Mining

How to Avoid Common Mistakes With Mining Stocks (Part 1: Team)

Published

3 years ago

February 27, 2020

Jeff Desjardins

For investors and speculators focused on growth, there is nothing more exciting than watching a stock go “on a run” for a big return.

Junior mining stocks, which are small publicly-traded companies that are aiming to make big discoveries, are well-known for being extremely high in both risk and reward.

But with a universe of thousands of available companies out there, how does an investor even begin to evaluate opportunities in this sector?

An Investor Checklist

We’ve partnered with Eclipse Gold Mining on an infographic series to show you how to avoid common mistakes when evaluating and investing in mining exploration stocks.

Part 1 of the series focuses on what to look for in a management team, including the types of characters you’ll want to avoid!

How to Avoid Common Mistakes With Mining Stocks (Part 1: Team)

If you’ve ever researched mining exploration stocks before, it doesn’t take long to realize that every company will talk about how “great” their team is.

Here’s a few steps to ensure that the team is actually great — and not filled with pretenders.

Management Team Checklist

Step 1: Avoid the Bad Characters
The mining stock universe can be filled with interesting and amusing characters, but many of them are not there to generate you a return. Here are the personas you should aim to avoid:

The Close-ologist
Funds new enterprises by staking land around a project that the market currently finds exciting.
The Trend Chaser
Jumps from industry to industry, or mineral to mineral, to chase the market’s flavor of the week.
The Pump n’ Dumper
Accumulates stock at insanely low prices, raises money, and then uses gray-area promotional strategies. Sells stock as soon as price is high enough to make a profit.
The Commodity Collector
Builds up an extensive list of ongoing assets and projects, thinking that this reduces risk. But really, it just reduces focus.
The Lifestyle Executive
Uses shareholder money almost exclusively to fund the salaries of management and other G&A expenses. Almost no actual work gets done.
The Optimistic Geologist
This is usually the pet project of a geologist, and the project may have some merit. However, time is the enemy of the Optimistic Geologist.

It’s also not impossible for CEOs to exhibit two or more of these personas at once, so beware.

Step 2: Traits You Want to See

Examine the management team and the board of directors, and dig deep into their history. Here’s what you want to actually see:

Wanted Traits	Description
A clear vision	Management has articulated a clear vision for the company and how it will create value for shareholders.
Winning track record	Management has made previous discoveries and has successfully exited companies in the past, taking shareholders along for the ride.
Skin in the game"	Simply put, management owns sufficient shares of the company (not just options) and has the incentive to succeed.
Transparency	Management has a history of integrity, being honest with shareholders in every circumstance.
Relevant expertise	Management has hired a team that has relevant experience, knowledge, and connections that can help advance the vision.
Business mindset	Management has a plan to generate ROI for shareholders and knows how to execute on that plan.

Step 3: Past Performance

Finally, look to see how the management team in question has handled situations in the past. The following questions will help you evaluate:

Have they been able to consistently fund projects in the past, even in bad markets, without overdiluting shareholders?
Is the team well-rounded? Do they have expertise covering multiple fields?
Did they do what they said they’d do, while sticking to timelines?
Does the team have connections to major mining companies, major banks, or other important institutions?
Has the team successfully exited from their previous ventures?

The De-risking Imperative

You can’t control everything that happens in the market.

But by successfully de-risking each management team with these criteria, you can better your odds at success in a high-risk, high-reward market.

This is part 1 of a five-part series on common mistakes made by investors when evaluating mining exploration stocks. Stay tuned for the upcoming parts in the series, covering other topics like jurisdiction, project quality, and more.

Related Topics:mining exploration junior mining mining stocks management team derisking pdac

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Energy

The Periodic Table of Endangered Elements

90 different elements form the building blocks for everything on Earth. Some are being used up, and soon could be endangered.

Creator Program

Published

1 month ago

August 31, 2022

Carmen Ang

The Periodic Table of Endangered Elements

The building blocks for everything on Earth are made from 90 different naturally occurring elements.

