Minmet - A Love-Hate Relationship

Minmet is one of those companies that so many investors love or hate – or love to hate!
Let’s face it, what private investor doesn’t get a kick out of owning part of a goldmine? And it is this, combined with the remarkable PR abilities of its Chairman, Jeremy Metcalfe, that will make Minmet’s share price shine again (quite apart from the abilities and persistence of this small company in successfully finding important mineral resources in places that have long been ignored or overlooked by larger mining/exploration companies).

Minmet’s rise to a share price of just under 50p during the year was mostly on “hype” and excitement – not on either true value nor on prospective value. Certainly, they may be worth this amount in the future IF any/all of their mining prospects turn out to have even a small part of the potential they promise. But that may be years away, although possible events such as the granting of the long-awaited licence to start mining in Portugal (negotiations are STILL underway, but the Portuguese government seems unwilling to move) could produce sudden and dramatic results.

But the share price of companies like Minmet rarely moves on asset value or established business alone. This is NOT like one of the “blue chip” companies where the major share price factor is the buying/selling of the institutions. Minmet’s price moves (mainly) on the company’s popularity (or lack of it) with the private investors. And private investors have seen so many of their “overvalued” investments lose money in the last year, that they are now very nervous. Once a little confidence returns, the small investors find some money again, new investors look to start buying shares – particularly in the near future while some companies have lost so much of their former share price that they do appear to be undervalued – then Minmet will rise substantially. Fortunately for “traders”, Minmet will always have its “de-rampers” as well as the “rampers”. Over the last year it has proved to be a marvellous opportunity for those who buy and sell the shares on the ups and downs – and it will be again.

Long term? I think a small shareholding in Minmet is a good move – it MIGHT do extremely well, but remains a gamble. A bit like spending a few pounds each week on a lottery ticket. Short term? Great for buying and selling, if you can get the timing right.

Me? Well, I’ve bought and sold various quantities of Minmet shares over the last two years. I’ve made a substantial amount of money – in the last year it proved to be my best moneymaker although I did lose a small amount on its last fall which took me by surprise even though I did manage to sell well before the bottom. I’ve recently bought back in, at a little more than the current price and unfortunately I now think it may fall a little more before it rises again.

Not the only good gamble for 2001, I think, but it’s one I’m going to enjoy watching.