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.