Life-Cycle Of A Junior Mining Explorer

Here's what google images brings up. Click thru to get to the original pages explain the graphs.  

 

In the past I have made quite good money in that startup phase, especially the one-year run up to production. Where do you like to get involved?

Also, I find that these graphs are way too smooth leaving out the following important common downward jags:

• Explorer/mine builder gets financing (usually below market price and with "warrants"): This drags the stock down to that price and holds it there will the buyers of the stock sell the stock off while keeping the "upside" in the form of the warrants. 
• Startup disappointments: Mines nearly always take longer than "expected" to actually get started and there are frequently several months of "unexpectedly" bad mining results. This can go on for years (e.g. Minefinders and Gammon Gold and Golden Start Resources). This is where miners without extra cash in the bank and especially those with marginal mining economics get hurt badly. You can make a good bit of coin if you are smart enough to guess when the kinks will get worked out for these situations. 

There's another point I'm quite interested in. What frequently happens in the weeks following the first really good hole announcement? I think there's a drop off in price until the next hole comes (which better be good). There are probably opportunities to buy in (with the right timing) after that first really good hole. 

I'd be glad to have a friendly discussion with you if you have thoughts (or mining stock names) you'd like to apply to these charts. 

MontyHigh, www.worldofwallstreet.us

Comments

[Justin P. yagoobian]

I think this is an accurate description of a life cycle of a mine. As a shareholder in Brigus Gold, I think we are in the early phases of the production peak for the Black Fox project and I anticipate even more upside with a decision due in June for the Goldfields project in Saskatchewan.