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“Everyone dreamed of the day when they would be the one to strike it
rich, but what does it mean to people today? I’ll tell you, a big house and a
nice car. People don’t see that it’s so much more than just finding the golden
score. It’s not seen as a building block for freedom. It’s been twisted and
messed up to the point of being stuck on a scratch and win ticket. That is
what is left of the prospector’s dream in today’s world. All the people
around you don’t understand, they can’t see the freedom and the hope it
brings you when you chase the dream. They just think you’re dreaming, but we
know the truth don’t we?" Daryl Friesen author, Seekers Of Gold
Prospectors are today still scouring the bush, in remote, and not so remote
places – chasing the rainbow and its pot of gold - looking for the next
discovery.
Prospecting, whether for precious or base metals, is of course the
integral first step in the process of discovery, walking the bush and
hammering rocks means boots on the ground. It's people walking through the
bush that have found the worlds mines.
Staking claims and making a deal with a junior resource company, a
vendor’s agreement, is often the second step – the prospectors claims are
turned over to be worked for shares and or cash and a one or two percent net
smelter royalty (NSR) from a mine if the showing goes all the way. Most
prospectors don’t have the wherewithal, the money raising capabilities or the
expertise to develop a showing so this is where a junior would come in. Being
publically traded they have access to capital and expertise the prospector
most often does not.
Why are the juniors so successful at finding mines? Well the good ones are
lean mean boots on the ground exploration and development companies run by
people who have been out there and know what it takes. They know how to raise
money from the suits and they know how to get the story out to the retail
investor.
They are not tied up in bureaucratic red tape and can make the important
decisions without commissioning a six month study or running it up through 12
layers of pencil pushers and then sitting on their butts waiting for an
answer while somebody else scoops the prize. They can and do make up their
minds very quickly and can execute immediately on plans.
Juniors outperform majors
Mining is a self-depleting industry meaning mines have an inherently
limited lifespan. Every day a mine operates, it is that much closer to
running out of ore. So the industry needs to find new deposits in order to
replace these ever-depleting mines.
For the past decade, junior mining companies have outperformed senior
miners at finding new mineral deposits and generating wealth for
stakeholders.
“These are among some of the findings released in a study conducted by
resource company strategist MinEx Consulting, which analyzed the performance
of explorers and producers operating in Canada between 1975 and 2014. What
the consultancy firm found is that, in the last decade, junior companies were
responsible for more than three quarters of all new mineral discoveries and
were approximately 30 percent more effective than senior companies at
generating wealth…
In 2009, 2010 and 2012 senior companies failed to make a single new
discovery.
Juniors handily beat the seniors when it comes to the total number of
discoveries. Of all the deposits found, over three quarters were made by
junior miners.
 
Juniors also spent more than the seniors on exploration - $14.6
billion compared to $12.5 billion - and their discoveries collectively had a
much higher valuation - $12.1 billion compared to $7.9 billion.” Frank
Holmes, Junior Mining Companies Have Taken a Senior Role
Vancouver, British Columbia Canada is the home of the TSX Venture Exchange
(CDNX) - it is the market for juniors. Exploration and development companies
focused on precious/base metals, other minerals, energy and technology all
call it home. Is it a perfect indicator? No, perfection in anything is an
illusion, but to this author it does show a bottom is developing. And that’s
why this summer, yes during the summer doldrums (June, July, August), could
be the perfect time to be cherry picking individual resource juniors and
accumulating shares.
Conclusion
Only a few prospectors among the many thousands who search ever find an
economic to mine deposit. But prospecting success and drill programs that are
targeting these showings should be on every investors radar screen.
For a fact most of us can’t be prospectors, and it’s pretty difficult to
invest directly in a prospector. But for those of us who dream of discoveries
made and riches hard won we can chase the rainbow through our publically
traded junior resource companies.
If you want to invest in a potential discovery, or the building of
something of value – be in on the discovery of a mineral deposit and be there
as the company moves it down the development path towards a mine there are
quality junior companies to choose from. There are enormous opportunities to
back excellent management teams with your investment money.
Is cherry picking on your radar screen?
If not, maybe it should be.
Richard lives with his family on a 160 acre ranch in northern British
Columbia. He invests in the resource and biotechnology/pharmaceutical sectors
and is the owner of Aheadoftheherd.com. His articles have been published on
over 400 websites, including:
WallStreetJournal, USAToday, NationalPost, Lewrockwell, MontrealGazette,
VancouverSun, CBSnews, HuffingtonPost, Beforeitsnews, Londonthenews,
Wealthwire, CalgaryHerald, Forbes, Dallasnews, SGTreport, Vantagewire,
Indiatimes, Ninemsn, Ibtimes, Businessweek, HongKongHerald, Moneytalks,
SeekingAlpha, BusinessInsider, Investing.com, MSN.com and the Association of
Mining Analysts.
Please visit www.aheadoftheherd.com
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***
Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or
the solicitation of an offer to purchase or subscribe for any investment.
Richard Mills has based this document on information obtained from sources
he believes to be reliable but which has not been independently verified.
Richard Mills makes no guarantee, representation or warranty and accepts
no responsibility or liability as to its accuracy or completeness.
Expressions of opinion are those of Richard Mills only and are subject to
change without notice. Richard Mills assumes no warranty, liability or
guarantee for the current relevance, correctness or completeness of any
information provided within this Report and will not be held liable for the
consequence of reliance upon any opinion or statement contained herein or any
omission.
Furthermore, I, Richard Mills, assume no
liability for any direct or indirect loss or damage or, in particular, for
lost profit, which you may incur as a result of the use and existence of the
information provided within this Report.
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