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Michael Coulson's 2009 stock picks
Michael Coulson
Posted: Mon, 12 Jan 2009
[miningmx.com] -- Picking resource stocks at a time when the bear market for most commodities is still in full swing doesn't sound a very promising undertaking, but here goes.
One commodity that does seem to be in some sort of bull trend, as one would expect in an economic recession, is gold, so a resource portfolio lacking gold stocks looks a sure loser.
Indeed, it's tempting to stay entirely in that sector, but that would hardly be sporting. The two most interesting gold stocks have diametrically opposing attractions.
Harmony is the only gold stock that appreciated in 2008, a verdict that, whether the market realised it at the time or not, the attractions of Bernard Swanepoel's Harmony Way had faded and that his replacement by Graham Briggs was timeous.
Pamodzi Gold, on the other hand, was the sector's worst performer, with a 90% decline.
While I don't want to stuff my selection with gold stocks, I think two are not unreasonable. So I'll take them both - Harmony and Pamodzi.
Next, it's common cause that there'll be some attractive opportunities for the cash-flush to pick up, on attractive terms, sound prospects that in current conditions can't raise the cash to come to production.
Nobody in the sector is as cash-flush as
ZCI.
I know it's threatened with at least a suspension of its listing, which can be dangerous, as I well know. Despite being a shareholder in Msauli, I never heard another word from it after it was delisted.
I assume it was wound up in proper fashion, but for all I know the directors could have pocketed any remaining assets and decamped to South America. Still, I don't think that's a risk with ZCI.
I see that Miranda Minerals, one of the first companies I wrote about for Finweek magazine, is at last making progress with its coal venture in KwaZulu-Natal. That's another where the share price may have fallen too far, so in it goes.
Finally, fluorspar producer Sallies has been a huge disappointment for some years. This could be its make-or-break year; in hope it's the former, I'm taking a flier on it.
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