Key Points

• Asian demand for gold still determining gold price
• US$ gold testing 2011 downtrend
• US Fed Funds Rate Hike is not negative for gold
• Global bond markets weakening again
• Block chain cryptocurrency boom is probably leading gold and commodities
• ASX Gold stocks now very attractive
• 1 July 2017 Gold Stock Portfolio prepared
• MPS Senior gold stock universe PER 8.4x FY2018 EPS (excl NCM)
• Emerging gold sector universe PER 2.5x FY2020 EPS

Preferred Stocks

ASX.EVN   ASX.NCM   ASX.NST   ASX.OGC   ASX.WGX   ASX.TBR   ASX.CDV    ASX.EGS    ASX.GOR    ASX.SBM    ASX.BDR    ASX.BLK    ASX.PRU   ASX.RSG   ASX.CYL   ASX.EGN   ASX.EXU    ASX.KIN   ASX.PNR   ASX.SWJ   ASX.TYX   ASX.WPG

Key Points

• US gold price up 10.3% in 2017 to US$1268/oz
• A$ Gold price back above A$1700.
• Asian gold demand remaining robust
• Australian Gold production forecast up 16% to 345t for FY20
• MPS Gold Producers Universe 17 stocks FY18 PER 7.1x, FY19 6.6x
• Universe gold production to rise 15% to 5.2moz (excluding Newcrest) by FY19
• Excellent opportunities in Australian Gold Stocks
• North American stocks picking up, royalty companies leading

Key Points

• Don't be put off by gold sector volatility
• Recent sell offs in gold equities give excellent buying opportunity
• Gold price in most currencies still in firm uptrend
• Global economic expansion well underway
• Major equity markets making new all time highs
• China crude steel output hits a record high!
• North Korea issue a furphy? KOSPI market at record highs!
• Stock selections  ASX:NST ASX:EVN ASX:RRL ASX:RSG ASX:BLK ASX:TNR ASX:SWJ ASX:CDV ASX:JCI

Action in the precious metals and gold sector equities over the past twelve months has been highly volatile and has been disguised by the net moves of a marginally lower price (~1.5%) for US$ gold, ~12% lower for US gold indices and the gain of  ~9% for the ASX:XGD Gold Index. The Quarterly Volatility (price range/last qtly close) in these same markets has been 9% for US$ gold, 21% for US gold stocks and 19% for the ASX:XGD Gold Index.  This is a lot of action. The sentiment in the sector however, especially here in the XGD, has been very poor over the past few months and some stocks have acted as if it was 2013 (-61%) MISERY TIME again.  This is on top of the 41% pullback in the XGD from its July 2016 highs to those Dec 2016 lows. This volatility makes it difficult for both investors and traders but those seeking yield and those utilising superior stock picking skills can still outperform the averages as has been the case since mid 2013. The bigger picture for these markets has been that the annual volatility in the XGD in the past decade since 2006 has actually been even higher at 28% with -21%, -26% and a -61% figures accompanying the gains of 28%, 29%, 38% and 54%. This volatility has made the sector stress-inducing and has pushed away many investors but the Dawes Points outlook is that the next decade should be much steadier with dividend paying stocks giving the market some defensive character and that higher gold prices should provide some large gains.  The typical post-new high pullback in the 2000-2008 bull market was ~25% so hopefully an upward trending market will make these sorts of pullbacks understandable and bearable. You have probably also noticed changes in the key Van Eck GDX and GDXJ ETFs have caused havoc as portfolios have had some structural changes on stock weightings.  Some stocks were increased or added and others were reduced or cut.   The triple weighted ETFs effects have been even bigger. Changes here in the ASX:XGD (S&P ASX All Ordinaries Gold Index) have seen the number of stocks rise to 27 for June Qtr 2017 after being 52 in 2011 at the top (8499 in April 2011) and just 20 at the low (1642 in November 2014).  I have asked this previously but is there anyone out there with a professional view on an index that has so much variation in the number of components? Having said that it appears the XGD at last looks like an index of gold stocks with the last non-gold company removed. With the increased population of the XGD market share of value turnover is rising above 4% and was 5% for each of the last two weeks of April. Whatever the position here it is clear that with the A$ gold price back up around A$1,700/oz and with the generally strong (despite some abnormally heavy rainfall) March Qtr reports out there some gold stocks that are just brilliant value at current levels. The tables below also show the high volatility but also it is pleasing to see market outperformance by some stocks in 2017.  In particular, two stocks referred to in Dawes Points in 2017, CDV (+104%) and SWJ (+68%) have provided some of the best performances and Dawes Points-preferred stocks NST and TBR/RND developing the Zuleika Shear gold fields, low cost SBM, WGX, GOR and PNR have also shone through. Site visit was made in February this year to CDV's Namdini Project in Ghana where the 4moz deposit has had drilling indicating depth extension from 350m to 550m and potential additional mineralisation along strike.   Market cap is around A$200m so with 6moz or more  we could be looking at A$35-40/ inferred oz.  The key feature here is the mineralising fluids passing through metamorphosed sediments, volcanics and intrusives to give 30-50m intersections.  Gold recoveries are straight forward and the strip ratio is low. Gold Fields has bought 6.4% on market plus a further 7% through listed options. A site visit to Stonewall's (SWJ:ASX) projects at Pilgrim's Rest in Eastern Transvaal provided further evidence of a major gold field here with 7moz already extracted from 43 mines over a strike length of 60km.  SWJ has released 905koz @ 11.1g/t at Rietfontien and 1.0moz @ 6.6g/t at the Beta Mine but these are just the start.  Gold production is scheduled for 2018 from upgraded existing facilities.  Substantial upside possible here. NST's Zuleika Shear activities have been outstanding with the high grade Rubicon-Hornet-Pegasus and Raleigh mines in the EKJV producing excellent production results but more importantly, exploration drilling at all these mines will result in a significant resource upgrade. NST will have the new 100% 50kozpa Millennium mine producing development ore by in the Sept Qtr.  NST also has a very active exploration programme along the Zuleika Shear with seven rigs drilling out a resource at the very exciting Paradigm project (107m @3.1g/t and 197m @2.4g/t) . This goldfield will just get better!  Don't forget ASX:TNR which is very well positioned here too. Special mention is also made of HAV and ABU since 1 July 2016. Dawes Points has had a couple of false starts with suggestions of gold stocks moving higher in a new upleg but with the recent pullbacks  it now seems clear that time frames are longer than expected so short term rapid gains are not yet with us. However, investors should note that many ASX Small Caps are being hammered so it is not just gold stocks! ASX XEC  S&P Emerging Companies Index 2002 -2017 This also suggests these stocks are now in coming into strong support levels and trading on good volumes. Nevertheless the outlook is unchanged. Gold demand from China and India continues unabated and is absorbing new mine production and Western inventories. The Fear Trade of banking collapses, Middle East problems, North Korea and debasement of currencies are also there but are not as relevant just now. The Bank of England recently released details of gold it holds on behalf central banks and commercial banks. I am not really sure what it actually means but it could be reinforcing the transfer of gold from the West to the East.  Almost 2,000t was removed from 2013 …… …with another 800t exitting the SPDR Gold ETF over much the same period... Substantial tonnages of gold have moved East and have been tightening the market in the West. The underlying strength in the US$ gold is being reflected in the gold price in other currencies and most are a few % stronger against the US$. Gold in US$ is just looking brilliant and a sustained break above US$1270 and more importantly above US$1300 should see a very strong move. The internal strength of US$ gold with the 2011 high interpreted as an `irregular' B Wave and the 2011 downtrend ready to be broken is very encouraging.  The next upmove if it happens will be a Wave 3 which is typically very strong. As noted, the trend though the various currencies is in line with this and A$ gold is already moving up.   A$ gold has averaged around A$1,550 for the past six years and A$1,600 for the past two.  The move back up through A$1,700 is suggesting much more to come. Note two important currencies where gold prices look to break much higher.

Gold in Euros.

Gold in Yen.

And most importantly in Indian Rupees, the currency of the biggest buyer of gold! India has the biggest demand for gold and gold is rising again in Rupees despite that currency rising against the US$.

