Have you focused on the following things we think are important when determining whether to invest in Junior Mining Exploration Companies in the Current Market?

The following is a checklist of a number of the things we think investors should carefully consider when assessing Junior Mining Exploration Stocks in the current market environment:

1. Analyze prior promises: be extremely hardheaded and cynical in your assessment of your current and prospective Junior Mining investments. Critically analyze prior management promises against actual performance. In this regard, we suggest you focus on whether companies that raised money in the last three years through a private placement or prospectus offering spent that money in a way that resulted in NI 43-101 Resources or Reserves believed to have a chance of commercial exploitation;

2. Cash on hand: recognize that in today’s environment ‘cash really is king’. Look for companies with enough cash on hand to further prove up existing NI 43-101 Resources or Reserves, and who have no debt. Both our personal experience and antidotal evidence have convinced us that companies with only limited cash or without cash are finding it increasingly difficult to raise new equity. We think these funding difficulties are likely to worsen before they improve. We believe it is becoming increasingly difficult to raise exploration funds, and where a Junior Explorer is successful in closing a financing it typically in this market is doing so from a poor negotiating position – resulting in greater existing shareholder dilution than would be the case in more normal markets;

3. Failure to exploit opportunities: if the company raised money in the past three years and failed to find exploitable NI 43- 101 Resources or Reserves we suggest you consider carefully how this reflects on company management;

4. Conflicts of interest: if you participated in a private placement or prospectus offering in the past three years, and if you take advice from the person or firm who advised you to participate in the offering, consider the conflict of the person or firm who recommended it. It is highly unlikely they will admit to having made mistakes when assessing either management ability or the exploration properties at the time of the offering;

5. Quality of assets: consider the quality of the properties owned by each company in the context of whether they may be attractive to an acquirer or merger partner. Given current market conditions it will come as no surprise to us if there is a flurry of merger and acquisition activity among Junior Miners;

6. Bargain investments: in this market look for exploration companies whose current share prices might be bargains. We think you should review and analyze at least the following when making such assessments:

• evidence of experienced management – look for recent Board of Director and management changes that ought to bring ‘management enhancement’ to potentially interesting exploration properties;

• cash positions that will enable further exploitation and potential exploitation of NI 43-101 Resources or Reserves;

• properties that are in stable political environments friendly to mine development;

• properties that have or are close to existing transportation, utilities, and ore processing infrastructure;

• regularity of Press Releases announcing consistently positive drill results;

• properties that as they are further proven up might be of interest to major producers;

• current stock prices that are significantly below recent trading prices – particularly if the current stock price is less than a recent financing price where institutional and other ‘sophisticated’ investors participated and no material events have occurred between the closing of the financing and the current date;

• Insider Trading to determine if Insiders are buying shares; and,

• daily average share trading volume in order to determine the likelihood of being able to liquidate your shareholding in a reasonably short period of time.

StockResearchPortal.com facilitates screening for cash and debt on hand, daily average share trading volumes, and Insider Trading through the Compare & Rank Companies and Company Research tabs found on its Main Navigation Bar.

The views expressed in this Post are those of the author. They are offered to readers for information and general guidance only. They are neither intended to, nor should be taken to, constitute economic or investment advice. See Legal Disclaimer.

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