Open question to all...
I am looking at putting some money into either the oil or mining sectors as I do not have any coverage in either currently. Any favourites out there? Obviously I intend to research this myself as well but I would appreciate any ideas and don't worry I wont take any ideas as 'recommendations!'so you're safe!! (Laugh) - I would be looking for a dividend return and listing on a main FTSE index, be that 100, 250, smallcap or fledgling rather than Aim or Ofex etc.

Hi StockBunny, have a look at BEMA Gold Corporation EPIC BAU, floated on the AIM a few weeks ago at 1.60 dropped to 1.45 but now around 1.73, check the RNS out regards better then expected drilling results in Russia.

As ever be LUCKY

Regards Vintage57.

Stockbunny,

Sadly most of the miners and explorers are in fact on the AIM!

And I doubt whether many of them pay dividends either!

I think your requirements really don't match up with many resource companies, and you may be better off looking in another sector altogether, IMHO.

Most junior resource companies are on AIM because they are either looking for resources, or have found them, but aren't really mining them in enough quantity to justify a higher listing.

AIM has some tax advantages though, for stocks held over 1, or 2 years, reducing CGT to 10% after two years.

Main listtng stocks can be traded from an ISA though, which has it's advantages too, depends on your personal circumstances really.


Should you decide to look on the AIM, I have a few suggestions.

For gold, Avocet mining and Oxus Gold have reasonable prospects, IMHO.

For platinum, Aquarius Platinum may be a decent prospect.

For gas, JKX seem to be doing quite well, Regal Petroleum and Sterling Energy may well be worth checking out.

I personally prefer growth to dividends, so mining small caps work for me, but may not be everyone's cup of tea.

Good luck,

Andy.

Vintage 57 and Andy - many thanks for your thoughts. I have a unit trust that focuses solely on AIM companies and tend to keep my exposure on that market to that source only - Yes I lack bottle!!! So neither of you favour the BP's, Shell's Rio Tinto's and Xstrata's? That's interesting, are they too big and cumbersome? I did eye up a company at one time (((Name escapes me...)) KENMORE!!! That's the one - although they are looking to mine a different resource I know. Any thoughts on them?

Sorry Stockbunny don't know anything about KENMORE, I like andy go for growth rather then dividend, Ive got 10-15 years before i will start looking at income (hopefully). With BP going into Russia and a few major player's following a company called SIBRE ENERGY EPIC SBE should be of interest purley on growth and in time a possible takeover play (Andy your thought's are most welcome).

Regards Vintage57

Thanks V57 - yes can fully understand yours and Andy's strategy on these stocks and feel your approach is likely to be the best one to adopt if possible. I'll have a look Sibre and a couple of others. You two be lucky and thanks again

Stockbunny - you could take a look at Golden Prospect (GOL on AIM though)
- it holds shares in mining companies across the world (inc Australia) and they updated the market yesterday about their progress.

I bought in at 20p, and am currently in discussions with my Investment Club
to do the same!

pthwaite - thanks for the idea - will look into it! Good Luck to all!

The problem with the big miners is that they have to replace their reserves every year to maintain their share price. Over the years, there has been a growing trend to buy out small E&P companies rather than looking too hard yourself. Therefore, much of the big gains comes from small cap explorers who strike it rich. However, there's considerable risk there as these companies usually have to keep tapping the market for cash as mines/wells aren't cheap to develop. There's also the problem of them finding nothing (Minmet, Caspian etc).

For oil plays, Russia will become the big supplier over the next 10 years and well worth a look. Both BP and Shell have big programs but my personal favourite is Sibir Energy (recommended by Vintage57 above). Has a large field that they are developing with Shell and expect to be earning revenues of 150m by the end of '05. There is still the obvious political risk in Russia and I don't believe that we will have heard the end of it. You could also look at Lukoil.

Paladin Resources is a safer oil play. They tend to concentrate on buying small fields from the big producers (mainly North Sea) and running these. They pay a small divi and have been steadily expanding. Fantastic management team.

Gas plays are a little harder to find as they tend to come together with oil companies but if you want to look outside the UK, try Admiral Bay (ADB) listed on the Canadian exchange. They have potentially a massive gas deposit which they could sell into the US market. The US market is only going one way price wise as there is not enough gas to supply the ever increasing demand. It's very risky but if it comes off, you could easily take the share price and mulitply by 5.

I believe gold is entering a new bull market (along with other commodities) and small miners/explorers offer good upside. I currently have shares in Celtic Resources who have had some serious ups and downs but now appear to be able to begin mining the massive Nezdaniskoye mine in Eastern Siberia. There is still massive potential here, not least a take over.

Otherwise, putting money into Merryl Lynch Gold and General Fund has seen my 'fund' section of my portfolio increase 20% this year.

Platinum is harder to call as it's long term price depends upon whether cheaper metals can be found for catalytic converters. For a risky play try Southern Era.

You might also want to consider Silver as an investment. Hasn't really taken off as gold has yet but with supply outstripping demand and world reserves almost gone, the price should rise. I don't think I need to add that Mr Buffet has been buying over the last few years to make you understand the potential here! There's a Canadian company that are sat on an enourmous silver mine but the name of the company escapes me. Pan something or other. Could be worth a look.

Finally, with the Chinese and Indian economies expanding, consider other commodities such as zinc, copper or lead.

Hope this helps.

Redvers - many thanks for the time and trouble you have taken in sharing your ideas and insights. It is sincerely appreciated! Yes I'm beginning to consider the fund route to be honest on these sectors, as they are ones I have little knowledge of. Thanks again and be lucky!!