Economic Outlook

Dawes Points continues to push the Global Economic Boom thesis and is encouraged by some very important recent data. The One Belt One Road (`Belt Road') across Asia to Europe is gaining traction with infrastructure spending picking up everywhere and is best displayed by crude steel production in China which hit a new record high rate of 847mtpa in March 2017. India achieved 108mtpa in March after finally exceeding the magic 100mtpa in January and will very soon pass Japan to become the world's second largest steel producer. China can not only be expected to have robust steel production but should see at least 5% growth in 2017 as this seasonal turning point has occurred at such a high output level. Investors seeking a play in this Asia-MENA infrastructure play should look at recent listing JC International (ASX:JCI) Calendar 2016 EPS A$0.16, Cal 2017 (E) A$0.18 and PER 4.5x. Iron ore prices, particularly sub-60% Fe ores, have been weak but as the low grade China port stockpiles are run down at these attractive prices it can be expected that iron ore prices will be firmer into the Dec Half of 2017. Higher grade iron ore products such as magnetite are in strong demand and the South Australia potential mega projects Iron Road ASX:IRD, Magnetite Mines ASX:MGT, Carpentaria ASX:ASX and Havilah ASX:HAV deserve further attention. The US economy appears to be gaining strength through housing, manufacturing and employment but it is interesting to see on the aggregate consumption side how the US Transportation Sector has increased its share of total primary energy by 30% since 1990 from 25% to around 33% today and the underlying growth in consumption has a robustness about it. It has been notable over the past couple of years that consumption of transportation fuels has shown double digit growth in many major economies.  The underlying demand for oil is probably far stronger that the market place appreciates.  Global consumption is now just over 95 MMbopd (~35bn bbls pa) and growing at 1.2-1.3MMbopd so it is going to be difficult to maintain output in the next few years.  Keep in mind Australia's largest oilfield was Kingfish in the Bass Strait with all of about 1.1bn bbls and Bass Strait itself has produced over 4bn bbls. Whilst Peak Oil is no longer fashionable it must be recognised that most conventional reservoirs outside of the Middle East are in decline and the exploration and development outlook for near term new non-OPEC oil supply is at the lowest level since the 1940s. The graphic below shows that in the past five years less than 6bn bbls per year has been found. Demand is still rising but supply is struggling to keep up. All these numbers, together with the aggregate figures given on consumption of the industrial metals suggests that the overall global production to reserves equation is increasing.  Higher prices are inevitable. So many markets are making new highs from the US, Europe, India and ASEAN and reflect strong underlying economic conditions. It is interesting that the North Korea issue is not rating highly on the market's radar. Most importantly, the Sth Korean KOSPI Index is hitting new record highs! What do they know that we don't?  Is reunification now about to happen? There is no FEAR trade here! Someone needs to turn on the lights! Barry Dawes BSc F Aus IMM (CP) MSAFAA I own JCI  NST, BLK, SWJ, TBR, TNR, CDV Call me if you would like to:-

• Set up a portfolio
• Participate in Section 708 capital raisings for sophisticated investors

+61 29222 9111 bdawes@mpsecurities.com.au Dawes Points #64 2 May 2017

Key Points

• Global equity markets breaking through major resistance to new all time highs
• China, India, ASEAN, Africa make up 48% of global GDP and growing
• US housing starts robust and housing sector stocks making 11 year highs
• World Feb 17 steel up 4.1% over Feb 16 (+7.8% annualised for 28 days vs 29 in 2016)
• China Feb 17 steel output 798mtpa up 4.6% YoY (+8.1% annualised)
• Rate of change indicators suggesting further steel production growth in 2017
• Non-OECD now exceeds 70% of global steel consumption
• Indian crude steel output exceeds 100mtpa for first time in Jan 17
• Iron ore price still exceeding US$80/t basis 62% Fe CIF
• All Ords targets above 7500 (+30%) by end 2019.
• Important stocks are ASX:BHP ASX:RIO ASX:FMG ASX:S32 ASX: NST ASX:WSA ASX:MLX ASX:MGT
• Gold sector BUY recommendation reinforced

Call me to discuss ways of participating  bdawes@mpsecurities.com.au  +6 2 9222 9111 At a time when the financial world seems to be mesmerised by the actions of (and the reactions to) the new Trump Administration in the US, concerned over rises in interest rates and also with renewed and increasing calls for an impending `US stock market crash', the global economy of at least 4,500m other people seems to be following its own course and is doing just fine. In fact, the foundations for the Dawes Points Global Boom seem stronger than ever. Major equity indices around the world are making new all time highs and those in Asia are breaking out upwards after long periods on consolidation. World steel output is showing encouraging growth and is indicating the Asian Boom is continuing.  Australian stocks and the A$ should soon be reflecting all this. Do review the price action in the major indices and note, at least from my experience and perspective, none appears to be overbought or over extended enough to produce the conditions that leads to sharp corrections.  Rising Fed Funds Rate and rising bond yields are positive economic signs and encourage maturing bonds to be redeployed elsewhere and into equities in particular. Earlier this year Dawes Points highlighted the rise and rise of the new growth regions as they took an ever greater share of global GDP. ASEAN and the other `Asian Tiger Economies' of the 1990s were joined by China in what became a 15 year economic expansion and as we view the next decade ahead we see India finally coming into the picture and we see Africa adding some perhaps unexpected spice in the very near future. Since 2000, the regions have doubled their combined share of nominal global GDP to almost 40%.  Sub-Sahara Africa has slowed in recent years but recent higher copper, gold and oil prices have provided new boosts and growth numbers should surprise many. Population growth has also been important.  These regions make up a growing 58% of the world's population. So seeing 3,300m Asians joining via the One Belt One Road concept with another 1,200m in Europe and indirectly, 900m in Africa, makes concentrating on 330m people in the US somewhat misplaced. Be aware of the influence of these countries in the Asian Century. IMF data 2015 So coming back to steel. The global steel industry is a fundamental indicator of industrial activity and the World Steel Association monthly data gives some of the best near-real time evidence of the world economy. The Feb 2017 figures have provided a 4.1% YoY gain but this is actually an annualised rate of 7.8% higher adjusting for the 29 days in Feb 2016. Looking the annualised China vs USA crude steel graphic it is clear China has maintained crude steel production at about 800mtpa for the past three years while the US has remained around 80mtpa. Looking more closely at the data, the obvious seasonal influences of Christmas (China is the fourth(?) largest Christian country) and the moving feast Spring Festival (Chinese New Year) soon after can result in long holiday periods and produce some remarkable seasonal variations but the smoothing 12 month and six month moving averages provide some key forecasting indicators. The six month moving averages allowed Dawes Points to call an upturn in China crude steel production early in 2016 and, after closely watching depleted steel mill steel and iron ore inventories, forecast a strong rise in iron ore prices to above US$80/t in 2016. This same data series is suggesting a good year for steel in China in 2017 with the latest data showing crude steel production for Jan and Feb to be 7.6% higher than 2016. The blue short term indicator is suggesting a seasonal bottoming but the red 12 mth moving average is well up and rising. The bigger picture says Non-OECD consumption is the key to global raw material demand and this graphic speaks volumes. Over 70% of steel is consumed outside of the OECD. The US produces about 80mtpa of steel from mostly electric arc furnaces (EAFs - 55% of capacity) that use steel scrap rather than virgin iron ore (in blast furnaces) and imports about 40mtpa.  An infrastructure programme might restart maybe 10mtpa of shut capacity but imports may have to rise by another 30-40mtpa. China has been the biggest growth story in steel production with the massive rise (just using the data from the graphic above) from 300mtpa in 2005 to the current 800mtpa with almost 95% coming from blast furnace iron. However, after a long period of promises, India finally exceeded 100mtpa in Jan 2017 and should grow more from here and play another important role.  Interestingly, over 50% of Indian crude steel comes from EAFs and with steel scrap reasonably tight India will be forced to increase the share for blast furnaces.  And iron ore. Japan and Rep of Korea have 23 and 30% EAF share. Iron ore demand can only increase and that for seaborne trade in iron ore to rise even faster. The Dawes Points forecast for US$95/t in 2017 has already been exceeded so after this more recent softness expect to see US$100 achieved later this year.  Demand is strong and supply is growing but not growing fast enough.  Marginal demand gives marginal prices.  Cost of production is irrelevant.  BHP, RIO and FMG will just print money. Keep Magnetite in mind.  Several new Australian iron ore projects are being developed as the next wave of iron ore capacity with three substantial developments planning to export through ports in South Australia.  Each will be developing a low cost mining operation from very different ores compared to the hard Pilbara types and will have magnetic separation as a key factor.   Magnetite concentrates are a mining product not an ore and can pick up a US$20 premium over 62% Pilbara hematites.   ASX:MGT in particular deserves attention.

Global Equity Markets

The equity indices around the world are suggesting something we have not previously seen in the major economic expansion since 2000. Expansion in market breadth!!! Firstly, look at the Dow Theory markets. The Utilities move first as power and water consumption increase as industrial output begins rising. This market is moving nicely to new highs confirming economic expansion. Shipments of goods are rising and are reflected in the Transports that are also making new highs. The Dow Jones 30 Industrials (DJIA) is making new highs showing that output and shipments are up and new employees and capex opportunities are being taken onboard as cashflows and earnings rise. Note that the DJIA is near the top of the lower trend channel but there remains massive space for this index to reach the upper uptrends of the next two channels.  I see no real overextending here. The S&P 500 is doing its job OK but the performance of the Russell 2000 Small Caps Index is providing that important BREADTH to the market to show all sectors are firing. Key indicators of economic expansion highlighted in Dawes Points include US housing starts (and the massive inventory shortage) and the Philadelphia Housing Index hitting new 11 year highs, the relative strength of the US Banking Sector and the peaking of the global bond markets. All are flashing US economic boom! The performances of cyclicals such as Boeing and Caterpillar with new basic industry stalwarts Microsoft and Amazon on fire means the indices have much further upside. The theme for a few years now has been that the US equities are leading with Germany possibly even slightly ahead. The UK after Brexit is showing great life and strength and now has a powerful upward breakout that has very far to run yet. The entire Asian opportunity is also developing with India probably even leading the US. Japan is running its own game but the equity market is rising and heading for the 1990 highs again. China as represented by the Shanghai Composite is steadily rising after the baseless hysteria in 2015 and was so strong it did not even pull back to its long term uptrend. Hong Kong is parallelling Shanghai but is probably just a bit ahead of the Mainland. The patterns for other Asian markets strikingly similar with South Korea now providing something very special with its very recent upward break out. Even staid Singapore is on the move. Taiwan is charting its own course but is now looking for a break out surge. Thailand seems ready to fly now. Even the Philippines looks ready to go. Here in Australia we are suffering from appalling politics so the All Ords has underperformed overall but the Gold Sector and Resources generally have provided some spark and strength. The data consistently provided in Dawes Points these past few years is that the structure of the resources industry of:

• Record consumption levels
• High capacity utilisation rates
• Declining ore grades adding to costs
• Low terminal market inventories

against a background of 3,300m people wanting a higher standard of living means resources commodity demand and resources commodity prices will rise and probably beyond your imagination. Producing resource stocks and hundreds of development hopefuls and explorers will have a marvellous decade. Accordingly, unravelling of defensive investor strategies and A$1,870bn in bank deposits should ensure my 7500 target at the top of the main trend channel is achieved well before end 2019. The picture is strengthened by the resilience of the A$ and recall that just over US$0.80 is a test of the 104 year (1913-2017) downtrend again. Dawes Points #62 called for a new upleg in gold and global gold stocks but was somewhat premature but the recommendation remains and gold stocks have recovered much of the early March decline. The US$ seems to be weakening as expected and gold should gain more interest in the short term to augment the strong underlying demand from Asia and beyond. US Gold stocks are in good shape:- And the GDX ETF is ready to move much higher. The ASX:XGD is now well placed for a break out move.  This outcome could be quite robust. Call me if you would like to:-

• Set up a portfolio
• Participate in Section 708 capital raisings for sophisticated investors

+61 29222 9111 bdawes@mpsecurities.com.au Dawes Points #63 28 March 2017 Barry Dawes BSc F AusIMM (CP) MSAA I own or control in portfolios all the stocks mentioned in this report.

Key Points

• Australian gold industry output up to 18 year high of 298t.
• Gold sector balance sheets strong
• Earnings surging with dividends and payout ratios rising
• Exploration adding to resources for most companies
• Resolution of trench warfare in gold price battle coming soon
• Silver and other `white metals ' moving higher
• Copper price has broken through US$2.75/lb, US$3.30 next
• Emerging economies now 39% of global GDP and 58% of pop.
• US expansion will push commodities and inflation higher
• US$95/t mid year 2017 target in iron ore already achieved
• Stock buys are ASX:NST  ASX:NCM ASX:WGX ASX:RSG ASX:TBR ASX:BLK ASX:CDV  ASX:BDR ASX:SWJ ASX:PNR ASX:PRU ASX:TNR ASX:TYX
• ASX:BHP ASX:RIO and ASX:FMG are also strong BUYS
• Contact me on +61 2 9222 9111 or bdawes@mpsecurities.co.au

The December quarterlies for the Australian industry showed the gold companies delivered strong evidence of operational improvement, excellent cash operating margins, builds in cash and also exploration success in extending existing mineralised zones and finding new.  Mine life expectations are being extended.  Earnings reports are also coming through with big gains and more dividends. Gold production in 2016 reached a 19 year high of 298 tonnes and should make a new record high in 2018. The sector is doing well and is awaiting the coming pick up in the gold price that will push valuations higher to test 2016 highs and the XGD.ASX to move above 6000. The cash builds and operating earnings are very likely to provide reported earnings improvements throughout the Gold Sector and with resulting higher tax payments by the sector we can expect more and higher franked dividends.  NST, EVN, RRL and RSG are leading.  Note RRL already has a 57% payout ratio for its interim dividend.  As industry capex flattens and more debt is repaid most gold producing stocks will be providing  >60% payout ratios. Dividend flows will also push sector valuations higher and the point is reiterated that gold stocks will be better dividend payers than bank stocks.    There is much to like about these gold companies and their managements who are already industry experienced technicians and who are now starting to learn about corporate future strategies rather than just survival. The operating ratios on ore yields, productivity and gold recoveries continue to improve and the competition amongst Australian industry players is healthy and beneficial. The geological assessments seem to be entering a new stage with sub pit discoveries, down plunge extensions and intersections along new splays featuring in almost every quarterly.  There is nothing like large positive cashflows to assist management give the geology department funding for resource extension and new target testing. The Zuleika Shear near and west of Kalgoorlie continues to impress with Northern Star kicking goals everywhere there (watch here and watch for mid year resource upgrades) and Evolution finding tantalizing evidence of additional sub parallel shears east of the important high grade K2 Structure for Frog's Legs.  Resource and production upgrades are coming here to what is currently the most exciting goldfield on the world. St Barbara, Saracen and Ramelius are also adding ounces with their efforts in WA. US-based Newmont is doing well in the Tanami and NST is upscaling its interests there. Newcrest now has operations running at full capacity and Westgold out of MetalsEx is hitting 300kozpa.  Smaller companies like Blackham and Pantoro are growing very nicely. The strength in copper (note the recent breakout in price and also it is outperforming gold) will be very good for Newcrest, OceanaGold and Evolution with their gold/copper operations that are already reporting negative gold production costs through copper by-product revenues. Site visits last month to Stonewall's elephant(just how big is this going to be?) in South Africa and Cardinal's growing Namdini resource in Ghana (far longer intersections (25-50m) than most Birimian gold mines in Ghana/Cote D'ivoire) confirm excellent potential for their shareholders. As noted, there is much to like in all these stocks and choosing the best plays is challenging. The performance since 1 Jan 2017 of some these stocks has been impressive with @DawesPoints favourites recovering well after the broad decline in the Dec Half of 2016. Westgold did best of the ASX Gold Index group with late comers Resolute and Ramelius starring and low cost St Barbara also performing.   Regis did well and Northern Star is still very cheap. Beadell is consolidating and might just be offering something special there in Brazil. A$51m in a recent equity raising supports this. Let's watch Beadell and the conceptual continental drift link to the gold deposits across the Atlantic in Ghana and Cote d'Ivoire.  Most intriguing. Source: Beadell Ltd Amongst the non XGD gold stocks, Cardinal, Blackham,  Pantoro and Gascoyne have done well and Torian will have the outstanding potential in its Zuleika Shear projects recognised soon.  Tyranna is also continuing to build resources on its Sth Australian tenements and getting better every quarter. Note again the Dec Half 2016 relative strength of Westgold, Resolute, Ramelius and Silverlake in the XGD and Cardinal, Blackham, Stonewall and Ark Mines in the Non-XGD. Stocks that outperform in down markets often have superior strength in the next upleg.

Dawes Points Gold Portfolios Performances 

(nontrading portfolios with stocks selection purchased on given dates) Dec 2014 Portfolio                           + 227 %    vs        XGD +181.6 % Jan 2016 Portfolio                            +98.3%    vs        XGD  + 81.1% Dec 2016 Portfolio                           +18.0%    vs        XGD + 21.3% Gold stocks with Australian operations have generally still been outperforming those in the ASX XGD with overseas operations. The weaker A$ has helped to some degree by providing positive cashflows but as the A$ gold price has been reasonably steady for the past five years it has been better managers and better ore bodies that have proven the difference. Note that the A$ gold price has had a nice A$110/oz upward kick to A$1,640 from near A$1,525 on the lower trend channel and is heading toward the mid channel at just above A$1,900. The top channel is around A$3,000. This sector can only get better! Australian gold production is good and stock performance has been strong.  In contrast, companies with overseas operations having high cost mines, poor operating regimes and debt have meant that many of the stocks have continued to underperform.   However, the leverage in these is high and will come with a rising US$ gold price but care needs to be taken on stock selection so choose well. Only Perseus, Beadell and Oceanagold seem attractive here.  Resolute was a later addition to the XGD so did not make this index series. Most visible public commentary from the bigger brokers and investment banks today is suggesting ASX gold stocks are currently fully valued and most public valuations seem to be pitched within 10% of current prices with very few outliers. The `consensus' is that these are fully valued and so are `sells'.   This lack of conviction for a higher future gold price seems strange. Similar comments are being made about BHP, RIO and FMG.  All `fully valued' by the major brokers and investment banks despite the now-excellent balance sheets, strong cash flows and surging dividends at the start of a decade long bull market in the main commodities of iron ore, copper, coking coal and oil. Aren't US investment banks wonderful! This is in strong contrast to Dawes Points.  My commodity and stock price targets are far beyond current prices and much higher for much longer. With firm prices expected for iron ore (the Dawes Points US$95 mid year target came four months early), copper and oil over the next few years, more appropriate end 2018 targets are BHP A$36, RIO A$90 and FMG A$11. The Dawes Points 2016 July General Resources portfolio is up 33.5% vs XMM 30.4%.

The Gold Market

Gold seems to be re energizing for another upmove with a break through US$1250 and on to challenge the previous near term highs above US$1360.  The 2016 breakout above US$1250 to around US$1375 has pulled back nicely to test the downtrend for a `Good Bye Kiss' and is now looking ready to move up gain. This trend break and the decline back to the breakout line for the Good Bye Kiss is notable in many of these metals markets so the probabilities are high for an upmove soon. The gold market action is being supported by a strong move in silver where a break through US$18 is suggesting all metals are moving.  The `Good Bye Kiss' test for silver has already been successful and silver can now rally further to US$21 and higher than that should bring rapid follow through. Palladium and platinum are looking very positive and copper has already broken out in what should be a very strong move. Palladium looks very strong.  >70% production from Russia.  Platinum has >70% from Sth Africa   Copper – Short term is very strong.  Long term is >US$5/lb.   All these moves have been clearly signalled in Dawes Points for quite some time and they all indicate tight markets where demand is robust and supply is restrained.  LME inventories are still critically low. Negative sentiment expressed through the futures markets has affected prices but this has only made metals cheaper for the natural buyer. When the sentiment turns there will substantial short covering and then natural buying will propel most metals prices much higher. Silver and copper are giving important BUY signals against gold.  Trend breaks and Good Bye Kisses abound.   General commodities are bottoming and a big rally is developing. Seasonal influences may influence prices in the short term but the power will soon be unstoppable. Gold demand is still, in my view, mostly about the relentless demand from Asia and the Middle East (with the notable addition of 900m people from Africa hopping on board too) that is tightening the market in the West.  This firm Asian demand is absorbing loose gold from weak hands and the usual superficial issues of global debt, US$ value, bond prices, banking system collapses and  inflation are coming but aren't quite with us yet. This growth in share of Global GDP and hence growing wealth is important to appreciate in understanding demand for gold.  China is huge, India is the key market but ASEAN is wealthier than India.  Africa is rising and better commodity prices for gold, copper and oil will boost growth further. Share of Global Wealth (39%) or Global population (58%).    Shares are rising in both. The period since the 1990s is of great importance in economic history as it brings in the rising living standards of great populations of this world for the first time. Firstly the 400m in ASEAN (expanded to 650-700m with the inclusion of Vietnam and Myanmar) then almost 1400m in China, and now India (1300m) and with Africa with its 900m and growing GDP bringing it together. Whether you look at population or GDP the numbers are still growing for people who want higher living standards. In the US itself the economy continues to improve and higher Fed Funds Rate levels are inevitable and bullish for gold.  And negative for T Bonds and the US$. The US economy seems very robust with housing leading but still playing catch up with a large inventory deficit of as much as 4 years demand.   Housing sector stocks are breaking to new 11 year highs.   And these new generation basic industries-  Microsoft and Amazon - are in strong uptrends. And the US banking sector is loving it.   US inflation picking up again and circulation of money is gaining -  Federal Reserve Bank of St Louis   President Trump's actions are interesting and unpredictable but so are the responses from the broad cabal of vested interests relying on receipt of public sector funding that is financed through the bond markets at today's low interest rates as discussed here previously.  This public sector largesse on cheap money is coming to an end. This cabal of related interests is fighting a tough rearguard action though. As to the impact of US politics on the gold market it is difficult to say.  What way and how will the US T-Bond market be affected and hence what will be the direction of the US$?  The expected oversold bounce rally in US T-Bonds has not yet eventuated so it may just be a matter of further weakness ahead in both US bonds and currency. A near term rally here to test the US$1360 level for gold will probably bring a pull back for a month or so but then, going forward, gold might be very strong in the Dec Half of 2017. Here, moves above US$1360 then US$1400 should give probabilities of US$1550 being tested, then US$1750 and then reaching the old high of US$1923 from Sept 2011. Above that, who knows, but once any of these levels are breached it could be quite a quick move. The battle between buyers and sellers has been robust and drawn out for the past four years but the character of the market is suggesting a quick resolution might apply once US$1360 is exceeded as noted above. Gold has been fighting in this tight US$250-300 range for almost four years.  Resolution and defeat for one side of the market should mean a strong move in favour of the other.  I favour the longs! The gold stocks are looking very firm and here on ASX and the North American XAU is moving higher after a good pullback. whilst GDX, the Van Eyk ETF, is under heavy accumulation. GDX ETF  - under accumulation Gold stocks will be outperforming gold for quite some time yet. And Gold Stocks outperforming general stocks for a long time too! This is all good news for gold share owners and for owners of all resources shares. The Road Map for the next few years is becoming increasingly clear and the global reluctance to invest in the Resources Sector is being tested daily. The opportunities are enormous and the cash on the sidelines in Australia was A$1870bn at last available data in Sept Qtr 2016*. Don't miss out. Call or email me to join in this vast wealth making wave ascending beneath us. bdawes@mpsecurities.com.au and +61 2 9222 9111. (*Data now no longer available from the RBA – is the RBA also part of the cabal – increasing salaries but shedding workers and cutting services?) I may own or control in portfolios all the stocks mentioned in this report. Barry Dawes @DawesPoints #62

Key Points

• Gold prices in important major bull market
• New upleg in its infancy
• US$ now peaking?
• ASX Gold Index up 30% from Dec 2016 lows
• US XAU up 22% from Dec 2016 lows
• Australian gold production set for new highs >314t by 2020
• ASX Gold stocks still very cheap
• A$ and gold stock relationship still robust
• Commodity boom underway
• Global inflation pressures rising
• Dawes Points Gold Stock Portfolios +192% (2 yrs), +78% (1 yr) +6%(2 mths)
• BUY ASX Gold stocks NCM, NST, EVN, SLR, RSG, RRL, BLK, CDV, CYL, TBR, TRM, PNR, AUC and TNR

Contact me to invest in these and much more bdawes@mpsecurities.com.au +612 9222 9111 From my perspective, 2016 was a very significant year for gold and it provided a rally from an important low at US$1045 in Dec 2015 that is considered to be the 62% correction low from the 10-12 year bull market high US$1923 in September 2011. The rally into 2016 reaching US$1377 in July was a 32% rise in just six months but gold gave up 76% of the gain to fall to a low of US$1124 in December. The rise in gold now to US$1200 in January 2017 is considered to be the next step in this powerful bull market in gold that should run for many years yet. The long term US$ Gold Price graph here clearly shows 10-12 years (was 1999 or 2001 the real low?) in the first upleg that rose from US$246 to US$1923 (US$1677/oz or 680%) and after the 4 year correction back to US$1045 has again moved higher and has been regaining price. It is moving up again and is currently flirting with US$1200 but much higher levels are very likely and very soon. Gold, however, is still now very much oversold medium term and market sentiment had become very negative again so a decent rally is now highly probable. I also like to view gold from an Elliot Wave Theory point of view to better understand market sentiment.  Elliot Wave Theory is an art, not a science, and each practitioner has its own interpretation and many are very experienced and successful.  Some are not so good and I don't regard myself as a true practitioner however I have found that it is probably more useful to just follow the market sentiment aspects of the waves. To put this in perspective, it is again worth repeating the well known comments from legendary fund manager Sir John Templeton. `Bull markets start in Pessimism, rise in Scepticism, mature in Optimism and die in Euphoria.' This sets out the three legs in a typical market that represent

• Disbelief (Scepticism),
• Optimism and
• Euphoria.

In between these legs we have the pull back after Disbelief (Pessimism – yes we told you it was a false rally!  And let's mark all prices down and let's build up a huge pile of cash!) and then after Optimism is the correction that is the Opportunity to `buy the dips!' before we all go to Euphoria. Simple stuff but it is amazing how well it works. Just human sentiment! When we look at this 10/12 year bull market in gold there was plenty of Pessimism and Scepticism and I can assure you there was not a lot of Optimism in 2008 at the intermediate high and certainly no Euphoria in 2011 at US$1923. Recall that the Sub Prime problems became obvious in 2007 and I can also assure you immediately thereafter clients lost any Optimism despite gold and oil rising to new highs in 2008. Market breadth shrank as small stocks declined despite strong gains by market leaders.  Market participation declined sharply as both large and small investors fled equities. The US$1923 high was not even confirmed by the gold stocks which had already decided to start heading South.  Certainly no Euphoria. This is where market sentiment is so important. Earlier Dawes Points highlighted the longer term outlook of the supply and demand for gold where supply made up of mine production and gold scrap was being exceeded by demand for jewellery and bullion from Asia (mostly China and India) and by new central bank purchases.  Economic growth in Asia together with rising personal disposal incomes will just keep Asia buying gold for many years yet. This supply/demand deficit also means the free and readily tradable gold in vaults in the West has been reduced and over the period of the last decade this may be by a significant amount. This relentless transfer of gold to Asia must eventually result in market tightness for physical gold in the West.  It must be expected at some stage that this market tightness will bring about a sharp upmove in gold and bring about the normal rapid price rises that occur in market tightness in commodities.  No idea yet on when, but you will certainly notice it when it eventually happens. The role of COMEX with its `paper' futures market (with many times gold bought and sold in `paper' oz for each one oz as registered for delivery in COMEX inventories) certainly seems lop sided and eventually dangerous.  COMEX has only 1.946moz of Eligible Gold Inventory and 7.634moz of Registered gold. These features alone should underpin gold price rises. In contrast to the gold peaks in 2011, we know most commodities such as oil, the industrial metals and the CRB Index all peaked over 2007-2008. Even platinum did not make a higher high in 2011. Only gold, silver, copper, tin and a couple of other commodities made higher highs in 2011. This CRB Index shows the 2008 and a lower high in 2011 then falls to below the 1974 levels in this index (clearly oil and all the metals didn't reach those sorts of lows so the soft commodities must have had a very rough time!) This makes gold's move in 2011 against general commodities, in a deflationary environment and often with a rising US$, very powerful. The Wave 1 Disbelief to US$1032 was encouraging but the Pessimism was deferred for a couple of years until after a new high at US$1923 that was 90% higher than US$1032!  This was a strong move but was never accompanied by Optimism nor Euphoria.  Gold stocks peaked in April 2011, nearly six months before gold in September, and many smaller gold stocks hardly rallied at all after 2008 so these highs in September were not `confirmed' by the broader gold markets.   As stated above, no `Euphoria'! The Pessimism leg saw gold decline 62% to its 2015 low which was actually still 3% above the Wave 1 high in 2008. So if Wave 2 ended at US$1045 then we are now in the Optimism upleg and have just finished the first correction . The gold market a truly fascinating arena where so many players have vastly different game plans and each participant has its own perception on it all.  Some players are very big and are constantly at the interface between buyers and sellers and others can be small and are coming and going on a whim to buy physical or futures.  Is gold just insurance or is it going to be the last asset standing when all the world's debt leads to a deflationary asset implosion.  Or a hyperinflationary inferno as politicians debase their currencies? Or is gold just really jewellery that stands the test of time? It is probably all of the above, and a lot more, and it will just depend on how everyone in the market place views it at any one time.   And viva la difference! Whatever the true drivers of gold the market is telling us that it is in a bull market. I have pointed out several times over the past few years that this is a very powerful bull market for gold and I consider it is still in the early stages of a multi decade advance. The Big Picture is still best provided by the Barrons Gold Mining Index extending back over 75 years to 1939.  This is the longest time series I know of for a fair market for gold instruments, especially since gold was fixed under the Gold Standard until 1971. The low in early 2016 in North American Gold Stocks was extraordinary in a long term perspective with this Index picking up the 1939 uptrend and essentially matching the 1969 highs, the 1982 lows and those in 2000. The index coming back in 2016 to almost the same low level was not with gold at US$246/oz but at  US$1060/oz so certainly suggests an oversold position, on an industry that was producing substantially more gold even if it had paid too much for new capacity, acquisitions and operating costs.  And had too much debt. This is a very powerful market trend as well and supports technical targets far above current levels. This 2016 US$1045 low was clearly Pessimism writ large and would have technically provided a Wave 2 low in US Gold Stocks.  Note as pointed out above that bullion did not confirm these 16 year lows.  Gold's 2015 bottom was at a level 325% higher than the 2000 period lows. The wave count on the US XAU Philadelphia Gold Index maps the last 16 years very well and heralds the major Wave 3 upleg underway now. The market sentiment really did ring the bell for us again in December 2016. So.  The next market leg should be up from here and if all the components of supply and demand continue their onward march - no significant increase in gold mine production (outside of Australia – see below), no significant increase in scrap supply (all Aunt Mary's jewellery has already been sold off) central banks are still buying, Asian demand keeps rising and ETF holdings may increase or decline. The deficit should still be running and as already pointed out there is a vastly reduced inventory of tradable gold available in the markets. So Wave 3 should be just as powerful as Wave 1 with its `Irregular b'. The battle royal between the bulls and the shorters should be fun to watch and if you are on board with the bulls it will be a great ride. We can start by looking the at Van Eck Gold Stock ETF GDX. Massive volume over the past year as institutional investors recognise the earnings, cashflows and dividends from the sector. Interestingly, gold and gold stocks have tended to track each other closely over the past six months but this graphic is suggesting to me that gold stocks might be ready to outperform bullion from here. The bigger picture can again be seen in the US T Bond market. The 35 year Bull market in bonds is now over for the world.  Overpriced, risky issuers and over owned.   Currently ready for a rally but the longer term position is not looking good for bond holders or issuers. And Gold is starting to look very good against the 30 year T Bond index and looks like it will head much higher soon even if bonds also rally from their oversold positions. Interesting! As noted in Dawes Points #60, a sovereign bond is essentially the currency with a coupon.  As the one goes, so does the other.  Another observation was that instead of 2017 being a year of a strong US$ it just might prove to be just the opposite.  Will this cross trend line put a lid on the US$?

The Australian Gold Sector

The external picture seems to be strongly favourable for gold and here in Australia the market is reacting accordingly. The gold price in A$ is around A$1,600, which is much the same as the five year average, and is oversold and at the bottom of the uptrend channel.  Only one way to go here and that is up! The ASX XGD Index is up an amazing 30% from the 3345 low in mid December.  The low that Dawes Points #59 called at the beginning of December was about 10 days premature but the XGD is still up 13% from that entry point and the 2 Dec 2016 portfolio is up 6.3% to date since then. The longer term is still for strong action after the 226% rise from the Nov 2014 low.  We didn't quite get the 6000 level I was targeting but a 226% call from  1 Dec 2014 isn't too bad. The market correction chart shows an extreme 41% pull back from the 2016 high but that is now only 25%. Gold stocks are regaining market positioning now with over 4% market share with some recent weeks actually showing >6% market share of All Ordinaries turnover. And against the A$ gold price the XGD  is still cheap. The Australian Gold Sector operations are doing really well and my projections on Australian gold production are being again upgraded so that we just might see a new high above 1997's 314 tonnes in gold production by 2020.   The gold industry was badly affected by the decline in the market for gold stocks and exploration expenditures fell over 50% from A$850mpa in mid 2012 to just A$425mpa in mid 2014.  It has since climbed over 50% from the lows to almost A$650mpa. The readjustment of the cost structure has also probably meant that far better value has been achieved for each exploration A$ spent. Exploration has added to resources for companies like NST, EVN, BLK, SAR and GOR and many discoveries have been made at brownfields and greenfields sites.  They might not be front page news but many are of great geological and economic value. Performances by ASX Gold Stocks The strong run up in ASX Gold Stocks from Dec 2014 brought about that 226% increase in the XGD to the high in July 2016.  The rising market helped most gold stocks but it is interesting to see the performances of stocks after the July highs. Some have been late starters but some othes have values that were holding up despite the 41% XGD fall. The leaders NCM, EVN, NST, RRL and OGC have done well  but within the XGD stocks SLR, RMS and RSG have shown excellent relative strength and have outperformed. Amongst the other gold stocks followed and not in the XGD and doing well are CDV, SWJ, PNR and AHK. This relative strength continued into 2017 with excellent performances by SLR, RMS, RSG, BDL, DCN, SAR and PRU.  Amongst the smaller stocks, PNR, BLK and AUC outperformed. Whether it is new growth stories or bouncing from oversold positions, there are good returns to be made. The Big Picture also has to bring in the A$. A declining bond market, rising commodity prices, a global economic boom and rising inflationary pressures means a stronger A$.  Export revenues are already picking up and will surge further. Gold stock investors should not be concerned about a rising A$ because the A$ gold price will be rising so much faster. This graphic provided a remarkable R2 correlation of 0.92 for the 20 years to 2013 and so where the US gold stocks go so goes the A$.  The volatility of the past few years has reduced this to 0.62 but both the A$ and the XAU are rising strongly again. And this little gem of the A$/US$ with the 100 year downtrend of the A$ against the US$ brings us a great philosophical challenge.  What will Australia be like with its currency again above parity with the US$?  What sort of world will be out there?  Global Economic Boom perhaps? The volatility in the US$/A$ rate is great but the downtrend is now only US$0.80 and not at the US$0.95 of 2008 and US$0.90 of 2011.  The A$ is bouncing back to above AUS$0.75 and so US$0.80 won't seem too far away. The evidence is still very strong for substantial gains to be made in gold and gold stocks. Try to think in big picture terms and gold is the ultimate asset in all scenarios. The really Big Picture is the US$100tn value in the global bond markets seeking a safer home.  The flow from bonds to equities is becoming clearer each week and the next step is to access and tap the A$1870bn in deposits in Australian banking institutions to flow into the economy again and into the Australia equities market. This flow of capital funds is fundamental to the performance of most of the global markets.  US$100tn of bonds and about US$70tn of bank deposits will provide funds for equities, commodities and gold for many years. Resources commodities are doing well and whether it is gold, silver, copper, oil, LNG, iron ore, coking coal, platinum, lithium, cobalt, uranium, Australian East Coast gas or zinc the pressures are building. The stars are aligned, the investment opportunities abound and the decision is yours. This basic resources sector strategy has been consistently and firmly underpinned in these Dawes Points over the past four years and the world is delivering. Contact me. Call me. Don't miss out. bdawes@mpsecurities.com.au     +61 2 9222 9111 Barry Dawes BSc F AusIMM MSAA Executive Chairman Martin Place Securities #61 13 January 2017 I may own or control in portfolios any or all of the stocks mentioned in this report.

Key Points

• Global growth continuing
• Global bond market has peaked
• China and India activity picking up
• Metals consumption hitting further new records
• Inventories still very low
• Metals prices breaking higher as long term downtrends breached
• Iron ore heading for US$80/t
• It is not just about gold
• Want to invest and outperform a strongly rising resources market?

The latest economic data coming from China and India is indicating a pickup in growth in GDP and Industrial Production and the US seems to be doing OK as well. It may be the belated impact of QE from US, Europe and Japan and it just might be that global sentiment is improving and that the influence of the doomsayers is now waning.  No Brexit Crash, no October Seasonal Crash and no End of the World so far. The build up of cash has continued and the search for income remains but it is clear that the extreme lows in bond yields have now passed and we are now heading into a very different era that will see many changes.    The evidence from the resources sector is that prices are now rising after almost eight years of decline and will now add to inflationary pressures rather than subtracting from them.The last three Dawes Points have discussed many major new developing trends in the drivers of the flows of capital between sectors but the Bifurcation is clearly established and inflation is picking up.The growing flow of positive data from China and India is reinforcing what the commodity and equity markets have been saying for some time and the price responses are now as expected.Recent economic data from China shows pick up in PMI figures:- Source: Capital Economics and India too:- These are both showing improving economic conditions.Note that China takes ~50% of all metals and India is finally beginning to hits its straps with >8% GDP growth.   Aggregate figures continue to show consumption is growing in the major metals and the Composite Index shows LME metals are up 29% since the 2008 lows and steel is 41% higher. Sources: ILZSG, Copper Study Group, Tin Institute Keep in mind this graphic for steel and think of it as a proxy for all metals. Don't just focus on US or European activity or consumption data! The average underlying 16 year CAGR for demand for LME industrial metals is 3.24%pa but in more recent times the individual metals are showing very different paths and the underlying trend is still firm. Some of the growth numbers are quite robust so the increase in net new capacity required is extraordinary.  Old mines underperform and even run out of ore so the new additions need to be even higher.Metals consumption is still at record levels and should accelerate after the last two years of slower growth.The expectations here are that deficits will apply to most metals for the next few years.To match the consumption growth rates metals mining and processing output will need to be higher.  Higher prices will always bring about increased output but new capacity is needing ever-longer lead times so the pressure will be on prices to the upside. Copper needs another Escondida each year for the next three years.  It is the world's largest copper mine with 1.2mtpa contained copper.How many times have you been underwhelmed by the performance of that new project or disappointed by blue chip Rock of Ages Ltd quarterly production?   Gaining that new supply of metal is never easy whilst maintaining existing capacity isn't either.The net result is of course that markets will remain tight and any supply interruption will rely on the inventory buffer.   The LME inventory buffer is not very large at present so, again, the pricing pressure will be to the upside. So coming to prices, we have seen a very active 2016 with good improvements for LME prices for aluminium, lead, tin and zinc as they have followed gold and silver but each of these metals has its own supply/demand character that needs to emerge beyond just sentiment.This Composite US$ Price Index of the six major LME metals is in the process of breaking a five year downtrend and should it do so would provide a very good year for LME metals in 2017. But the composite is disguising the performance of the individual metals. With each of these metals it is important to note these points:-

