Additional Information
Market: AIM
Sector: General Mining
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London Mining

London Mining Plc is a UK-based company that is developing mines for the steel industry. It has 100% of the Marampa hematite iron ore mine in Sierra Leone, 100% of the Isua magnetite iron ore project in Greenland, a 50% stake in on the Wadi Sawawin joint venture in Saudi Arabia, a 50% stake in the China Global Mining Resources joint venture and a 100% stake of an coking coal development project in Colombia. The Company listed on the Oslo Stock Exchange on 9th October 2007 and on London AIM on 6 November 2009.

London Mining, Petropavlovsk offer "standalone and self-funded" potential, suggests JPM

31st Jan 2013, 11:38 am
Companies with resilient earnings and improving balance sheets represent the best bets, suggests the broker. Companies with resilient earnings and improving balance sheets represent the best bets, suggests the broker.
This year’s small cap mining winners will be those best able to demonstrate standalone value and self-funded growth, says JP Morgan, with London Mining, Petropavlovsk and Gem Diamonds its top picks.

The broker said small to mid-cap miners underperformed the large mining groups during the last 12 months due to weaker operational performances and widespread funding concerns. 

In 2013, JPM said it prefers those miners that have passed beyond peak funding risk and are poised to deliver value on this “standalone and self-funded” basis, especially as it sees little predatory activity from the majors.

Companies with resilient earnings and improving balance sheets represent the best bets, suggests the broker, and on that basis London Mining (LON:LOND) and Petropavlosk (LON:POG) are “clear candidates for a de-leveraging-driven equity re-rating in 2013.”

In 2013 JPM expects a maiden profit for London Mining of $0.48/shr and 41% year-on-year EPS growth for Petropavlovsk, with both driven by significant volume growth. 

Gem Diamonds (LON:GEMD), meanwhile, has high exposure to improving macro and consumer sentiment, yet its shares are only up 2% in the last two months, adds JPM.

With US$79mln net cash and trading at a 16% discount to our NPV, GEMD’s investment case is undemanding, says the broker.

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