Small Talk: Gold miners on AIM may be missing out on valuations

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The Independent Online

We have been banging on about gold for some time. There are a plethora of gold-miners in various stages of evolution on the Alternative Investment Market (Aim) and almost all have had a boost as the gold price has vaulted to more than $1,000 an ounce in recent months.

But even those that have seen share prices jump considerably may be missing out by virtue of being listed on Aim in the first place.

A note published last week by Edison Investment Research argued that while some of these companies might be sitting back and basking in the growth they have seen in the past 12 months or so, they would actually be better off if they abandoned Aim and moved to another exchange overseas.

"Based purely on the balance of their resources currently, we estimate that up to 57 companies could enhance their valuations (excluding costs) by either migrating from one exchange to another or considering a dual listing," said Edison's analyst Charles Gibson. "Any decision by a company on which market to list in should therefore be taken within the context of the categories into which its resources fall."

Mr Gibson argued that the average price of yet to be mined gold was actually $159 per ounce, up sharply with the historic global benchmark valuation of $35 per ounce. This is partly because the costs of discovering gold are so much lower than they used to be: it is now thought to be about $9 an ounce against an historic $35 an ounce.

Mr Gibson points out that Aim-listed companies such as Highland Gold, Vatukoula, Avocet, China Goldmines and Metals Exploration, could see a "potentially experience a re-rating if they were to migrate to other exchanges". There are wide variations of valuations in different categories for the different exchanges. Australia, for example, ascribes the highest value to inferred resources and measured ounces and therefore offers investors the greatest uplift in value upon listing, Mr Gibson points out.

Malaysian group seeks £40m to build data centre

Teliti International

While not especially sexy, data centres are becoming an increasingly important part of business. With everything now digital, online and networked, companies need increasingly large amounts of data to be stored. And where there's a job to be done, there is an outsourcing group to do it.

Teliti International is a Malaysia-based IT group planning to list on Aim to raise up to £40m for a data centre in Malaysia that is expected to cover 120,000 sq ft, becoming one of the biggest in the region. As well as data centres, the group offers IT services, employing 30 or so technicians.

The company already claims to have plenty of backers from Malaysia, especially among Islamic funds, but is hoping to attract as much as 90 per cent of the new money from investors in London.

"The net proceeds from the fundraising will be used primarily for general working capital purposes and to build and develop a data centre, 60 per cent or net proceeds to go towards building the data centre and 40 per cent on expanding sales and marketing around the region and in the Middle East," the group said in a statement.

From flights to camera and action for easyJet's Sir Colin

Future Films

One of the main beneficiaries of the new-found confidence on Aim, and the clutch of companies looking afresh at the exchange as somewhere to list, is a bevy of former public company executives, who are being hired left, right and centre.

The latest is the former easyJet chairman Sir Colin Chandler, who has just been appointed as the chairman of Future Film, a finance and production house for independent movie makers.

Sir Colin, whose CV is stacked full of public companies, including Vickers, Smiths Group and Racal Electronics, said: "I look forward to joining Stephen [Margolis, the chief executive of Future Films ] and the team at Future Films at this exciting stage of the company's development.

"The multi-faceted nature of the Future Films business provides investors with an opportunity to benefit from structured film financing without the box-office risks associated with direct investment in films or production companies.

"This, together with the well-recognised post-production business, will drive the company's future growth, limit downside risks and ensure that Future Films enjoys a bright future."

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