This visualization made by the European Chemical Society (EuChemS), shows a periodic table of these 90 different elements, highlighting which ones are in abundance and which ones are in serious threat as of 2021.

On the graphic, the area of each element relates to its number of atoms on a logarithmic scale. The color-coding shows whether there’s enough of each element, or whether the element is becoming scarce, based on current consumption levels.

Element	Full Name	Status
Ac	Actinium	Plentiful supply
Ag	Silver	Serious threat
AI	Aluminum	Plentiful supply
Ar	Argon	Plentiful supply
As	Arsenic	Serious threat
At	Astatine	Plentiful supply
Au	Gold	Limited availability
B	Boron	Limited availability
Ba	Barium	Plentiful supply
Be	Beryllium	Plentiful supply
Bi	Bismuth	Limited availability
Br	Bromine	Plentiful supply
C	Carbon	Plentiful supply / serious threat
Ca	Calcium	Plentiful supply
Cd	Cadmium	Rising threat
Ce	Cerium	Plentiful supply
CI	Chlorine	Plentiful supply
Co	Cobalt	Rising threat
Cr	Chromium	Rising threat
Cs	Cesium	Plentiful supply
Cu	Copper	Rising threat
Dy	Dysprosium	Rising threat
Er	Erbium	Plentiful supply
Eu	Europium	Plentiful supply
F	Flourine	Plentiful supply
Fe	Iron	Plentiful supply
Fr	Francium	Plentiful supply
Ga	Gallium	Serious threat
Gd	Gadolinium	Plentiful supply
Ge	Germanium	Serious threat
H	Hydrogen	Plentiful supply
He	Helium	Serious threat
Hf	Hafnium	Serious threat
Hg	Mercury	Limited availability
Ho	Holmium	Plentiful supply
I	Iodine	Plentiful supply
In	Indium	Serious threat
Ir	Iridium	Rising threat
K	Potassium	Plentiful supply
Kr	Krypton	Plentiful supply
La	Lanthanum	Plentiful supply
Li	Lithium	Limited availability
Lu	Lutetium	Plentiful supply
Mg	Magnesium	Limited availability
Mn	Manganese	Limited availability
Mo	Molybdenum	Limited availability
N	Nitrogen	Plentiful supply
Na	Sodium	Plentiful supply
Nb	Niobium	Limited availability
Nd	Neodymium	Limited availability
Ne	Neon	Plentify supply
Ni	Nickel	Limited availability
O	Oxygen	Plentiful supply
Os	Osmium	Rising threat
P	Phosphorus	Limited availability
Pa	Protactinium	Plentiful supply
Pb	Lead	Limited availability
Pd	Palladium	Rising threat
Po	Polonium	Plentiful supply
Pr	Praseodymium	Plentiful supply
Pt	Platinum	Rising threat
Ra	Radium	Plentiful supply
Rb	Rubidium	Plentiful supply
Re	Rhenium	Plentiful supply
Rh	Rhodium	Rising threat
Rn	Radon	Plentify supply
Ru	Ruthenium	Rising threat
Sb	Antimony	Limited availability
Sc	Scandium	Limited availability
Se	Selenium	Limited availability
Si	Silicon	Plentiful supply
S	Sulfur	Plentiful supply
Sm	Samarium	Plentiful supply
Sn	Tin	Limited availability
Sr	Strontium	Serious threat
Ta	Tantalum	Serious threat
Tb	Terbium	Plentiful supply
Te	Tellurium	Serious threat
Ti	Titanium	Plentiful supply
TI	Thalium	Limited availability
Tm	Thulium	Plentiful supply
V	Vanadium	Limited availability
W	Tungsten	Limited availability
Xe	Xenon	Plentiful supply
Y	Yttrium	Serious threat
Yb	Ytterbium	Plentiful supply
Zn	Zinc	Serious threat
Zr	Zirconium	Limited availability
Th	Thorium	Plentiful supply
U	Uranium	Rising threat

While these elements don’t technically run out and instead transform (except for helium, which rises and escapes from Earth’s atmosphere), some are being used up exceptionally fast, to the point where they may soon become extremely scarce.

