These 5 concepts, crucial for any mining & metals investor, took me years to learn and master.
I'll teach them to you in 15 minutes:
1/6 Once a mining company reports a resource, things shift.
Basically, it all becomes more 'real'.
Work and investment bump up certainty.
And resources are great! But reserves are better…
(PS: you'll typically pay more for reserves)
2/6 Geologists go deep into deposit types because let's face it, they love geology.
Investors don't need as much detail.
But we do need to know whether a gold deposit we are researching is epithermal or sedimentary.
To start, you need a general understanding of it all
3/6 Once a deposit has resources (inferred and higher) the race to put a value on the whole thing speeds up.
Enter the 'economic studies'.
Will give markets a valuation and interact with resources/reserves.
Each type has a different timeline, effect on the company and costs.
4/6 Juniors are (almost) always drilling their projects.
(and we want them to!)
Each type of drilling has a different goal, cost and objective.
Differentiating will help you know what to expect from the results and infer what could be coming.
5/6 And finally, if you're still here, let's talk about the sector's life cycle.
You can enter for a lifetime or a season.
But to do so in the most effective way, you want to know where in the cycle your investment is.
This will help align with your expectations.
6/6 That's a wrap!
Getting clear on these basic concepts will help you invest more confidently. Certainly helped me!
Resources or reserves?
Which deposit type is it?
Any economic studies?
Drilling techniques used?
Where in the lifecycle?
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