By: rob rens
How To Analyze Junior Exploration Companies:
Most conventional analytical techniques cannot be applied to junior exploration companies. Most juniors lack either a property with a PROVEN economic ore body or sufficient capital to attain production should a mine be found. How then are junior companies evaluated? The following are some factors to be considered:
1) Extent of exploration activities and location of properties
2) Management's track record - Is management experienced? Have they discovered or do they operate any producing mines?
3) Financial position - Is there enough working capital to finance exploration or will more treasury shares have to be issued ?( this is where dilution comes into place )
4) Common shares issued - How many common shares are issued and outstanding? (o/s) If a company has few assets and a great number of common shares o/s ( I smell OTC ... ), a reverse stock split may be necessary before new equity capital can be raised.
Successful analysis of junior mining companies and their correlating share price requires SPECIALIZED knowledge (Shhh, can you keep a secret), patience and willingness to devote a great deal of time to security selection. Shares of junior mining companies can resist sharp price fluctuations in response to favorable or unfavorable news or rumors. Nimble trading is required if profits are to be realized or losses minimized.
There you have it class.... from my brain to yours
Most conventional analytical techniques cannot be applied to junior exploration companies. Most juniors lack either a property with a PROVEN economic ore body or sufficient capital to attain production should a mine be found. How then are junior companies evaluated? The following are some factors to be considered:
1) Extent of exploration activities and location of properties
2) Management's track record - Is management experienced? Have they discovered or do they operate any producing mines?
3) Financial position - Is there enough working capital to finance exploration or will more treasury shares have to be issued ?( this is where dilution comes into place )
4) Common shares issued - How many common shares are issued and outstanding? (o/s) If a company has few assets and a great number of common shares o/s ( I smell OTC ... ), a reverse stock split may be necessary before new equity capital can be raised.
Successful analysis of junior mining companies and their correlating share price requires SPECIALIZED knowledge (Shhh, can you keep a secret), patience and willingness to devote a great deal of time to security selection. Shares of junior mining companies can resist sharp price fluctuations in response to favorable or unfavorable news or rumors. Nimble trading is required if profits are to be realized or losses minimized.
There you have it class.... from my brain to yours
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