Analyzing a Junior Mineral
Company News
Dr. John-Mark Staude
President & CEO
June 17, 2009
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Canadian National Instrument 43-101
This sets out standards and guidelines for reporting. It helps the investor.
The Security Commission monitors for compliance.
Professional Geologist- Engineer Certification required on technical portion of news
releases.
There are three main categories on resources (Measured, Indicated, Inferred).
www.Sedar.com
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Value Chain
Four types of companies in Resource Sector
Competitive High Risk
Potentially High Value
Full Value
Value Opportunity
Few Competitors and Lower Risk
10
Relative Value
Speculators
Leave
Institutional
Investing
Begins
8
6
Speculative Stock
Ahead Of Known Value
Orphan
Period
4
2
1 - 2 Years
Discovery
~4 - 5 Years
Greenfields
Pre-Discovery
2 - 3 Years
Feasibility &
Permitting
2 Years
Development
1 Year
Start-Up
Depletion
0
1.
2.
Time
3.
4.
Low Probability, Long Time
“No one knows”
T
Highland Valley
?
Context- “make calls,
ask questions, due diligence”
5
Geologic Perspective
1. Company (size, business,
track record)
2. Project location, stage
3. Context, past results,
context, number of holes
4. Possible deposit type?
5. Length of intervals
6
Deposit types are key
Assay results in news releases- need to be interpreted in the
context of deposit types - (porphyry, epithermal, veins,
placer, not disclosed)
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Value vs Length of Intercepts
IN-SITU VALUES VS LENGTH OF DRILL HOLE
2500
In-situ value (US$ per tonne)
2250
2000
1750
1500
Young-Davidson (NGX)
1250
Campo Morado (FAN)
1000
40 Mile (FMM)
750
Double Eagle (NOT)
Gold Ridge (SGA)
500
Santa Ana (BCM)
Copper Canyon (CPY)
Moly Brook (TJS)
Kerr-Sulphurets (SEA)
250
0
0
200
400
600
800
Length (Metres)
All Data
Previous Highs
1000
Source: Research Capital, 2009
This Weeks High
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Drill results 4 news factors
1. Grades vs. Lengths vs. Depths
High grades are good but a) is there volume?, is it deep?, how
long of intervals?
Gross size of system – giants are very rare, trades are on results
and grades
2. Grades that investors should look for when reviewing stocks:
1% Cu, 2% Ni, 1 g/t Gold, PGM, 300 g/t Ag, 0.1% Mo, 0.1% U308
Think about the $ value of the rock. Current metal prices times
the concentration.
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Drill results 4 news factors
3. Drilling assays –Core has more data, earlier
stages and deposit type
4. Spacing of drilling results – see if there is a
map on the website, where are the new holes
relative to earlier results
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District play – scale potential
Metallurgy
The % metal is going to be extractable
Not just the sexy assay number in the P.R.
Minerals, elements = good and bad
Analysts help at this stage and into the engineering
stages
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Examples- on the news the stock jumps
Appleton (AEX),
Ventana (VEN),
Keegan (KGN),
Serengeti (SIR),
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Conclusions
1. Size potential, location, value-meters
2. Graphics – maps and sections on website to
see where the numbers are coming from
3. Deposit types
4. Stage of project (leverage, risk)
5. Ask experts, due diligence
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“John-Mark’s Geotutorial Video”
YouTube Video
- released July 1st, 2009
- field geology
- covers sampling methods
- better understand press releases
Email [email protected] to Alex Mason about questions
you’d like to see covered from the resource investor or
geologic field perspective?
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