The London Stock Exchange; Turning the Spotlight on Stock in Precious Metal Companies

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Precious metals in themselves are a huge investment favorite among investors in both the UK and the US; likewise, so are stocks and shares in the companies that produce these treasured metals. These companies largely consist of gold mining and processing businesses such as Serabi Gold Plc. (LSE:SRB), steel rolling outfits, diamond developing establishments such as Firestone Diamonds Plc. (LSE:FDI), and so forth.

Other metals drawing in high levels of attention on the London Stock Exchange include tin, copper, nickel, zinc, lead, and silver. Ordinarily,the metals themselves are not generally traded on the stock exchange; rather they are traded on the London Metal Exchange. They can however be traded on the stock exchange under innovative tradable assets referred to as Exchange Traded Funds (ETFs).

In a move that effectively served to further bridge the gap between the stock exchange market and the industrial metals market, ETF Securities Limited was the first to launch physically-backed industrial metal Exchange Traded Commodities (ETCs). These products afford stock investors and traders ready and easy access to industrial metals through traded securities.

So, is it profitable or advisable to invest in precious metal producing and refining companies? Well, stocks in the precious and industrial metal sector appear to be doing quite well. Stellar Diamonds Plc. (LSE:STEL) for instance, equally an AIM-listed company, recently saw its shares rise by an impressive 8.3% to 3.25 pence per share. While Angel Mining (LSE:ANGM) shares have been known to consistently sport remarkable upward trends. Stellar Diamonds Plc. is a diamond exploration and development company with projects in Sierra Leone and Guinea. Angel Mining, on the other hand, has its operational focus in Greenland. The company mines precious and semi-precious metals including gold, silver, zinc, and lead; it also plans to expand its production base to include coal and some other minerals.

Nevertheless, things are not looking so good for a number of precious metal companies such as Polymetal International Plc. (LSE:POLY), which was ordered by the Russian Supreme Arbitration Court to pay US$27 million in additional tax for alleged tax defaults. The company, though the fourth largest producer of gold in Russia, as well as the eight largest producer of silver in the world, has found itself on the receiving end of sizable hits to its share and stock valuation owing to this tax penalty.

On the whole, it would seem the diamond niche of the precious metal stock industry is doing particularly well as can be seen with the aforementioned Stellar Diamonds Plc. Likewise, the gold sector is doing well as well; one company worthy of note in this regard is Serabi Gold Plc. which is listed on both the London Stock Exchange and AIM.

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Comments

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