56. Does the Mining Industry Employ Interns?

Over the last year or so I have been working on a side project I founded within the tech industry.   One of the things that recently came to the forefront was the use of interns, unpaid interns, that is.   I know that  interns have been used for years in other industries including legal, politics, journalism, and marketing; however I have never come across the use of interns within the mining industry.
Intern
I was recently speaking with a marketing consultant about how to undertake tech marketing and one of the suggestions she made was to hire an intern to do much of the legwork of finding contacts and making contact with them.  My first question was why would anyone work for free?  I was told there were three reasons:
  1. For credit; as part of a course credit in college or university where an internship is part of the programme requirement.
  2. For experience; one can’t get a real job without experience and so the internship teaches something, builds up experience, and creates a portfolio of work.
  3. Networking; building up network connections can possibly lead to permanent work.
At first I was taken aback at the thought of asking someone to work for me for free.  Are we that cheap?   On the other hand if you are paying someone a salary, the expectation is that they should be relatively skilled at their job.  Giving it some further thought, , I have come to realize that the internship may actually be a win-win for both parties.
The company gets to better know potential employees and also gets some productive service from them at no cost.  The intern grows their employment experience and learns about the realities of the business world.  The students are paying the schools to teach them, and now businesses can help teach them as well, but at no cost.   It’s a win-win.
So how did our intern search go?  We posted a free ad on indeed.ca.  Within 48 hours we received eight replies, of which only 2 came close to meeting the qualifications.  Some of the applicants had no relevant experience at all.   Possibly in today’s job market people are willing to work for free on the chance they can get some experience on their resumes which will hopefully lead to a job in the future.  We’ll maintain the job ad for a couple more weeks and see what the overall response will be.
My bottom line is asking whether the mining industry can make use of interns in the areas of geology, engineering, marketing, graphics, etc?  There may be a lot of young students out there looking for opportunity and willing to do whatever it takes to help advance their careers.   Even if your payroll budget cannot afford the cost of another person, you still may be able to help out someone within the industry.
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55. Underground Feasibility Forecasts vs Actuals

I recently attended a CIM Management and Economics Society presentation discussing the differences between actual underground production versus the forecast used in the feasibility study. The presenter was Paul Tim Whillans from Vancouver Canada. His topic is interesting and relevant to today’s mining industry and Paul raised many thoughtful points supported by data. The abstract for his paper is copied below and the entire paper can be downloaded at this LINK and here are the presentation slides.
ABSTRACT
An underground mining study that is done in accordance with NI43-101, JORC or similar reporting code is generally assumed by the public to be representative, independent and impartial. However, it has been well documented by academics and professionals in our industry that there is a sharp difference between the forecasts presented in these underground studies and the actual costs when a mine is put into production.
For underground mines, the risks associated with obtaining representative information are much greater than for surface mining and the cost of accessing underground ore is also proportionally much greater. There is a pressing need to align expectations, by improving the accuracy of projections. This will result in reduced risk to mining companies and investors and provide more reliable information to government agencies, the public, and more importantly, the communities in which the proposed mine will operate.
The objective of this article and an article currently being written titled “Mining Dilution and Mineral Losses” is to:
– Discuss the dynamics of intention that lead to over-optimism;
– Provide simple tools to identify which studies are likely to be more closely aligned with reality;
– Identify some specific points where underground mining studies are generally weak;
– Discuss practices currently in use in our industry that lead to a composite or aggregate effect of over optimism;
– Describe the effects of overly optimistic studies;
– Outline specific changes that are necessary to overcome these challenges; and
– Stimulate discussion and awareness that will lead to better standards.

Headframe

In my opinion, I agree with many of the points raised by Paul. The mining industry has some credibility issues based on recent performance and therefore understanding the causes and then repairing that credibility will be important for the future of the industry. Credibility impacts on shareholder returns, government returns, local community benefits, and worker health and safety; so having a well designed mine will realize benefits for many parties.
If you need more information Paul’s website is at http://www.whillansminestudies.com/
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52. Mining Press Releases – Where to Get Them

