The Gold price has been breaking records all year.
The parabolic rise in central bank and investment demand is driving the Gold Bull Market and it will likely continue well into 2013 and could push the Gold price to 3000 oz and higher.
That means that the up-trend is firmly established, and that now is the time to start seriously researching and buying quality junior gold stocks that have been lagging the bullion price.
The Big Q: Red, how do I pick good Junior Gold stocks?
The Big A: The best place to start research on a company is its website. There, you will usually find most of the information that you need. But often you will not be able to find all of the detailed information. And that is when you need to call the Company's investment banker and/or its investor relations department.
Investor relations for Junior Gold companies are often 1 or 2 In-House employees of the Company, contracted 3rd party specialists, or sometimes a senior member of the management team. Oh and sometimes there is no investor relations at all, and investor relations can sometimes be just the person who answers the phone.
Who ever you reach they should be able to give you the up-to-date information, or refer you to the source of information that you may request.
Below is a list of sample questions, as follows,
1. How did the Company get started? 2. What are the Company's near-term, mid-term, and long-term goals? 3. How much experience does the management, board of directors, and technical team have in achieving the Company's goals? Are there past successes? 4. What is the plan to market and promote the company? Does the company plan to go on Road Shows? 5. Is management experienced in promotion? Projects 1. How many gold projects does the Company have? Are all of the Gold projects considered assets? 2. Where are they located? Are they located in geo-politically safe regions? Are they easily accessible? Is there a labor force nearby? Is there easy access to power and water? 3. What stage is each property in: grassroots, exploration, development, or production? 4. For grassroots stage projects, why does the Company wish to pursue exploration? Has there been any historic evidence of Gold on or near the projects? What does the Company have planned for the future of its grassroots projects? 5. For exploration stage projects, what kind of exploration progress have been made so far? How much has the Company drilled? What are the results? What kind of exploration is planned for the future? Is there currently a resource estimate? Will there be one in the future and when? 6. For development stage projects, what is the status of development? When will the project become a Gold producing mine? 7. For production stage projects, how much Gold does the mine produce? What are the future production and revenue expectations? What is the life of the mine? 8. What is the resource or reserve status of each property? 9. What, if any, royalties are or will be due? Capital 1. What is the Company's cash flow, if any? 2. What is the Company's cash position? 3. Does the Company have any debt? How much and what kind of debt does the Company have? 4. Will the Company have to raise new capital for future projects? How much money will the Company need to raise? How much experience does management have in raising new capital? 5. How much capital will the Company need to reach its 12-month goals? How and where will they get the money? 6. What is the Company's monthly cash burn rate? Are they being responsible spending it? 7. How many shares of the Company's stock are issued and outstanding? 8. How many shares of the Company's stock are there fully diluted? At what price are the warrants and options set if any?
The above Q's are not stock specific, so they are to used as a Guideline for your inquiry.
Also, this is not a complete list, but is enough to get you started.
If you like a Company's answers to the questions above, then the Company should be considered as a position in your Junior Gold stock portfolio.
www.livetradingnews.com profiles both senior and junior Gold miners regularly and I publish a report on Gold, Silver and Crude Oil twice weekly for a look at the overall fundamentals and technical's.
All the best,
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.