Raising Capital for a Junior


You don’t have to be rich or work for a large mining company to find a mine. But there is one essential ingredient for any successful mine exploration and development program — access to enough funding to see the program through to completion.

Mining is a business like any other — with one exception: the assets of a mine are non-renewable. That means that during the course of production, the primary asset that gives a mine its being is consumed. Because the assets are non-renew; and disappear with time, mining is a risky business. The risks are greatest at the beginning of the life the enterprise, when geological information is sparse. Consequently, for the investor, this is the time when the greatest gains (and loss‘s) can be made.

To see how it works, we’ll follow the financial history of a hypothetical exploration/development company called ABC Mines Ltd. Beginning with the pre-discovery phase, we’ll follow it to the point where it matures to become a successful commercial mining operation. As ABC Mines evolves, it will look for financing in different places. .