There are numerous sources of mining information on the internet, encompassing topics such as technical articles, analyst opinions, and company press releases. It can be overwhelming sometimes. Now if your main interest is just seeing company news releases in a timely manner then what is the best way to do this?
One way is to go to the individual company website and sign-up one their email list. This approach generally works well but it forces you to sign up on a myriad of websites if you intend to follow a lot of companies. There are alternatives however.
One option is to sign-up for a free account with a newswire service where you can select the specific companies that you want to follow and then will get emailed news releases as soon as they are disseminated. The nice thing here is that you can select mining companies, non-mining public companies, as well as entire industries. Here are a few that I personally make use of.
Since different companies may use different news release distributors, the three websites that I track are:
Marketwire: There you can create a “Hot Off the Wire” account and then select your companies of interest. You can also select entire industries to add to your company list.
CNW Group Ltd.  Create an account there and search various companies to add to your “My Subscriptions” list.
Junior Mining News is another source to get general news updates via their daily newsletter, a screenshot is shown below. Their daily email gives a brief summary of events that happened recently and includes “Read More..” links if you want to read the entire press release. This website accesses some of the same news release distributors as mentioned above so there could be some repetition from time to time.

 

Junior Mining News screenshot

Using the services described above, it’s very easy to sign up for a lot of companies, too many companies in fact, and then get inundated with emails. We know that public companies need to keep the news flow active and some companies are very good at continually issuing news alerts. However by using the press release distribution websites you are consolidating your requests, thereby making it easier to control the amount of information you want to receive.
Feel free to share your method for tracking companies, whether using the same websites or something entirely different and better.
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45. Do Any Junior Producers Model a Gold ETF?

I have often wondered if any of the junior gold producers has ever tried to model itself after a gold Exchange Traded Fund (“ETF”). This hybrid-model may be a way for companies to provide shareholders a way to partly leverage themselves to physical gold rather than leveraging solely to the performance of a mine. Let me explain further.
Consider two identical junior mining companies starting up a new mine. Each of their two projects is identical; 2 million gold ounces in the reserves with annual production of 200,000 ounces resulting in a 10 year mine life. On an annual basis, let’s assume their annual operating costs and debt repayments can be paid for by the revenue from selling 180,000 ounces of production. This would leave 20,000 gold ounces as “profit”. The question is what to do with those 20,000 ounces?

Gold Dore

Company A sells their entire gold production each year. At $1200/oz, the 20,000 oz gold “profit” would yield $24 million. Income taxes would be paid on this and the remaining cash can be spent or saved. Companies may decide to spend more on head offices costs by adding more people, or they may spend some on exploration, or they could spend on an acquisition to grow the company. There are plenty of ways to use this extra money but returning it to shareholders as a dividend isn’t typically one of them. Now let’s jump forward several years; 8 years for example. Company A may have been successful on grassroots exploration and added to reserves but historically exploration odds are working against them. If they actually saved a portion of the annual profit in the bank, say $10M of the $24M, after 8 years they may have $80M in cash reserves.
Company B only sells 180,000 ounces of gold each year and puts the remaining 20,000 ounces into inventory in a vault. Their annual profit-loss statement shows breakeven status since their gold sales only cover their financial commitments and nothing more. In this scenario, after 8 years Company B would have 160,000 gold ounces in their vault, valued at $192 million at $1200 gold price.
If you’re an investor looking at both these companies in the latter stages of their mine life, which one would you rather invest in? Company A has 400,000 ounces remaining in mineral reserves and say $80M cash in the bank. Company B also has 400,000 ounces of mineral reserves and $192 million worth of gold in the vault. If I’m a gold bull investor and foresee a $1700/oz gold price, then to me Company B might theoretically have $272M in the vault. If I’m a super gold bug, then their inventory could be worth a lot more..theoretically.
I assume that the enterprise value of Company A would be based on its remaining reserves at some $/oz factor plus its cash in the bank. Company B could be valued the same way plus its gold inventory. So for me Company B may be a much better investment than Company A in the latter stages of its mine life. In fact Company B could still persist as an entity after the mine has shutdown simply as a “fund” that holds physical gold. If I am a gold investor, then Company B as an investment asset might be of more interest to me.
My bottom line is that it appears that most of the time companies sell their entire annual gold production to try to show profit on the annual income statement. Possibly this is to put some cash in the bank and to show “earning per share” to the analysts. My question is why not inventory the extra gold and wait for prices to rise if the company doesn’t really need the money or doesn’t want to gamble it on exploration or acquisitions? This concept wouldn’t be a model for all junior miners but might be suitable for a few companies to target certain gold investors.  They could provide an alternative junior mining investment especially interesting in the final years of a mine life. Who wants to buy shares in a company who’s mine is nearly depleted?  I might if they hold a lot of gold.
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43. Mining Fads and the Herd Mentality

Have worked in the mining industry for over the last 30 years it is always interesting to see the herd mentality that exists and how we all can easily get caught up in fads.  All it takes is a short term spike in a commodity price or a big discovery somewhere and then off we go running in that direction.  It doesn’t matter the rationale driving the event, all we know is that we need to be there and our investors want to be there too.
Based on my experience, the fads that grab us can include specific commodities, locations, or technologies. The industry is very flexible in that regard. I’ll give a few examples below and you probably have more examples from your own experience.