One element worth pointing out on the graphic is carbon, which is three different colors: green, red, and dark gray.

Green, because carbon is in abundance (to a fault) in the form of carbon dioxide
Red, because it will soon cause a number of cataphoric problems if consumption habits don’t change
Gray because carbon-based fuels often come from conflict countries

For more elements-related content, check out our channel dedicated to raw materials and the megatrends that drive them, VC Elements.

Mining

Mapped: The 10 Largest Gold Mines in the World, by Production

Gold mining companies produced over 3,500 tonnes of gold in 2021. Where in the world are the largest gold mines?

Published

5 months ago

May 19, 2022

Niccolo Conte

The 10 Largest Gold Mines in the World, by Production

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

Gold mining is a global business, with hundreds of mining companies digging for the precious metal in dozens of countries.

But where exactly are the largest gold mines in the world?

The above infographic uses data compiled from S&P Global Market Intelligence and company reports to map the top 10 gold-producing mines in 2021.

Editor’s Note: The article uses publicly available global production data from the World Gold Council to calculate the production share of each mine. The percentages slightly differ from those calculated by S&P.

The Top Gold Mines in 2021

The 10 largest gold mines are located across nine different countries in North America, Oceania, Africa, and Asia.

Together, they accounted for around 13 million ounces or 12% of global gold production in 2021.

Rank	Mine	Location	Production (ounces)	% of global production
#1	Nevada Gold Mines	🇺🇸 U.S.	3,311,000	2.9%
#2	Muruntau	🇺🇿 Uzbekistan	2,990,020	2.6%
#3	Grasberg	🇮🇩 Indonesia	1,370,000	1.2%
#4	Olimpiada	🇷🇺 Russia	1,184,068	1.0%
#5	Pueblo Viejo	🇩🇴 Dominican Republic	814,000	0.7%
#6	Kibali	🇨🇩 Democratic Republic of the Congo	812,000	0.7%
#7	Cadia	🇦🇺 Australia	764,895	0.7%
#8	Lihir	🇵🇬 Papua New Guinea	737,082	0.6%
#9	Canadian Malartic	🇨🇦 Canada	714,784	0.6%
#10	Boddington	🇦🇺 Australia	696,000	0.6%
N/A	Total	N/A	13,393,849	11.7%

Share of global gold production is based on 3,561 tonnes (114.5 million troy ounces) of 2021 production as per the World Gold Council.

In 2019, the world’s two largest gold miners—Barrick Gold and Newmont Corporation—announced a historic joint venture combining their operations in Nevada. The resulting joint corporation, Nevada Gold Mines, is now the world’s largest gold mining complex with six mines churning out over 3.3 million ounces annually.

Uzbekistan’s state-owned Muruntau mine, one of the world’s deepest open-pit operations, produced just under 3 million ounces, making it the second-largest gold mine. Muruntau represents over 80% of Uzbekistan’s overall gold production.

Only two other mines—Grasberg and Olimpiada—produced more than 1 million ounces of gold in 2021. Grasberg is not only the third-largest gold mine but also one of the largest copper mines in the world. Olimpiada, owned by Russian gold mining giant Polyus, holds around 26 million ounces of gold reserves.

Polyus was also recently crowned the biggest miner in terms of gold reserves globally, holding over 104 million ounces of proven and probable gold between all deposits.

How Profitable is Gold Mining?

The price of gold is up by around 50% since 2016, and it’s hovering near the all-time high of $2,000/oz.

That’s good news for gold miners, who achieved record-high profit margins in 2020. For every ounce of gold produced in 2020, gold miners pocketed $828 on average, significantly higher than the previous high of $666/oz set in 2011.

With inflation rates hitting decade-highs in several countries, gold mining could be a sector to watch, especially given gold’s status as a traditional inflation hedge.