past 10-15 years are working simply for the pay cheque more than ever!

Company or even career loyalty is not as common as I once remember. All you need to do is look at the employment history of people on LinkedIn. It is difficult to find tenures lasting longer than 18 months in some profiles. An employee’s clear intent on using your company and knowledge as a “step-ladder” towards something else is possibly putting employers offside.

Whether companies need to increase investment in “human capital” more than equipment or projects is probably a complicated question to answer.

When I started in the stockbroking business nearly 20 years ago, all I wanted to do was work as a stockbroker. I wanted to work for one of the big Wall Street firms.

Once upon a time, employees worked for what the company believed in, rather than solely for the pay cheque and puffing up their resumes.

 

%d bloggers like this: