Canada is one of the most important countries for the mining industry. There alone, there are thousands of young companies, also known as junior explorers, that are literally vying for investors’ money. They all search for more or less large gold, silver or diamond deposits.
But experts estimate that only one in 300 of these companies will eventually manage to grow into a profitable mining company. Junior miners are in high demand among many investors. However, to ensure that the investment is worthwhile and involves as few risks as possible, investors should, as far as possible, only invest their money in those companies that are among the few winners among the small and usually quite young mining companies.
Penny-stock startups carry the greatest risk
Freshly founded start-ups naturally go about their work with great verve and enthusiasm and are often on the lookout for interested investors in order to increase their capital.
But really valuable gold, silver or diamond deposits are comparatively rare on earth. This is also the main reason that most hopeful junior miners never grow into profitable mining companies.
For investors, therefore, the newcomers to the mining business represent the greatest risk. Especially the investments in pennystocks, which are shares with a value of less than 1 Euro, are an adventure and a big risk.
Those who absolutely want to invest in companies at the pennystock level should do so only with caution and be aware of the great risk involved.
Junior miners who are already mining their first ounces
So-called junior miners who have already successfully taken the first steps towards becoming mining companies, however, can be a great opportunity for investors. They often already have a respectable market capitalization and have often already started to produce the first ounces of gold or silver.
But even if this step has not yet been taken, well-known major investors from the industry, for example, are a good sign that the start-up in question will be successful.
Skeena Resources – an example of a promising junior miner
One example of such a company is Canadian junior miner Skeena Resources. Although Skeena Resources was founded in 1979, it sometimes takes an extremely long time for a company to develop, especially in the mining industry.
The company has now come a relatively long way from being a pure exploration company to a producing mining company. Thus, Skeena Ressources has already started mining the first ounces of gold.
Another factor that keeps risk low for investors is the large investors Skeena Resources has already been able to attract. Deutsche Balaton, for example, holds a 15 percent stake in Skeena Ressources. Mining giant Barrick Gold also has a stake of around 10 percent in the Canadian junior miner.