Loading ...The Value Life Cycle Of A Mining Company From Start To Finish In One Graph
The only other point I would make with respect to this graph is that I guess it implicitly assumes the value of the resource being mined is relatively constant.
If there were violent price moves in the resource to be mined, e.g. PoG, that’s going to magnify these rough moves.
Orphan period is only place that interests me to invest in these things but that’s a subjective thing.
I purchased shares in Dynasty Metals & Mining back in 2010 (now called Core Gold), and saw a 50%-60% move in the space of a month (the government
has finally granted the permits!!!!), which I was lucky enough to sell into. Just checked the website and, yep, still nothing doing other
than PP’s (mining existing shareholders’ pockets), 7 years later:
https://www.coregoldinc.com
“The definition of a gold mine is a hole in the ground with a liar on top.” Mark Twain (I think)
This should required reading for all noobs to the resource sector. Very true.
In the interest of adding a bit for those that are greener than me, here’s some lessons I’ve been taught:
Some points I look for: Proven past success, management ownership, and a story that I can wrap my head around. Your own DD is really important. If I can’t explain my investments in simple terms, I’m better off out of the stock. Leaning on other’s research (even gurus/analysts) without doing any of your own can be dangerous. Recognize bias (your own as well). TA is only one tool. The others are fundamentals and patience.
Nice reading. Indeed, too much dilution for most juniors. On top of your story I would add, if a company can not at least raise 4/5M$ or more/year better look elsewhere, as if it only can raise 1-2M, only 50% of that will be put into the ground and any value creation will be diluted away by warrants exercising. Therefore never invest in companies that have lots of warrants outstanding or doing placements with 5 year warrants like ALTA, TBR, R and others,…