Metal	Commentary
Aluminium	3 year reduction of LME inventories from 5.5mt to just 2.2mt
Copper	Supply/demand deficits looming
Lead	Primary mine production
Nickel	Unwinding of nickel pig iron issue reducing LME inventories
Tin	Strong price performance in 2016 – No LME inventory
Zinc	Strong price performance in 2016 – Big supply shortfall in train

These all suggest supply problems in 2017 and higher prices.The shorter term price histories below suggest tin and lead have already broken downtrends and are ready to rally strongly over the next few years.  Zinc, aluminium and copper are close to breaking out as well and nickel seems to need a little more time but it should be very strong later in 2017. Aluminium Ready to break downtrend and head much higher.   RIO will be a great beneficiary. Copper Ready to break downtrend.  Great for the leaders BHP and RIO. Lead Lead is not a very glamorous metal but it has held up better than the other metals for almost a decade.  Primary lead is only about 40% of total refined lead production and depends on recycled secondary scrap.   This metal could become very tight.  S32 will benefit.

Nickel

The nickel pig iron issue is close to resolution and LME inventories are declining after the big build up.  Indonesian and Philippine iron-rich nickel laterites were very attractive to stainless steel mills and far cheaper than nickel metal.  Export restrictions have now cut the supply of nickel pig iron feed so LME metal levels are declining at last.  2017 should be much better to nickel producers and many of those idled mines may reopen next year. Tin Downtrend broken and much higher price targets generated.  Small companies and MetalsEx to benefit.

Zinc

Zinc looks very good for a strong run in 2017.  Closure of several mines over 2015-2017 will leave a significant supply gap.  Smaller zinc players will have some very good years ahead.

Iron Ore

The resilience of iron ore matches that of steel and reinforces the views expressed here over the past year or two about China and the global economy.Steel over the past decade has been stronger than most of the LME metals and it is doing well.China is still pumping out steel to local and international markets and the steel mills are making money again at last. The net effect of stronger consumption demand and also steel mill inventory restocking has been to increase demand for iron ore.  And as domestic production has declined due to low prices so has import demand risen.A recent visit to Fortescue's brilliant 170mtpa iron ore operations reinforced the positive outlook for iron ore.  The demand position is robust, inventories are at low levels at ports and mills and steel mills are profitable again.  FMG expects higher iron ore prices into 2017. And iron ore prices have been rallying.  I am still looking at close to US$80/t by year end.  Will I get there? Other steelmaking raw materials have been good with coking coal surging further and is now above US$240/t.  Manganese has been better and cobalt is turning up again.

Cobalt LME

All these improvements in metals prices will be good for the major mining companies and the hundreds of explorer/developers listed on ASX.Existing producers will have strong cashflows and the emerging producers will have market conditions that will allow the raising and application of capital in a far more cost competitive environment than existed in the 2008-2013 Resources Boom in iron ore, LNG and coal that literally crowded everything else out.   The evidence just keeps building up to the Dawes Points Global Boom that will bring an outstanding period for resources. Hope you are on board. Contact me to benefit from all this. bdawes@mpsecurities.com.au   +61 2 9222 9111 I own MLX, BHP, RIO, S32 and FMG. Barry Dawes BSc FAusImm MSAA 7 November 2016

Key Points

• Global equities surging to new all-time highs
• US$ Gold prices basing before moving up again in new upleg
• Expect US$1,400 soon then at least US$1,500/oz in 2016
• 2016 Diggers and Dealers -showcasing the Australian Gold Sector
• Emerging gold companies hitting their straps
• Gold company dividends surging NST, EVN, RSG (in gold!), RRL and now NCM again
• Favourites BLK, NST, TBR, TNR and PNR are very attractive
• PRU, RSG, RRL looking good.

The Global Boom concept seems to be picking up steam now with so many key major equity indices hitting new all-time highs in the past week.   The US has the DOW 30 Industrials, S&P500, Wilshire 5000 (broad US domestic stocks index), S&P 600 Small Caps (the Russel 2000 is lagging), NASDAQ and others breaking to new highs after massive 15-20 year bases.  India is moving, as is Germany, and the UK is surging through 6900 on the way to a blast off through 7000 which has held back this market for 18 years since 1998!  Shanghai is within a whisker of a rapid 20% gain back to 3600.  Commodities are readying to move up again led by gold. What is there not to like in the world (other than government bonds)? A highlight at the recent Diggers and Dealers 2016 was former IMF Deputy Director John Lipsky who gave a long but often entertaining commentary on the economic outlook with his `the markets are priced for a miserable time but it might not necessarily turn out that way.’  only to be grandstanded by his `there are three types of economist, those who can count and those who can’t’ comment. The markets that we follow are now strongly suggesting the outcome indeed might not just turn out that way.  Global Boom is here everyone.  I hope you are on board! The Pessimism Mania that grips Wave 2 sentiment is still strong but you will soon see that the world is moving on and now cautious investors will have to start pitching the first several trillion of cash and ex-bond funds into the markets.   Don’t be caught short here.  Keep in mind Wave 3 is the Optimism Upleg so those other trillions in cash and defensive bond holdings will just keep coming out for years yet. Gold is also acting nicely in 2016 and after the US$100 upday in late June is still in this powerful bull market.   The main driver is rising living standards in those 3300m people in China, India and ASEAN and Central Banks buying although the Fear Trade has recently boosted gold ETF holdings by about 600 tonnes this year.  The markets seem to be suggesting another rise is near that will take gold above US$1,400 and then US$1,500 before year end.  Then much higher over time. Don’t let the 24% 8 week pullback in the XGD put you off. All through the 2000-2008 bull market a 25-27% correction was typical. This corrections chart is very useful. The fabulous 2000-2008 gold sector bull market had four ~25% pull backs on the way to the final high in post GFC 2011. We just had a normal 25% correction before moving to new highs. Diggers and Dealers in 2016 was the Australian Gold Industry Show this year with some truly brilliant achievements recognised, displayed and rewarded. The Gold Industry has done very well recently. And whilst you might be just observing the share price movements with your own particular stocks jumping 100% or so this year (Austex says there were 104 stocks that rose by over 50% in July 2016 and another 40 in August  – thanks Rob Murdoch) the underlying improvements were far more important. You need to understand that the period from 2000 to 2013 was actually something of a lost decade and more for general mining in WA as the demands of local iron ore and LNG projects and LNG and coal on the East Coast crowded out gold and metalliferous mining. But you would be aware of the 750% run up in the ASX 300 Gold Index from 2000 to 2011.  Big gains here.  Before and after the GFC. But did you realise that over that same time WA gold production fell almost 50% into 2008 before recovering? The Yilgarn and the region around Kalgoorlie in particular felt it quite badly before the recovery finally took place in 2010.  The expansion from here could be even stronger if the projections from the Zuleika Shear Corridor play out and we add Blackham’s Wiluna operations and that expansion. So don’t give the credit of the recent run in gold stocks just to the A$ being weaker.  Note that the A$ rose until 2011 as gold production recovered and it was this gold production improvement that set the gold stocks moving.  Recall the Dawes Points reconstruction of the ASX 300 Gold Index that focussed on the performance of Australian domestic gold producers.  Please note the A$ will be rising again with a break over US$0.80 soon. The A$ gold price was rising strongly into 2011 as gold production recovered and has generally held above A$1500 for quite some time.   Recently A$ gold has been consolidating around A$1750 and is poised to run higher.  Even with a rising A$. So give the accolades for the success to those properly deserving it - entrepreneurs, engineers, geologists, drillers, contractors and project managers.  And yes, even the bean counters too!  All please take a bow. The recovery has come mostly from important and expanding operations in the Yilgarn at Kundana, Leonora, Kalgoorlie and Laverton The site visit to NST’s Zuleika Shear Corridor operations was truly enlightening. Thank you guys. The EKJV has found something quite special here and key Zuleika Corridor players NST and partners and EVN are all adding to resources and output. The combined output of over 380koz in FY16 showed good growth and expectations are for higher numbers in FY17. The 383koz on FY also made the Zuleika Corridor the fifth largest producer in Australia.

