Having short listed a number of prospective candidates, the next step is to take a closer look at the individual companies and determine which ones have the greatest potential. Here at The Global Speculator, we have developed a list of criteria that we deem important when considering junior precious metals companies to speculate in:
- Significant Insider Ownership of shares
- Number of Shares Outstanding (fewer the better)
- Options/Warrants issued (fewer the better)
- Cash position (comfortable levels for activites)
- Debt to Equity (manageable levels)
- Enterprise value per unit of primary metal (reserves and resources)
- Low Cash Costs.
- Project diversity
- Various key performance indicators
- Political Risk
- Hedging Commitments (preferably none)
Experience has taught us that by adhering to this checklist and by choosing companies that outperform in a majority of the criteria, you can potentially swing the probabilities of profitability substantially in your favor. Compiling this information also provides you with a better overall understanding of the companies you are considering. Please read the following article for a more detailed explanation: Mining Company Fundamentals 101.
The biggest hurdle in being able to compare all this information is having the time and the resources to be able to put it all together for a meaningful number of companies. Your best bet is to find a service that will do the grunt work for you at a reasonable price. GoldNerds professional products will enable you to access the data above so that you can spend your valuable time comparing and analyzing companies rather than compiling the information. What's more it is updated for you every 2-3 weeks so that you have access to the latest information. Changes from issue to issue are highlighted so you can establish what has changed.