Commodity Fads

It seems that as soon as there is a price spike or positive market narrative, any commodity can take a life of its own.  The following are a few examples and when you think about them ask how many actually came into production or successful production.
  • Potash – a few years ago potash prices spiked and potash properties were all the fad no matter where they were located around the globe, be it Canada, Russia, Ethiopia, Thailand, Brazil, etc.
  • Lithium / Graphite – as soon as green technology started to be promoted in the news, miners couldn’t run fast enough to pick up the lithium properties, same idea hold for the graphite and vanadium and rare earth categories.
  • Uranium – years ago uranium prices spiked and Ur properties were hot everywhere.
  • Nickel; a spike in nickel caused a surge in nickel properties being it sulphide nickel, laterite nickel, or other forms.
  • Iron Ore – in conjunction with the Chinese construction boom, iron ore properties were hot around the globe, in high cost or low cost jurisdictions, it didn’t matter where the property was.
  • Diamonds – in conjunction with the first diamond discoveries in Canada, quickly diamond properties because hot, whether in the Canada or around the globe.  If you couldn’t get a property in Canada’s boom area, anywhere else was fine.
  • China in general – whereby every base metal project was thought of as either a potential supplier to China or a potential acquisition for Chinese companies.  As long as it could meet Chinese investor interest it was good.

Location Fads

We have all seen the staking rushes that occur when a world class prospect is discovered.  I’m sure we can all recall getting the large claim maps (as shown below) with their multicolored graphics showing the patchwork of acquisitions around a discovery. PDAC was great for distributing these and they were well done and interesting to study.
Mineral claim map example
Picking up properties in hot areas became the fad and share prices would move upwards regardless of whether there was any favorable geology on the property.  Who recalls the following?
  • Voisey Bay; with a mad staking rush around there, with nothing else really paying off in the long run.
  • Saskatchewan;  and the potash staking rush where almost every inch of the potash band was staked with only a couple of companies eventually moving forward and only one going into production.
  • Indonesia; during Bre-X people could get properties in Indonesia fast enough.
  • NWT;  where the diamond property staking rush was crazing in the mid 1990’s.

Technology Fads

Even mining or processing technology could get caught up in somewhat of a wave and become a fad for further study, a rationale often driven by suppliers or consultants.  Who can recall…
  • Paste Tailings; with numerous conferences and consultants promoting thickened or paste tailings technology as the panacea leading to numerous studies related to thickening, pumping, and disposal.
  • Block Caving; whereby in order to deliver high tonnages at low cost, bulk underground mining was being promoted.  Everyone wanted their underground project to be a low cost caving style operation.
  • High Pressure Grinding Rolls (HPGR); where process consultants would tout HPGR as the new replacement for conventional grinding mills.  I’m not sure this technology has taken the industry by storm as they were hoping.
  • IPCC; whereby inpit crushing and conveying was being promoted in many articles and global conferences as the solution to operating cost pressures.  I think implementation of IPCC technology isn’t as simple as envisioned.
  • Dot.com; in the early 2000’s many junior miners left exploration behind and transitioned to the dot.com boom, a fad with generally poor results.
  • Medical marijuana; seems to be the hopeful target for some junior miners today. Unfortunately there is only so much marijuana you can sell.
  • Pre-concentration; this seems to be a growing technology fad that may be gaining momentum, with a few consultants pushing for it to be studied more.  This isn’t new technology and will have its benefits but a big stumbling block is how many deposits are actually suitable for its application.
My bottom line is that over the years it has been interesting to watch the mining industry react to events.  Sometimes it seems like we’re passengers on a boat running from one side to other side and then back again.  Unfortunately that doesn’t necessarily make for smooth sailing and can result in upset stomachs.
What’s the next fad? I don’t know but if you could predict it we can probably make a lot of money.

 

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42. Global Tax Regimes – How Do They Compare?

