Understanding Junior Miners

This one-off pdf publication has drawn on the technical expertise of a ‘panel’ of specialists with considerable experience in the mining sector.
IT AIMS TO HELP:

Investors chart the waters of interrogating and analysing early stage and development juniors
Bankers lending to junior miners developing new projects
Directors of junior mining companies when faced with greenfield project proposals
Students undertaking academic courses that involve understanding mining projects and junior companies
Government officials in countries where the public sector is seeking to become more actively involved in its resources sector
Managers in junior mining companies who may have joined with one set of specific skills, and are required to get a broader perspective as they move up to more senior executive positions
NGO’s seeking to understand more about mining projects affecting local communities

Examining Core

Synopsis

AIM and Junior Miners

A.1 INTRODUCTION – Style and content

Preparing core for Assaying in remote region

By their very nature, equity and commodities markets are moving rapidly all the time. The spread of resource companies on AIM is constantly expanding in terms of geographical location of projects and types of commodity being mined. Against that background, the aim of this book is to provide the generic information that should help investors to do their own analysis of early stage and development mining companies at any point in the cycle. Much of the text thus aims to have a significantly longer shelf life than an average company-specific broker’s note.

The book in no way seeks to be exhaustive in the areas of junior mining that it covers in depth – rather, it is in some senses very selective. The key focus is on those areas that appear to be generally less well covered by current broking analysis or independent consultants already, because of the specialist technical knowledge required. Consequently, those topics that have been excluded (or treated in less depth) are not considered less important – rather, they appear to be reasonably well covered by analysts or independent consultants at this time. The points below summarise the primary thrust of the content.

What the Ebook includes

In commodity terms, a focus on gold, Platinum group Elements (PgE) and diamonds, as they dominate the AIM mining sector

Discussion of geology, exploration and measurement of reserves/resources to help interrogate early stage junior miners

Relatively detailed discussion of the challenges in bringing a deposit into operational phase, as more risk can lie in this element of a junior mining share than generic political risk

Attempts to simplify and explain excessively technical geological and mining terminology where possible

Coverage of various valuation approaches

And what is NOT included

Base metals, coal and industrial minerals, despite some presence of these across a number of companies

In-depth analysis of the issues facing fully producing companies on AIM as these are covered in some depth by broking houses in London

Little analysis of how the various issues raised in the document might differ due to political risk factors and resource nationalism in specific regions

Complete elimination of technical terms, as investors need to recognise and understand many key bits of terminology in order to interrogate company management

The one-stop ‘holy grail’ of valuation in an environment where data on resources, reserves, operating costs and even processing technologies are still uncertain

No detailed analysis of individual companies

Essential road map for travelling

A.2 AIM MINING COMPANIES SNAPSHOT

What drives AIM mining companies’ share price performance?
Potential attraction of juniors to majors
What links with majors can mean for juniors

Section B

What are the assets the company owns?

B.1 RESERVES AND RESOURCES
Different levels of asset content reporting
Reporting and responsibility

B.2 NATURE AND CHARACTERISTICS OFTHE MINERAL ASSETS
Regional Prospectivity
The Platinum group Elements
Diamonds
Gold

B.3 EXPLORATION METHODS AND EVALUATION TECHNIQUES
Criteria for an effective geoscientific evaluation
Sampling methodologies, data and integrity
Reporting of exploration results
Estimation and reporting of mineral resources
A final checklist: key questions for determining the effectiveness of a mineral resource estimation
Diamond exploration – different challenges
Improvements in exploration technology

Fiona and Cu in rock

Section C

Economic exploitation of the assets

C.1 DEVELOPING THE ASSET INTO A PRODUCING MINE
Do they actually own the assets?
Will the assets deliver an economic return?
Developing the assets
Open pits
Underground operations
Processing/Metallurgy
Balancing between grade, throughput and recovery levels in achieving an economic return
Issue specific to PgE juniors, where ‘downstream is more important’
Logistics issues
Management record in developing projects to production stage vs. finding /purchasing property rights

C.2 ENVIRONMENTAL ISSUES
Prediction, prevention and treatment
Environmental assessment procedure
Integrated environmental assessment (IEM)
Social Impact Assessment (SIA)

Section D

Financial and valuation issues

D.1 FINANCIAL ISSUES
The cost equation
What items are included in ‘cash costs’?
What other cost considerations should be reviewed?
Revenues
Spot of long term prices?

D.2 VALUATION ISSUES AND APPROACHES
Net asset value (NAV)
Ore in the ground
Net present value (NPV)
Discount rates
Probability weightings
valuation approaches by potential industry buyers
Producing companies
Managements and Board Issues

Understanding Junior Miners

Printable Ebook Format only £30

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