No promises @crom, happy to share my 2 cents whenever relevant but I don't really post much these days. Certainly not on a sleep easy cornerstone like EVN.
It is worth repeating that I believe, the time to go hard on mining was 2014-15. That was a clear cyclical low in commodities on the macro, which I did participate hand over fist thankfully. Coincidentally this is also the time when JK, BB, AF, RF and a few others cemented their positions in ASX mining by buying cheap assets from the Majors or in SARs and FMGs case a revive/build of unwanted assets. Post #:57667023 Coincidence maybe, but these guys are the best in the mining business and they do understand how cyclical mining is and knows better than most of the headwinds/tailwind coming in the next few years.
At this point with longer term higher inflation looming, I believe miners (gold miners specially) will benefit but the main benefit will be in financials or any businesses that can pass on inflationary pressures to customers. Banks can do this easily in fact they are already raising rates on their fixed products. I also believe that financials like PTM and MFG that is counter cyclical on their mandates will benefit. They have under performed in the heavy accretion of the last couple of years but I believe their contrarian stance will shine in the face of higher inflation. Which will take some of the froth from the market... Plenty out there for those that looks but we are headed into different waters in the next 7-10 years and best to get a foot in the door now.
So how does this affect EVN specifically. Well I think JK realises that we are approaching the zenith of the current commodities cycle as he has been willing to let the poorer assets go. Something a good miner should do well before the cyclical nadir. Stuck with poor assets like Newmont, Barrick and Glencore did in the last cyclical low and forced into a firesale is not a good position to be in. Not that Cracow and Mt Carlton are bad assets either but compared to the ones JK has access to and have been acquiring...those two are no contest. JK have been doing the right things by selling the lower margin assets and acquiring assets with higher margins in preparation for the cyclical nadir in commodities. For that I happy to remain invested in EVN throughout the commodities cycle.
PS. Just to add to what I'm saying above, which is a clear sign that we are close to the top of this commodities cycle, check out the over investment in explorers right now and the number of little miners in the ASX. Not quite a bubble yet but It is starting to enter frothy territory.
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