Just as a reminder for all QP’s doing financial analysis for PEA’s, don’t forget that one needs to present the financial results on an after-tax basis.   Every once in a while we still see a PEA technical report issued only with pre-tax financials.  That report is likely to get red- flagged by the securities regulators and the company will then have to amend their press release and technical report in order to show the after tax results.    No harm done other than some red faces.
When doing a tax analysis in your model, where can you find regional tax information?  For those of you that prepare financial models or are simply looking at mining projects in different jurisdictions, PWC has a very useful tax-related website.  The weblink was sent to me by one of my industry colleagues and I thought it would be good to share this.
The PWC micro-site provides a host of tax and royalty information for selected countries.  The page is located at http://www.pwc.com/gx/en/industries/energy-utilities-mining/mining/tax.html
On the site they have tax information for specific countries and you can either view the information on your computer screen or download a PDF version.  Below is a screen capture from the PWC website.

 

PWC Mining taxes information

The PWC tax and financial information includes topics such as:
  • Corporate tax rates
  • Excess profits taxes
  • Mineral taxes for different commodities
  • Mineral royalties
  • Rates of permissible amortization
  • VAT and other regulated payments
  • Export taxes
  • Withholding taxes
  • Fiscal stability agreements
  • Social contribution requirements
PWC has a great web site and hopefully they will keep the information up to date since changes in the laws are occurring constantly.   It would be nice to see them add more countries to their 22 country database but it’s already good as it is.  Check it out.

 

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41. Resource Estimates – Are Independent Audits A Good Idea?

Question: how important is the integrity of a tailings dam to the successful operation of a mine?   Very important; so much so that in some jurisdictions regulators may soon be stipulating that mining companies must have third party independent review boards or third party audits done on their tailings dams.  The feeling is that although a team of capable engineers may be doing the dam design, there is still a need for some outside oversight to get another perspective.  Differences in interpretation, experience, and errors of omission are always a possibility regardless of who does the work.  Hence a second set of eyes can be beneficial.
Next question is how important is the integrity of the resource and reserve estimate to the successful operation of a mine?   Very important; the mine life, project economics, and shareholder value all depend on it.     So why aren’t a second set of eyes or third party resource audits commonly done?
In the years prior to 43-101, junior mining companies could produce their own resource estimates and disclose the results.  With the advent of NI 43-101, a second set of eyes was introduced whereby an independent QP  could review the company’s internal resource estimate and/or prepare their own estimate and ultimately take legal responsible for the estimate.
Nowadays most small companies do not produce their own in-house resource estimates and the task is generally awarded directly to an independent QP.   Maybe companies don’t prepare their own in-house resource estimates due to the specialization needed in modelling and geostatistics, and the knowledge needed to use today’s block modeling software.   Maybe they feel doing their own internal resource estimate is a waste of time since an independent QP will be preparing an estimate for them anyway.
Given that, in many cases the project resource estimate is prepared solely by the QP or a team of QP’s.   In many cases this resource gets published without any other oversight, in other words without a second set of eyes taking a look at it.   The assumption is that QP doing the work is a qualified expert, their judgement is without question, and their work is error free.

Exploration Program in Andes

As we have seen recently, some resources estimates have been mishandled and disciplinary actions have been taken against some QP’s.   I guess one can conclude that maybe not all QP’s are perfect.  Just because someone meets the requirements to be a Competent Person or a Qualified Person does not automatically mean that they are competent or qualified. Geological modeling is not an exact science and will be partly based on the person’s experience and what they have seen in the past.
My question is whether it wouldn’t be good practice for companies to have a second set of eyes take a look at their maiden resource estimates produced by independent QP’s?   For example, where I have been involved in mining mergers or takeovers, often one side will tend to rebuild the resource model using their own team.  They don’t put 100% confidence in the original resource model handed over to them.  “Just give me the database” they ask.
One downside to a third party review is the additional cost.  Another downside is that when one consultant reviews another consultant’s work there is a tendency to list numerous concerns that are not really that material, which then can muddle the conclusion of the review.  On the other hand, a third party review may identify serious interpretation or judgement issues that could be fatal if they impact on the viability of the resource.
If tailings dams are so important to require a second set of eyes, why not the resource estimate that is the foundation of the project?
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40. Integra Gold Rush Challenge – Watch for it at PDAC

Has everyone heard about the Gold Rush Challenge contest being held by Integra Gold Corp?  If not, I’d like to provide some information on it.  It’s another innovative event happening in the mining industry, following along on the footsteps of the Goldcorp Challenge held in 2001.

