As with any other investment, regardless of industry, investors must do due diligence to select which junior mining companies to invest.
With mining in a bull market, there are some specific variables to consider when determining which junior mining stocks to invest:
Quality Resource – Investors should look for a company with a defined, high-grade resource and large mineral deposit. Moreover, a company that has the potential to host multiple deposits is a sign they are on the road to success.
Ideal Property Location – Whether the area has seen significant discoveries in the past and whether there are existing mines close by helps. In addition, since the mining industry is susceptible to government regulations, investors must look for mining companies that are in politically stable regions.
Major Interest – If a major mining company has shown interest or has partnered with a junior, this speaks to the credibility of the junior mining company.
Strong Capital Structure – Tight share structure and no debt are indicators of a junior that is worth considering.
Strong Management Team – The management team is critical in the success of every junior mining company. Even with a valuable resource, junior mining companies struggle without an experienced management team.
Do your homework and you will increase the chances of investment success. Good luck!