Global Mining Investments Limited (GMI)

By Jason Fittler

GMI invests in the metal and mining sectors of global equity markets.

GMI is managed locally by Bell Asset Management Limited while the natural resources team of BlackRock Investment Management (UK) Limited is the Investment Manager of the Company.

GMI provides exposure for Australian shareholders through a single ASX-listed entity to a global portfolio of metal and mining securities.

The portfolio comprises around 70 metal and mining stocks, including positions in other international mining companies.

In managing the portfolio of the Company, the Investment Manager aims to exceed the return of the HSBC Global Mining Capital Index in Australian dollars and maximise capital growth through investing globally in natural resource companies.

The Board of GMI has been concerned for some time about the Company’s continuing share price discount to net tangible assets (NTA). This discount has persisted despite consistent outperformance of GMI’s investment portfolio relative to its benchmark and the various initiatives taken over the past four years to close the discount gap.

The Board has announced to the Australian Stock Exchange (ASX) that it intends to put forward to shareholders a proposal to restructure GMI to remove this share price discount to NTA.

GMI will be wound up and the shareholdings will be transferred into a unit trust, this will allow share holders to realise the real value of these shares.

Until recently the share price has been trading at $0.90 per share the price has jumped to $1.05 per share on the back of this news.

As at the end of April 2012 the net tangible assets are $1.19 per share after tax. At present the stock is trading at a discount of 13% to net tangible assets.

GMI is a good example of how the market can mis-price a company.

For more information on Global Mining Investments Limited (GMI) please contact us on 07 4771 4577.