Junior mining companies listed on London Stock Exchange’s AIM continued to face funding problems in the third quarter with the more major exploration companies attracting the investment, according to the Ernst & Young (E&Y) Mining Eye Q3 2009 report.

Major mining companies are more attractive alternatives for investors as they trade on low price to earnings ratios.

Investors also favoured larger junior miners with advanced projects that provide near-term upside to the share price either through the start of output and subsequent earnings or as possible takeover targets.

Several junior exploration companies have said that if the situation does not change they will not be able to pay off their debt, overheads or fund their exploration work.

The tough market conditions faced by junior miners were highlighted in the three delistings in the third quarter of 2009, E&Y said.