Whether you are Warren Buffet or an ordinary do-it-yourself investor, doing your homework is vital to managing your investments successfully. Almost all of the experts we’ve talked to have consistently told us the same thing: investors need to do their due diligence before making investment decisions. Given the risks associated with investing, the advice is prudent, but even more so when you consider how much marketing investors are exposed to.
Because every company has a story to tell, seasoned investors learn to separate hype from fact and ask informed questions about potential investments before taking any kind of investing plunge. For beginner investors, two common challenges to sound decision making are knowing what questions to ask and understanding what facts to look out for when assessing potential opportunities. To make matters more challenging, while there is a lot of information out there to help you learn about investing, finding good information can be onerous, sometimes requiring “Buffet-like” patience and scrutiny.
Understanding how to invest in junior mining companies
Given the popularity of junior mining stocks with investors and the enormously speculative nature of the investments, understanding some of the basics of mining and exploration is essential to navigating the sheer number of stories out there. While not a comprehensive list, experts often mention that when considering junior mining companies investors should pay attention to the following:
- The mining company’s structure
- The track record of the management team
- The nature of the deposit itself
- The jurisdiction of the project(s)
To help our readers with their homework, we have put together a selection of resources that help explain important points of investing in junior mining and exploration companies. The resources we’ve gathered take a fundamental approach to understanding junior mining and exploration companies and cover information on topics such as understanding share structures, basic resource sector terms and concepts investors should be familiar with, how to read financial statements of mining companies and more.
As a note, these sources provide a good overview and starting point but are not intended to be exhaustive. Keep in mind that the works likely reflect each author’s particular viewpoint and/or interests. That said, we think these resources offer concise but informative ways of analyzing junior mining and exploration companies.