Gamble of the week: a zinc-rich miner

This zinc-rich miner may be a gamble, but investors could stand to make four times their money, according to broker Seymour Pierce.

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Shares in this company may "have risen strongly in the past few weeks", says Investors Chronicle, but the best is yet to come.

On the basis of the present value of future earnings streams, broker Seymour Pierce suggests that the shares could be worth 16.7p per share over four times their current price.

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At the time the study was done, the zinc price was $1,815 per tonne. It's now more than $2,000 and, with the global supply-demand balance still tight, Macquarie (for one) expects the metal to average $2,589 per tonne in 2006.

This is all good news for Aim. Production is expected to start in mid-2007 after an investment of about $72.5m in plant and machinery, financing for which is said to be "well advanced".

Annunziata Rees-Mogg
Annunziata Rees-Mogg

Annunziata was a deputy editor at MoneyWeek, covering financial markets, politics, economics and comment pieces. She then went on to the Daily Telegraph as a lead writer where she wrote a column on young women’s financial issues. She was briefly a member of the European Parliament for the East Midlands region in the UK as part of the Conservative Party.  Annunziata continues to write  as a freelance journalist.

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