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Attractive odds

RECENT listings by local companies on the London Stock Exchange’s Alternative Investment Market have highlighted the attraction of this market for smaller local companies with overseas foundation projects.

The similarities of the companies and their listings stop there, however.

New Millennium Resources, which has not listed anywhere else, completed a compliance admission late last month, while Dwyka Diamonds, which listed on the ASX 12 months ago, raised $A9.7 million in its AIM listing.

Perth-registered Centamin Egypt Limited has made a UK placement worth $A7.5 million prior to a planned AIM listing this week.

New Millennium, which prior to its listing raised $A3.4 million through a rights issue to 250 shareholders, is looking to produce the world’s highest grade niobium from a Greenland deposit, while Dwyka is hoping to produce alluvial diamonds from up to six South African sites.

Centamin aims to produce gold and base metals from the Eastern Desert in Egypt, but while gold prices are improving, the industry is undergoing significant worldwide rationalisation and base metals markets have been languishing.

New Millennium’s outlook appears less mixed. The market for niobium, a rare metal, is growing, but there are only three niobium mines – two in Brazil and one in Canada – and these two nations hold a combined 90 per cent of the market.

New Millennium expects to target the higher end of the market, supplying niobium for use in super-alloys and superconductors.

Company secretary John Greeve said New Millennium was talking off-take agreements, aiming to commence production from a boutique mine in 2003.

Dwyka and the diamond picture are somewhat different. Market interest has waned and prices are down, but companies are still chasing new deposits in Australia, Africa, India and Russia.

Dwyka already has two operating diamond mines and a regular market with De Beers, generates significant cash flow from converting sand and gravel from its operations into cement building products and believes it can make the most of any market conditions.

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