Mining
How to Avoid Common Mistakes With Mining Stocks (Part 1: Team)
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!
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.
Mining
Silver Through the Ages: The Uses of Silver Over Time
The uses of silver span various industries, from renewable energy to jewelry. See how the uses of silver have evolved in this infographic.
Silver is one of the most versatile metals on Earth, with a unique combination of uses both as a precious and industrial metal.
Today, silver’s uses span many modern technologies, including solar panels, electric vehicles, and 5G devices. However, the uses of silver in currency, medicine, art, and jewelry have helped advance civilization, trade, and technology for thousands of years.
The Uses of Silver Over Time
The below infographic from Blackrock Silver takes us on a journey of silver’s uses through time, from the past to the future.
3,000 BC – The Middle Ages
The earliest accounts of silver can be traced to 3,000 BC in modern-day Turkey, where its mining spurred trade in the ancient Aegean and Mediterranean seas. Traders and merchants would use hacksilver—rough-cut pieces of silver—as a medium of exchange for goods and services.
Around 1,200 BC, the Ancient Greeks began refining and minting silver coins from the rich deposits found in the mines of Laurion just outside Athens. By 100 BC, modern-day Spain became the center of silver mining for the Roman Empire while silver bullion traveled along the Asian spice trade routes. By the late 1400s, Spain brought its affinity for silver to the New World where it uncovered the largest deposits of silver in history in the dusty hills of Bolivia.
Besides the uses of silver in commerce, people also recognized silver’s ability to fight bacteria. For instance, wine and food containers were often made out of silver to prevent spoilage. In addition, during breakouts of the Bubonic plague in medieval and renaissance Europe, people ate and drank with silver utensils to protect themselves from disease.
The 1800s – 2000s
New medicinal uses of silver came to light in the 19th and 20th centuries. Surgeons stitched post-operative wounds with silver sutures to reduce inflammation. In the early 1900s, doctors prescribed silver nitrate eyedrops to prevent conjunctivitis in newborn babies. Furthermore, in the 1960s, NASA developed a water purifier that dispensed silver ions to kill bacteria and purify water on its spacecraft.
The Industrial Revolution drove the onset of silver’s industrial applications. Thanks to its high light sensitivity and reflectivity, it became a key ingredient in photographic films, windows, and mirrors. Even today, skyscraper windows are often coated with silver to reflect sunlight and keep interior spaces cool.
The 2000s – Present
The uses of silver have come a long way since hacksilver and utensils, evolving with time and technology.
Silver is the most electrically conductive metal, making it a natural choice for electronic devices. Almost every electronic device with a switch or button contains silver, from smartphones to electric vehicles. Solar panels also utilize silver as a conductive layer in photovoltaic cells to transport and store electricity efficiently.
In addition, it has several medicinal applications that range from treating burn wounds and ulcers to eliminating bacteria in air conditioning systems and clothes.
Silver for the Future
Silver has always been useful to industries and technologies due to its unique properties, from its antibacterial nature to high electrical conductivity. Today, silver is critical for the next generation of renewable energy technologies.
For every age, silver proves its value.
Mining
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