We have been investing in junior mining companies for over 20 years, and simply put, a junior resource company’s journey from being worth ‘not very much’ to being ‘worth a lot’ can be summarised in the following steps…
Mining Company Life-cycle & Risk
- Explore for a resource deposit
- (Hopefully) find a resource deposit and then figure out how big and valuable it is
- Work out whether it is worth investing money to extract the resource from that ground
- If yes, design and construct all the stuff required to extract that resource and ship it to market
- Find someone to buy the resource (sign an offtake agreement)
- Start extracting and shipping the resource - this is called production and in other words… making money.
The resource company lifecycle can be seen in the following diagram, we’ve also highlighted some of the stocks that we have invested in to showcase where they sit on the journey:
Each of these companies are at a different stage of the journey with the stocks towards the left (exploration) highly speculative investments, and the stocks towards the right much closer to production.
Undertaking this journey is not cheap, and companies often require (your) capital to fund their operations, so it is important to understand the risks and opportunities involved with these types of investments.
In this section you will learn about the stages of the mining company lifecycle, the permitting and funding processes as well as some of the technical aspects that are involved at each stage of the mining company journey.