GUIDELINE TO INVEST IN A JUNIOR MINING COMPANY.
Management: Look for a qualified management team with experience in geology, operations, finance, and marketing. Management teams that have successfully put mines into production in the past and own a significant interest in the company are preferable.
Current supply/demand: Check where capital is flowing in the mining sector and become aware of projects in the pipeline to assess whether the supply is increasing or decreasing.
Location: Consider the political and social climate of the project's location as it can impact the risk of project failure. Also, assess the availability of infrastructure, electricity, water, and roads, in the region.
Stage of production: Companies that are closer to producing carry less risk than those in the exploration stage.
- Studies: Look for companies that have conducted Preliminary Economic Assessments, Preliminary Feasibility studies, and Feasibility Studies.
- Financing: Seek well-financed junior mines with no immediate need to sell shares at low prices. Determine if a major partner has agreed to fund the exploration and development.
- Cost: Assess the company's spending on exploration versus administration costs and the share structure.
Share structure: Consider the number of outstanding shares and the potential for stock appreciation.
Trading volume: Examine the average daily trading volume of the company.
Market cap: Compare the company's market cap to the estimated value of the mineral resource they have in the ground.
- Dividend strategy: Assess the company's dividend distribution strategy if it aligns with the production profile.
- Communications: Look for companies that effectively communicate their value proposition to investors, given the technical nature of the mining industry.
DISCLAIMER
This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. Whilst reasonable efforts have been made to ensure the accuracy of the content of this publication, no warranties or representations (express or implied) are made as to the accuracy, currency, or comprehensiveness of the information contained in this publication. The information, tools, and material presented herein are provided for informational purposes only and are not to be used or considered as an offer or a solicitation to sell or an offer or solicitation to buy or subscribe for securities, investment products, or other financial instruments. Nothing in this publication shall be deemed to constitute financial or other professional advice in any way, and under no circumstances shall the company, its members, employees, or agents be liable for any direct or indirect losses, costs, or expenses nor for any loss of profit that results from the content of this publication or any material in it or website links or references embedded within it. This publication may contain references to material(s) from third parties whose copyright must be acknowledged by obtaining necessary authorization from the copyright owner(s). The content of this publication, either in whole or in part, may not be reproduced, or transmitted in any form or by any means, electronic, photocopying, digitalization, or otherwise without the prior written permission of the publisher