Mining minnows deliver big returns

Mining minnows deliver big returns

AUSTRALIA’S mining minnows have defied the volatility of recent months to finish the financial year well ahead of their big brothers.

The Intersuisse Resources Index, which tracks 162 mining stocks with market capitalisations of between $20 million and $500 million, rose 61 per cent in the year to June 30.

The index of small miners outpaced the All Ordinaries by more than 40 per cent and surged ahead of the ASX200 Resources Index, which recorded a rise of 50 per cent over the year.

Uranium explorers were the market darlings of 2005-06, but it was a group of quiet achieving, would-be producers that made the biggest gains of the year.

Coal bed methane developer European Gas, formerly Kimberley Oil, rose 713 per cent after shifting its focus to the European market.

The company has sold or joint ventured its exploration permits in Western Australia in favour of projects in France and Italy and investors jumped on the bandwagon.

Platinum Australia was another big mover, experiencing a 556 per cent gain off the back of soaring platinum prices. The company has projects in South Africa.

Taking the bronze medal for share price improvement was iron ore junior Gindalbie Metals, with a 537 per cent rise. Gindalbie recently won Chinese backing for its iron ore project near Geraldton.

Intersuisse analyst David McGlashan said the small resources index had risen as much as 99 per cent before May’s commodity price dip.

He said modernisation of China, India, Brazil and the former Eastern Bloc countries would continue to fuel demand for commodities.

The worst performer on the Intersuisse index was Bluestone Tin. It lost 69 per cent of its value after suspending mining at its Renison project in Tasmania.

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