Gold Rush Challenge

The Integra Gold Rush Challenge is a contest whereby entrants are given access to a geological database and they are asked to prepare submissions presenting the best prospects for the next gold discovery on the Sigma/Lamaque properties.  Winners can get a share of the C$1 million prize.   Entrants will be given access to a database built from six terabytes of historical information that has been consolidated down to roughly 25 GB.
Integra Gold hopes that the contest will expand their access to quality people outside their company enabling their own in-house geological team to focus on other exploration projects.  Integra hope that they can get cutting-edge, innovative ideas not just from people in the mining industry but also from anyone proficient at analyzing big data.
From a recent press release update (Jan 6, 2016) here is what is currently happening.  It’s turning into quite the corporate event at PDAC.
In total 1,342 entrants from over 83 countries registered to compete in the challenge, resulting in 95 teams and over 100 proposals. Integra Gold is currently in the process of selecting the top 20 submissions which will be given to the Challenge’s technical judging panel.  The Challenge’s technical judging panel is made up of Neil Adshead, Andrew Brown, Benoît Dubé, James Franklin, David Rhys, and Brian Skanderberg.
By February 15th the judging panel will narrow the field down to the top five finalists.  These five teams will present to panel of industry leaders in a “shark-tank” style live finale at PDAC 2016.  Proceeds from the evening will go to a variety of Val-d’Or based charities.  The PDAC panel has been nominated and consists of Brent Cook, Chantal Gosselin, Rob McEwen, Sean Roosen, and Randy Smallwood.   It’s good to see the interest and participation from so many industry experts.
At PDAC there are always a lot of things to do, from visiting corporate booths, the tradeshow, gala award events, and hospitality suites.  Now the Integra Gold Rush Challenge brings another function to add to your PDAC agenda.
By the way, regarding the 2001 Goldcorp Challenge, it has been reported that it resulted in $CAD 575,000 being split amongst several teams and it having identified deposits were worth more than $6 billion and saved two to three years off the company’s exploration time.
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38. Claim Fees Paid for a Royalty Interest – Good Deal or Not?

I have read several articles about how the junior mining industry must innovate to stay relevant.    Innovation and changing with the times may be what is needed in this economic climate.
One company that is trying something new is Abitibi Royalties.  They are promoting a new way for them to acquire royalty interests in early stage properties by offering to fund the claim fees on behalf of the property owner in return for a royalty.
Their corporate website states that they will pay, for a specified period of time, the claim fees/taxes related to existing mineral properties or related to the staking of new mineral properties.   In return, Abitibi Royalties would be granted a net smelter royalty (“NSR”) on the property.  It may be a gamble for them but it’s not really that risky given that the low investment needed to pay claim fees, even if one considers having to make these payments over multiple years.
Abitibi are specifically targeting properties located near an operating mine located in the Americas. They are keeping jurisdiction risk to a minimum.   Abitibi state that their due diligence and decision-making process is fast, generally within 48 hours.  No waiting around here but likely this is possible due to the low investment required and often the lack of geological information to do actually do a due diligence on.
To give some recent examples, in a December 14, 2015 press release, Abitibi state that the intend to acquire a 2% NSR on two claims in Quebec and will pay approximately $11,700 and reimburse the claim owner approximately $13,750 in future exploration expenses. This cash will be used by the owner towards paying claim renewal fees and exploration work commitments due in 2016.   Upon completion of the transaction, these will be the ninth and tenth royalties acquired through the Abitibi Royalty Search.  For comparison, some of their other royalty acquisitions cost were in the range of $5,000 to $10,000 each (per year I assume).   I think that those NSR interests are being acquired quite cheaply.
The benefit to the property owner may be twofold; they may have no other funding options available and they are building a relationship with a group that will have an interest in helping the project move forward.  The downside is that they have now encumbered that property with a NSR royalty going forward.
The benefit to Abitibi Royalties is that they have acquired an early stage NSR royalty quite cheaply although there will be significant uncertainty about ever seeing any royalty payments from the project.   Abitibi may also have to continue to make ongoing payments to ensure the claims remain in good standing with the owner.
It’s good to see some degree of innovation at work here, although the method of promotion for the concept may be more innovative than the concept itself. Unfortunately these Abitibi cash injections investments are not enough to pay for much actual exploration on the property and this is where the further innovation is required, whether through crowd funding, private equity, or some other means.   I’m curious to see if other companies will follow the Abitibi royalty model but extend it to foreign and more risky properties.
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25. Junior Mining – Are People Still Investing?

