Silver and titanium producers look worth a punt

year high on Friday after the company increased reserves at one of its projects.

Shares in Peru-based silver miner Hochschild Mining (390.5p) hit a two-

The company has a 30 per cent stake in the Inmaculada mine and said the new resource estimate represented a 245 per cent increase in gold ounces and a 225 per cent increase in silver ounces, compared with the previous estimate.

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Hochschild is targeting total production of 26.3 million ounces this year and has an exploration budget of $50m, 42 per cent of which is earmarked for exploration at the company's existing mines and 58 per cent at new greenfield sites.

The group's shares have also been boosted by the resurgent silver price, which looks like it may have further to run. Buy, but any pullback in precious metals prices could hit the valuation hard.

Mozambique-based titanium group Kenmare (20.75p) will enter the FTSE 250 this Friday. This is good news as tracker funds will now pile into the shares, which have risen 11 per cent in one week.

Supplies of titanium are expected to be lower than demand by 2013. The company moved into profit at the interim stage, and the group's processing plants are working at full pelt.

The shares are trading on a December 2011 earnings multiple of 27.6. However, the production ramp-up means the multiple hits 6.9 in 2013. The company is not paying a dividend, so the investment is not suitable for income seekers. Buy.

Mail on Sunday

Sinclair Pharma (27.25p) produces products such as acne cream, cures for athlete's foot, eczema relief and burn products, as well as a host of other treatments for skin and mouth problems.

Since joining as chief executive last year Chris Spooner has taken steps to rebrand the company's products to share a common and highly appealing look. He has also embarked on an energetic restructuring, streamlining the product range, forging a corporate culture and changing 28 of the 137 staff to create fewer managers and more workers.

Sinclair had focused on Europe but Spooner is keen to expand into emerging markets, where demand for skin products is soaring.

The company recently raised 19m in a share placing and intends to use a large part of the money to develop new lines, including a spray for athlete's foot that needs to be applied only once.

Results for the year to June 30 were released last week, showing a pre-tax loss of 18.4m, against a loss of 2.7m in 2009, as Spooner restructured the business, incurring one-off costs of several million pounds.

Stripping out these expenses, Sinclair was consistently profitable for the first time ever in the second half of its financial year and continued to make progress over the summer.

The company is relatively small and there are some risks attached, but for those prepared to have a bit of a punt, the shares are a buy.