Junior Gold Mining Stocks
Gold is a tier one financial instrument recognized throughout global economies as the ultimate store of value. Gold miners may be a solid investment as well, but it can be tricky figuring out which gold mining companies are best suited for your portfolio. At Proven & Probable, we help take the mystery out of investing in Canadian gold mining companies and gold miners around the globe.
Why invest in gold miners?
Gold bullion is viewed as a prudent, attractive hedge against economic crisis. A speculator may expand their exposure with gold in their portfolio with gold mining companies. Gold miners underpin the available gold supply by their exploration and production activities. For investors, mining companies offer speculators exposure to gold with liquidity.
Unfortunately, in most cases, the price gold miners receive for the precious metal they produce is determined by factors beyond the control of any one variable, such as All-In-Sustaining-Costs, Geopolitics, Permitting, and Key Personnel. This is why selecting gold mining stocks for your portfolio may seem overwhelming. Solution: Proven and Probable.
Junior mining companies
Among mining stocks that we report on are junior mining companies. A junior mining company is an exploration firm whose sole focus is to discover new deposits of gold. They are involved in the exploration and development phase, constantly searching for opportunities with the best chance to supply gold deposits worthy of production.
Unlike an end-to-end gold mining organization, a junior gold miner often does not have its own production operation. Junior miners can be seen more as a venture capital firm because they typically rely on venture capital for financing its activities.
While some ambiguity lies in the precise definition of junior miner, they are typically a low-cap stock, with market capitalization usually under $50 million U.S. dollars. They are often thinly traded, and in some cases may not trade on a given day.
Investing in junior mining
The good news is that if you’re able to find a junior gold miner before it “hits the mother lode,” you could be rewarded handsomely for your speculation. Many junior miners are penny stocks with potential for incredible upside.
Volatility associated with junior mining companies
While speculating in junior mining companies may be volatile as a rule, the rewards can be life and may even create multi-generational wealth. Most of them run on limited capital to strike it rich, and their success depends largely on a number of variables. Before you deploy your capital, we can sift through the wheat and chaff to provide answers to these variables.
In general, smaller gold mining companies success depends on their exploration results, jurisdiction, and key personnel, juxtaposed directly to immediate price moves of the underlying bullion. The gold price varies on the participation of Central Banks and Commercial Banks buying and selling gold, and citizens confidence in their respective currencies. Therefore, the gold price is less affected by the extraction of gold from gold mining companies and more affected by other mitigating factors.
Junior mining expertise
Contact us before you make your next gold or other precious metals purchase. Join our growing investing community today with a FREE subscription.