Ernst & Young's AIM mining index jumps 47 pct in Q2

LONDON Aug 17 (Reuters) - Advisory services firm Ernst & Young said its index of the biggest 20 mining firms on London's Alternative Investment Market (AIM) jumped 47 percent over the second quarter helped by a recovery in base metal prices.

"Confidence in the junior mining sector on AIM appears to be making a return, but uncertainty remains the prevailing factor," it said in a report on Monday.

"The economic and market conditions ... continue to stress the have/have-not cash divide between junior mining companies. While some companies remain necessarily focused on short-term survival, others are shifting their strategic focus toward pursuing new opportunities for growth."

The index has surged 89 percent since the start of the year, although is down 57 percent from the record high last March, as metal prices have been lifted by demand from China, the world's top consumer of many industrial metals.

Copper prices MCU3 have almost doubled this year and all of the base metals have risen from the depressed levels at the end of 2008.

Frontier Mining (FMLq.L), a copper and gold explorer and developer in Kazakhstan, made the biggest recovery with its share price soaring almost 1,000 percent during the second quarter helped by news of a financing agreement.

Five mining firms delisted over the period, while no new companies joined AIM for a third consecutive quarter, reducing the number of mining firms to 168, Ernst & Young said. (Editing by Jon Loades-Carter)