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UPDATE - GRIT battles tough environment for mining juniors

UPDATE - GRIT battles tough environment for mining juniors

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Global Resources Investment Trust’s (LON:GRIT) performance was affected by the tough environment for junior miners though gold’s resilience provided a lift.

The gold price has risen by about 10% so far this year, with six of GRIT’s top ten holdings gold plays. 

West Africa-based Merrex Gold, for instance, saw its price increase by more than 80% in May and now accounts for 2.9% of the portfolio . 

Otherwise, GRIT said investor interest in the natural resource sector remained subdued with many of its portfolio also affected by very wide bid/offer spreads that have exacerbated volatility and restricted liquidity.  

Net assets at the end of May were £27.4mln (£39.5mln at 7 March when it listed), which on a per share basis equated to a 30.6% reduction to 69.4p.

The largest holding is Canada-listed coal group Arakan Resources at 18.5%, with Anglo African (bauxite) at 9.6%, Tirex (copper) 8% and Siberian Goldfields at 6.9% also significant.

By resource, gold is 40% of the portfolio, coal is 24% and copper 11%. 

David Hutchins, GRIT’s fund manager, told Proactive Investors that after a very tough three years for the mining juniors there are signs a bottom may be close.

“My gut feel is that we are somewhere at or near bottom and in two or three years we might well say that this was it.

“We have seen a little change in sentiment change recently.

“Last year, if a small cap announced good news liquidity increased but the price didn’t move. It was just an opportunity for people to get out.

“More recently, in the last couple of months, good results or exploration news has seen both the share price and volumes going up, which is pretty significant and may be a bit of a turning point.” 

View full GRIT profile View Profile


December 05 2014

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