RE: Take Your Pick7 Nov 2025 14:54
In a sector where there is a repetitive sense of de-ja-vu about the recurring issues that characterise most junior explorers, there is rarely any need to say anything new. As such I'd like to re-share something written a while ago about another company.
Some might cynically say that a junior exploration company's board of directors are there to sustain their own lifestyle at the expense of shareholders. Those directors might say they are there to sustain market interest so they can keep raising the funds needed to survive. This isn't easy in a sector noted for delays, over-spends, dilution and failure; one where even those projects that succeed can seemingly drift in limbo for years.
Junior explorers fight to attract attention by promoting "future potential" where, without lying to the markets, management try to distract from set-backs and impatient market participants who sell up. They repeatedly hint at even distant links to topical ideas or remote chances of near term good news. All this is presented using caveats and words like "hope", "target", "prospective" or "estimate" that provide wriggle room should they later be accused of promoting unrealistic expectations. In other words, when championing reasons to be optimistic, directors may be legally forbidden from leading us up the garden path, but they can step to one side whilst informally encouraging the excitable to run ahead on their own.
I've seen many private investors accuse the management of junior explorers of incompetence, dishonesty, or of deliberately running down their assets so they can be taken private "on the cheap" by major creditors. Such critics are often emotional individuals who, in the absence of hard facts and full numerical data, rushed to buy the herd's enthusiasm for a good story. Then without waiting to either prove or disprove that story, they make losses selling in to the herd's impatience. As such nobody should allow a company's PR, rumours, or the emotions of other investors to feed their own confirmation bias.
Speculators needs to recognise how often explorer's PR translates as "...we still can't confirm any new facts, but please don't lose interest in our latest narrative". Regardless, if your purchases have helped minimise the share's price decline then the marketing has succeeded.
You need to recognise how rarely management teams achieve their stated goals in this slow moving and volatile sector. To judge if they have a track record of success that inspires, or if you are merely hoping that "this time will be different", you need to analyse management's prior communications to separate verifiable and actionable accomplishments from distracting superlatives and promotional aspirations. Put another way, the uncertainties that determine the balance of possible reward against probable risk are best understood before spending your money so as not to be left angry and surprised should your hopes not be quickly fulfilled.
Sign In
Follow the stocks
