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Miners outperform AIM index
Source: Reuters
Publication: reuters.co.uk
25 November 2005
LONDON (Reuters) - An index of mining companies listed on the Alternative Investment Market rose 26 percent in the third quarter of 2005, accountants Ernst & Young said on Friday.
Gains by Ernst & Young's Mining EYe index, which tracks mining companies on AIM, far outstripped AIM's overall index increase of nine percent.
"(This is) largely due to gold and copper prices...which have reached new record highs in the last few weeks, suggesting that there is more to come from the sector," the firm said in a statement. Three-month copper hit a record $4,243 a tonne on the London Metal Exchange last week, while spot gold touched an 18-year peak of $495.35 a troy ounce on Tuesday.
There were 16 new additions to the Mining EYe index in the third quarter, which raised a record 161.7 million pounds sterling in capital. An additional 54.9 million pounds was raised by existing AIM mining companies.
"Mining is now the second largest sector on AIM, accounting for 16 percent of AIM's 50 billion pounds market capitalisation - dominated by copper and gold producers," Michael Lynch-Bell, head of mining and metals at Ernst & Young, said.
"Investor appetite for natural resources is strong as commodity prices drive increased value in the sector.
"The mining and metals sector is also benefiting from lots of goodwill, but exploration success is key if this is to be maintained as we go into 2006."