Australian Major Gold Mine Ranking Table (koz/pa)
June Year rate	2015	2016	Rank
Cadia	490	800	1
Boddington	750	750	2
Kalgoorlie Big Pit	750	750	3
Tanami	450	550	4
Kundana mines	335	380	5
Telfer	400	360	6

With its very high grades the Zuleika Corridor makes it a very low cost operation. NST is adding to resources at the EKJV and has just opened its own first new mine at Millenium. NST is seeking to ramp up production at EKJV and in its own operations and has identified a number of `fronts’ that should support 50-60kozpa.

Ramp up production at Kundana JV

There are five fronts to give the ELJV about 250koz in FY17 and another 9 for future years. The probabilities of the 2-3moz above the blue decline line being repeated below are quite high and should ensure some long mine life here.  The `step change’ in mineral inventory referred here is likely in 2016. The extension at Raleigh (122koz @ a very modest 42g/t) is also likely to add a few years’ ore at these high grades. Interestingly currently almost 60% of EKJV ore is lower grade development ore (NST is driving and developing in the narrow vein ore zone) so that future mined ore grades should more closely reflect the higher reserve and resource grades. I hope you are aware of the 107m @ 3.1g/t and 197m @ 2.4g/t at Paradigm.  Early days but this is an orebody.  What sort, who knows.  Keep watching here. The possible output levels described here would require an expected expansion of the Kanowna Belle mill and probably even a new mill closer to these mines. Impressive. What a goldfield! Certainly these are my own estimates but while NST has the tonnes and ounces, the cash and the manpower it is more likely than not to happen.  Let’s watch for developments. Possible Gold Output from EKJV and NST (koz)

Recent History and Possible Gold Output from EKJV and NST (koz)
	2015A	2016A	2017E	2018E	2019E	2020E	2021E
Hornet*	161*Comb	95*comb	100	100	100	100	100
Rubicon*			50	50	50	50	50
Pegasus	22	81	100	100	150	150	150
Raleigh	21	47	50	50	50	50	50
Total EKJV	206	223	300	300	350	350	350
NST 51%			153	153	179	179	179
Millenium			50	100	100	100	100
Paradigm					50	100	100
Total NST			203	253	329	379	379
Total Zuleika			350	400	500	550	550

The excellent results at Kundana are just part of the story.  RRL’s Duketon operations have some good numbers and more giving future growth.  And of course Saracen.  MetalsEx in the new form. Doray, looking good.  Dacian, hitting home runs.  Ramelius, just making money.  Oceania Gold, something special happening at Haille.  Tropicana. Well done everyone. Now Isn’t this interesting.  The simply awful ASX 300 Gold Index XGD with just 20 stocks today has reached 6% market share of the All Ords compared to >50 in the XGD in 2011.  Hmmm.  I think we are on to something here. In the gold sector we have our MPS Universe of 20 stocks (ex Newcrest) which on the data have a current PER of just 7.4x. An Aggregate Market Cap of A$18.53bn. Aggregate Gold Production in FY17 of 4843koz (+17%), after up 8.9% in FY16 and up 18% in FY15. FY16 was also a major turnaround in earnings. These 19 stocks had A$1043m in reported earnings after a A$448m sector loss. At A$1750/oz we are looking for sector earnings to double to A$2100m. That means 7.4x earnings for FY17 and 7.1x CFY18. Those poor souls who seem to think that an NPV of an underground gold mine is a fair valuation are just going to be wrong forever and as Dawes Points put it are `on the wrong side of the market’ Central Norseman Gold began mining underground in 1933 and for most of my investing lifetime had about 3 years mining reserves.  The goldfield still has mineralisation for another 20 years mining at least. The market will pay more for underground mines. So a PE ratio valuation is just fine by me. Note, too, the dividends. We have NST, EVN, RRL, RSG, OGC and now NCM paying dividends. NST has so much on its plate and making so much money it is unsure of what to do. Dividends are flowing and it has a conditional special dividend after the Plutonic sale. It won’t be able to spend it all so expect dividends to rise.  RRL has given us a 58% payout ratio.  They know the story. RSG is offering dividends in gold! Simply brilliant!  And NCM has returned to the fold with resumption of dividends. EVN is on the acquisition trail again but the jury may still be out here.  Dividends up but so is new equity in and debt. High gold prices mean the gold companies will be generating strong cashflows and so will be paying more dividends. Recall my statement about gold mining companies being safer than banks and paying higher yields. Interestingly this universe has seen a flattening median AISC costs in FY16 but more importantly there was a 4% fall in net pretax costs/oz. Dawes Points has identified another 30 companies with resources that will be developed over the next few years.  Three companies previously in Major stock universe have been move to the emerging group. Some you might know many of these but most you won’t so I will keep most of them unidentified until clients are all set with the best but you will know what the sector is doing. All projections are my own based public information but the ingenuity of Australia’s gold industry operators and a strong gold price (even in A$) give me comfort that I won’t be too far off in my projections.  After a decade of capital starvation the industry is now in favour again and development capital will be springing out from every imaginable sources (punters, institutional investors, US Europe, China, SE Asia, Japan, hedge funds streaming, gold loans -  you name it ) and of course there will be many more currently inconceivable sources.  That is just the way it works.

The Dawes Points Emerging Gold Producers Matrix

So here you have it:-

30 Emerging Stocks gold production
	FY17	FY 18	FY19
000oz	280	950	1510
PERx		1.8	1.6

My favourites are:-

PNR, TYX, CGN, BLK, AHK, AUC, CYL but there are another 23 at least to come. We are doing just fine here in Australia but it is worth looking at the main board players. The GDX gold stocks ETF is just starting to move up and has a long way to run. Only just starting and look at this one. This is a powerful bull market in gold.  Respect it and try to understand it. We should have some real fun over the next few years.  Stay the course! Barry Dawes BSc FAusIMM MSAA 7 Sept 2016 #53

Key points

• Gold heading for US$1,400 then US$1,500 then higher
• Silver following with something quite special
• Global equity markets ready to surge
• Heed the markets, not the commentators
• Bifurcation concept set in cement
• Wealth generation accelerating globally
• Dawes Points 2015 Gold Stock Portfolio up 290% in 18 months
• Buy BHP, RIO, FMG and S32
• Buy Copper, Zinc, Nickel and Tin stocks
• Paradigm Securities changing name to Martin Place Securities

What a remarkable few weeks!  Brexit vote, Australian election, ASX Gold Index up 20%, negative bond yields and the US equity market within a hair's breadth of all time highs.  Stock markets around the world ready to break out and yet still such pessimism is abounding around us. This is the 52nd edition of Dawes Points and whilst I never really imagined its publication would run so long it certainly has been a very good discipline in following the markets. It would have also been nice to have this Bumper Issue for the 50th but as we haven't seen a US$100/oz one day price surge for quite a while I thought it was worth a comment.  So we missed out on that great opportunity and I was on holiday anyway. This is also the third edition in as many weeks so there are clearly things in the market that warrant attention. I raised the Bifurcation concept a couple of months ago to highlight what I saw as mass sentiment that was railing against reality.  The real world seems so robust yet gloom has been pouring out everywhere. Two paths lie ahead, one very positive the other just gloom. The positive entrepreneurial spirit as personified by Australia's gold industry is indeed robust and in other places really positive advances in technology worldwide are leading Main Street Planet Earth to greater things. This is in stark contrast to the other road where the politico-banking cabal is parasitically entwined in the bulk of the US$100trillion tied up in the bond markets. The entrepreneurs just want to grow the pie and create things. The cabal just want to suck out the juices through taxes, fees, salaries, grants, consultants, personal empires, pensions, propaganda, bribes and welfare transfers.  Were there really >1,000 Eurocrats/politicos that were better paid than UK PM David Cameron and did they pay any income tax, anywhere? Trillions of dollars each year milked from tax payers.  The Robber Barons never had it this good! The facts as shown by the performance of the markets and the fundamental drivers of supply and demand have been very much at odds with so much of the market commentary. How could the UK Brexit voting to leave the EU cause so much bearish wringing of hands and gnashing of teeth?   Euro-sclerosis has been with us for decades and the +50% share of GDP of European countries taken over by government bureaucracies that in turn has provided 25-55% chronic youth unemployment is not the way forward.  New model needed there.  The Soviet Union finally collapsed after about eight decades of misallocation of capital and Euro-Bureaucracy has taken about five decades to begin to unwind. But back to the markets.  Those calling for the end of the world from Brexit (same people, different issue this time) were clearly not watching the markets. The Dawes Points last month highlighting strong equity markets and rising gold were well before Brexit result.

Gold is very important in the future world.

Brexit brought out some gold bulls but gold had already had a nice little run on essentially Asian demand. I consider strongly that the long term gold price trend is up.  The trend will be long lived and great in magnitude and amplitude. Thirty Five Years of Gold History – and it does look a strong +20 years future. The demand is Asian driven as incomes and wealth expand for 3,300m people and with most of the freely available gold now already having been vacuumed out of the West into these strong hands in holdings as jewellery, bars and coin. New gold exchanges in Dubai and Shanghai will also finally bring true price discovery to the true markets and gold prices will just stay firm for many years to come.   And of course rise. Gold demand from late comers in the West will have to fight with higher prices to get any of the dissipated gold back. Gold will become the standard for value. Clients are long gold stocks holders and I hope very happy. Still so much more upside to come. The 2015 Portfolio is up an extraordinary 290% and 2016 up over 135%.  Individual stocks have done even better.  There is excellent potential for further upside in all the major stocks but some sector rotation may be appropriate into emerging gold producers like BLK, CYL, TYX, PNR, SWJ, AUC and AHK. Very pleased to see BLK exceeding my A$0.90 price given in Feb 2015 when the stock was just A$0.09 and it is close to the A$300m market cap (about A$1.18 now) 18 month target for start of production this Sept Qtr.  Of course the market has changed and as has the company, and as has my next 18 month target of A$2.50. At today's gold price of A$1800/oz BLK is still only 3x cashflow and its resources keep growing.  The 58km of strike on the Wiluna Structure is similar to the Zuleika Shear at Kundana so BLK will be busy exploring in very fertile ground for decades yet.  Of course I own BLK. I have lots more opportunities here yet. North American gold stocks are also performing well and the rise in 2016 is brilliant. I have had a bit more to say on gold in this CNBC interview.

