Bouyancy predicted for Precious Metals

Ambrian Capital, the independent investment banking group, has launched Golden Prospect Precious Metals (GPPM), a Guernsey registered (UK), closed-ended investment fund dedicated to equity investments in the precious metals sector. The fund commenced trading on the Alternative Investment Market of the London Stock Exchange on November 28.

GPPM, the first dedicated precious metals fund to be listed in London, is managed by Ambrian Asset Management and is aiming to exploit the attractive investment opportunities arising from the strong fundamentals of the precious metals sector.

In support of the Precious Metals Fund, Ambrian Capital transferred in some £9.4 million of its existing precious metals equity investment portfolio in return for the equivalent investment of ordinary shares and warrants in this new investment vehicle. The portfolio transferred, which represents a substantial transaction under rule 12 of the AIM Rules, comprised the following nine shareholdings:

Company                                            Number of Shares

Bolnisi Gold                                                 1,000,000

Centamin Egypt                                           5,000,000

Coeur D’Alene Minerals                                   250,000

Great Panther Resources                              1,250,000

Jubilee Platinum                                           2,000,000

Lihir Gold                                                        500,000

Mano River Resources                                 13,900,000

Resolute Mining                                            1,200,000

Uruguay Mineral Exploration                             600,000

Tom Gaffney, Chief Executive of Ambrian Capital, said, “The launch provides a platform for the development of Ambrian Capital’s investment management business. The fund will benefit from the precious metals investment expertise that Ambrian Capital, formerly Golden Prospect, has built up over many years. In addition, GPPM will be able to take advantage of the low tax regime in Guernsey.

“With the anticipated launch of further funds next year, Ambrian Asset Management becomes the third operating business of the group, alongside Ambrian Partners and Ambrian Commodities.”

GPPM will focus on equity investments in the gold, silver, platinum, palladium and diamond sectors. The directors believe that above average returns will be generated through the capital appreciation of a selective portfolio of investments in these sectors. The funds will be concentrated in listed companies that have projects in either the development or production phases. As well as investing in these markets, the company can also diversify up to 20% of its gross assets into investments in other key commodities, such as uranium. Stocks will be selected on fundamental factors and wider economic considerations including geopolitical risks.

The precious metals sector has experienced a trend of rising market prices since 2001 which has been largely driven by classic supply and demand economics. There have been few recent discoveries of new precious metal resources and those that have been found will typically take many years to bring into production. The directors believe that the current upward price trend in the precious metals sector could continue for a number of years making this an opportune time to launch a precious metals fund focusing on these target commodities.