How Does BVG Stack Up?from a recent email from stockresearchportal.com and who was the first company that I thought of here??
The following is a checklist of some of the things I think should be carefullyconsidered when assessing Junior Mining Exploration Stocks.
1. Analyzeprior promises: be extremely hardheaded and cynical in your assessment of yourcurrent and prospective Junior Mining investments. Critically analyze priormanagement promises against actual performance. In this regard, we suggest youfocus on the track record of the Board and Management in raising money throughprivate placements or prospectus offerings and converting those equity raisesinto NI 43-101 Resources or Reserves believed to have a chance of commercialexploitation - or better yet, have a track record of developing Resources orReserves and selling them to 3rd party producers. I also suggest you speak directly with the President ofeach company, and canvas with him/her the prior experience and success of boththe Board and Management team of their respective companies. I have yet to finda company President who was not receptive to speaking directly withshareholders.
2.Cash on hand: recognize that 'cash really is king', and that has never beenmore true than in today's economic environment. Look for companies with enoughnet cash on hand (cash and equivalents less existing debt) to complete ameaningful exploration program on a promising property(ies), or to further proveup existing NI 43-101 Resources or Reserves. Both my personal experience andanicdotal evidence has convinced me that companies with only limited cash orwithout cash continue to find it difficult to raise new equity, and if they areable tot raise equity they typically do so in today's environment on highlydilutive terms.
3. Quality of assets: consider the quality of the propertiesowned by each company in the context of whether they may be attractive to anacquirer or merger partner. Given current market conditions I believe it islikely there will be significant merger/acquisition activity involving JuniorMiners.
4. Bargain investments: in this market look for explorationcompanies whose current share prices might be bargains. I think you shouldreview and analyze at least the following when making suchassessments:
· evidence of experienced management - look for recentBoard of Director and management changes that ought to bring 'managementenhancement' to potentially interesting exploration properties;
· cash positions that willenable further exploitation and potential exploitation of both explorationproperties and NI 43-101 Resources or Reserves;
· properties that are in stablepolitical environments friendly to mine development;
· properties thathave or are close to existing transportation, utilities, and ore processinginfrastructure;
· regularity of Press Releases announcing consistentlypositive drill results;
· properties that as they are further proven up mightbe of interest to major producers;
· current stock prices that aresignificantly below recent trading prices - particularly if the current stockprice is less than a recent financing price where institutional and other'sophisticated' investors participated and no material events have occurredbetween the closing of the financing and the current date;
·Insider Trading to determine if Insiders are buying shares (see Reported Tradesby Insiders' on each Company Page of SRP.com); and,
· daily averageshare trading volume in order to determine the likelihood of being able toliquidate your shareholding in a reasonably short period of time (see Price& Volume Table on each Company Page of SRP.com).
These are only someof the factors that comprise a detailed 'checklist' of things to consider wheninvesting in Junior Mining Companies. I plan to discuss others in subsequente-mails.
COMMENTS??