Silver

Silver is similar to gold in being a precious metal but it has a larger use as an industrial commodity.  Demand has been exceeding supply over recent years and inventories have been run down to very low levels. Silver looks as good as gold in the long term although silver is a long way below its highs of US$50. However, silver is making a comeback against gold and has strongly outperformed gold over the past few months.  The Gold:Silver Ratio is still not far from the Upper Range but it has broken an important uptrend so silver should do better than gold for a year or so. S32.ASX (market cap A$10bn) produces around 20mozpa of silver so it will be winner although it is only a modest A$500mpa revenue earner but US$10 change is A$250m pretax.

Global stocks outlook.

Typically I don't cover the day to day economic issues and really can't see the point of commenting on general economic stats in this letter but the latest US payroll figures released last Friday are very encouraging and come just as the US equity market is pressuring resistance at all time highs. Important messages are becoming even clearer. Particularly the Bifurcation concept. S&P pushing hard against alltime highs and is still oversold.  No Irrational Exuberance here! And NASDAQ looks wonderful.  Technology is the world's leader.  And still oversold.

Bifurcation.

And the other side of this is, of course, the Bond Market.  How can 2.2%pa for 30 years compensate you for capital risk when inflationary pressures appear to be building?  And after just looking at the quality of the management teams of any persuasion in the entire political sphere, would you lend money to any of them. And European bonds have negative yield so you can pay the government to take your money and then lose it for you. And have you ever seen a Prospectus or PDS from a government for a bond? Any Directors' liability issues?  Disclosures?  Failing to meet Prospectus Forecasts on deficits? When it all goes belly up, and many governments will (– mostly through debasement of the currency), will there be SEC or ASIC inquiries?  Could it be that the judiciary could be part of the cabal and let the perpetrators off scott free? Safe Haven.  Flight to Safety. Lambs to the Slaughter is more like it. The US 10 Year Treasury Note peaked in 2102 and the price today is just a few percent above the levels achieved in the GFC and the S&P 500 is probably up >200% since the time of those 2008 T Note highs. You might have made 3%pa Buy and Hold.  No significant gain for that `Safe Haven'.

Bifurcation.

I have been talking about the great Global Economic Boom and Prosperity now for quite some time but from the wrong side of the market.  Most thought I was just far too optimistic but the evidence for such an outcome has remained very clear and quite compelling to those who have sought it out and ignored the continual avalanches of pessimism. Yes, bond markets were still rising (falling yields) and commodities and gold falling.   China and its equity markets were collapsing, the European Banking System was kaput and the US was still in the Greater Depression. Just about every economist was preaching gloom and/or doom. The A$ had to fall further and the iron ore price was down for a generation. There was no way out. Build up cash.  And so everyone did.  Trillions everywhere. But what really has happened? Let's look at the US. The trillions in QE rolled out by Bernanke went to rebuild bank balance sheets with next to nothing making its way into the general market place. Despite the strangling it is useful to note that property prices in the US have still been rising and housing starts have steadily moved higher.  But 1.164m units pa is still well down on long term new and replacement requirements of about 1.5m units pa and the area under the curve is about 6 million of pent up potential demand. As an aside, if you have cable TV it is well worth watching the quirky NY real estate reality show.  The commentary is almost current but the issues raised there and the way that market works suggest the US property has a long way to go in its own bull market. Housing company stocks are testing 2007 pre-GFC level highs.  The markets seem to like this sector too and it looks as if it might be breaking out to much higher levels. Fed interest rate rises won't hurt at all and should actually stimulate lending volumes especially at current low mortgage rates. With all the bad news on everything out there one would expect that the most negative action should be falling on the banks as the weakest links.  But the market doesn't think so. So the US seems to be doing just fine and I think we will see some real strength there as short covering takes place and new money from all the cash on the sidelines comes surging in.

China.

I am on my way there again as I write this. `If you haven't been to China in the past six months you haven't been to China'. Interesting observation and I think it is probably appropriate. If you are bearish on China, which part, and, when do you wish to have been bearish and for how long? 1400m people and many regional economies makes generalisations difficult. GDP growth is slowing marginally but that is purely a matter of arithmetic as actual GDP additions are from ever higher economic bases. Personal disposable income is still rising strongly.  Infrastructure spending is up again. Property is booming tech-heavy Shenzhen and elsewhere. The Shanghai Stock Market is holding up very positively.  No collapse here.  What was the issue again? The long heralded collapse in steel production simply hasn't happened either.  Talk of it however, resulted in the steel production decline into Spring Festival 2016 which also ran down inventories of product and raw materials.  Inventories of wire rod, rebar, hot rolled coil, cold rolled coil and medium plater steel were almost 30% lower than a year ago.  With a flurry of new infrastructure projects in 2016 brought forward as well, the steel mills were caught really short of steel product and production is back at near record levels. Domestic iron ore production (all magnetite concentrates) has fallen sharply so imported iron ore is in high demand and are still at record levels. Iron ore prices are recovering and started with the typical short cover rally that no one believed and is now rising again. RIO has shelved its US$20bn Simandou African iron ore project and about 250mtpa of iron ore capacity has been taken off the market so iron ore supply just might get a little tighter next year. I expect US$80 within 12 months and perhaps by year end.  I won't dwell on it but the chart below looks awfully like the completion of a Wave 2 with a 5 wave C just finishing.  If you know what that means. But that would be impossible, wouldn't it.  Wouldn't it? Interestingly I am seeing good references to demand for imported magnetite to replace the 150mtpa or so of very high domestic magnetite concentrate production shut down in China over the past couple of years.   Several groups are looking at magnetite projects to get up to meet this demand. Don't dismiss this. Keep watching.   I like magnetite. As noted a month or so ago BHP, RIO and FMG are strong Buys.  These next three graphics are in US$. BHP  Copper, Coking Coal and Iron Ore are OK.  Petroleum could come good as well. Stock is cheap.  RIO  Now in the best shape of the past two decades.  Iron ore, Aluminium and Copper.  FMG   Brilliant performance in reducing costs and debt.  And looking at Magnetite. I like magnetite and clients have done very well out of Magnetite Mines Ltd (MGT.ASX) and expect to do extremely well through this rising resources market.  Billions of tonnes of softer low strip-ratio magnetite ore and magnetic separation giving very low mining and production costs.  And super low cost slurry pipelining to make it even more competitive.  I own MGT. Magnetite Mines Ltd  MGT.ASX Magnetite (Fe3O4) concentrates are a mining product, not an ore, so have higher Fe content (68-72%), fewer impurities, are exothermic in steel making and command a premium of 7-12%/dry metric tonne unit over 62% Fe hematite (Fe2O3) and 18-20% per dry tonne of ore. Unlike hematite ore deposits which are steadily falling in grade for the major producers globally, magnetite deposits feed a concentrator that gives a long term steady grade magnetite concentrate product. Something also seems to be happening in the seaborne freight market which has been significantly distorted by significant new capacity at a time of trade volume reduction. Next year could see some rises in sea freight that would reflect higher trade volumes. China steel production and demand strength also applies to industrial metals.  The long term decline in LME inventories of almost all metals suggests that consumption is still robust. Copper, lead, zinc and tin look tight.  Aluminium and nickel have shown significant inventory rundowns leading into 2016 and prices are looking to go much higher. Copper is the leader.   Oversold long term, running into a deficit over the next two years and no stocks. So the general Resource Sector looks very good and share of ASX All Ords turnover is rising nicely and is up 40% from the lows at the beginning of the year. And the Small Resources Index is surging, bringing liquidity, market breadth and participation.  Turnover share is up almost 150%!  Great fortunes are going to be made here.  Make sure you participate!! When we look at Europe and Brexit, the impact on the equity markets has been minimal although the flight to bonds has been strong.  Look at these graphics. London FTSE  Massive ascending triangle with long term resistance at just under 7000.  Just 5-6% away and the market is oversold. Germany DAX  Has already broken out from that 2000- 2008 resistance level and is oversold.  Strong uptrend is OK. The currency impact of Brexit is also interesting. The A$ is rising against Europe. Against the British Pound it seems we are well on the way to higher levels for the A$. And against the Euro it looks very good indeed. So the US looks very exciting, China is booming, UK and Germany are doing just fine and Asia is also booming.  SE Asia is too and I have been there recently. Japan – Whatever the reasons –the Nikkei looks good. India is moving up again after the recent new government and a 12 month correction. Singapore is just extraordinary and the stock market is ready to go.  Lots of pessimism there buts loads of cash! These is so much more to add to the bullish case but the markets are now doing the talking! Get on board. Gold is the key.  Resources stocks generally are brilliant and technology is the way forward. Join the path less well followed and enjoy the ride. Call me, email me.  Get more money into the markets! bdawes@mpsecurities.com.au  +61 2 9222 9111 Oh, yes.  I am going back to MPS. Martin Place Securities.  More prominent and less confusing.  But you know it is me anyway. Barry Dawes  BSc FAusIMM MSAA #52