The general consensus these days is that the junior mining sector is in a state of flux and decline.  I briefly touched on this in a previous article “12. Financings – It Helps to Have a Credible Path Forward”.   Currently it is difficult for junior miners to get funding and the stock prices of many are on a steady downward trend.   Some observers say this just a temporary phase and the industry will cycle out of it as it always has in the past.   I’m not fully convinced that this will be the case, although I am hoping so since my employment is in the mining industry.
I am reasonably confident that metal prices will improve over time, but I am not sure that alone will result in the junior mining sector invigorating.  I think there is a general paradigm shift as to how personal investments are being made and how the mining industry is being viewed by the public.  The following article has my personal opinions on the present and the future.
Mining companies have been in the media with stories of cost over-runs, mine shutdowns, fatalities, protests, and environmental incidents.   In addition, the junior mining sector has had a few notable scams and companies have gone bust with little to show to investors.  In some instances company management were over promoting  sub-optimal projects simply for the exercise of raising the stock price and cashing out.  Not all companies fell into this category, but enough to possibly give an unfavorable image of the investment side of the industry.  I think it may take more time for the industry to recover from the overall image being created by the events described above.  The implementation of sustainable mining practices is a real attempt by industry to rehabilitate its image, but is anyone out there listening?  Regarding that I have three general observations:
  1. Yield Investors: When many of us baby boomers were younger, in our 30’s to 40’s and working with a steady income, we were willing to speculate on the mining stocks hoping for the big payoff, and there were many payoffs in the past. Also there wasn’t much else to speculate on. Now those same baby boomer speculators are moving into early retirement and financial planners push them into fixed income and dividend paying investments with 2% to 4% yield.  The risk tolerance profile for many of these investors has been shifted from speculation & growth to income & capital retention. Retirement is not that far away and therefore I am unsure how many of these people will ever re-enter into the junior mining stocks if metal prices do improve.  The majority don’t pay any yield.   Some do; looking at the yield for Barrick (1.7%), Goldcorp (3.2%), and Yamana (1.6%), yield seeking investors would view their stock prices at their current levels as being adequately priced.   If their share prices rise, yield goes down and makes them less attractive to those yield investor.
  1. Where to speculate now? So where are the 30 to 40 year olds speculating today? Younger people today may still speculate with their free cash, but they are not hoping to be investors in the next Voisey’s Bay, Kidd Creek, or Hemlo.  They never even heard of them.  They are hoping to be investors in the next Apple, Google, or Facebook.  The dot com bubble of 1999–2000 seemed like the junior mining companies and their investors trying to jump into technology and it was mainly a bust at that time.  However these days several of the new breed of dot-com companies are getting huge share price jumps for speculators.  Is it a tech bubble – maybe so.   I don’t know whether the younger speculators will ever have interest in the junior mining sector since they never heard of it and there is so much more happening out there.  Anecdotally I have heard that retail investor attendance at the Toronto PDAC and the various road-shows has been declining over the last couple of years, which may confirm a general lack of interest in mining sector investment.
  2. The perception of mining: The mining and energy news shown in the media is not helping the industry, focusing mainly on the negative aspects. The resource business appears to be somewhat analogous to the meat industry. Everyone like their aisles of nicely packaged sushi, chicken, and beef at the grocery store but nobody wants to see how it actually gets to the store shelf.  Millennials also love their metallic gadgets and the energy used to power them up, but please don’t show how it actually gets from mine to smelter to store shelf– it’s quite upsetting to them.
An interesting group of companies are the mid tier producers that have operating mines and generate profits, but do not pay a dividend.  I will be curious to see how such companies shares will perform since they don’t satisfy the yield investor at this stage of their life nor may they satisfy the pure speculator looking for order of magnitude gains.
The larger mining companies will always have their investors like pension funds and mutual funds, however the junior miners may be a different story.  Possibly private equity and equity-based crowdfunding will be the long term solutions since they are a developing field.  I have heard that one geological consulting firm already has a plan in place to help crowdfunders with their 43-101 report even though they don’t yet have the money to pay for the report.   I also understand that Canada now has two private stock exchanges that allow private equity to change hands, which may facilitate more private equity involvement in the future.
My bottom line is the junior mining industry needs to have a self-examination with respect to what the future holds.  The changing population demographics and society’s urbanization may result in fundamental and permanent changes to how the financial side of the junior mining industry will function.  Just my opinion.
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