The golden rule of investing in a junior mining company is to ask and satisfactorily answer the question: who owns & runs the company? In reality, investors go for juniors because their story is simple; the time-line to profit short; and there is something exotic & mysterious about their ore body.
Michael Collins and I became friends when I shared an office with him. He still lets me come back to his office to share a free cup of coffee that otherwise costs me fifty cent in our parsimonious office. We also chat about opera—for his wife designs opera costumes and sets. In the time I have known Mike, we have both grown five years older; but he still retains the youthful good looks and innocent credibility of the young geologist he was when we first me.
This morning he bounced into my office in excitement. He could hardly wait to tell me that his company, Argus Metal Corp has just received from the Guyana Geology and Mines Commission a license to explore for uranium, gold, and precious elements on the one by ten kilometer Kaituma uranium target.
I am glad for him. For too long now, I have heard of his travails to get this permit in an area he believes in. Now I can encourage him to drill fast, deep, and wide. For I want him to prove that ore body so that I can go to Guyana to select the site for their tailings facility. That will be an exotic trip.
This what Michael Collins says in the press release he gave me:
The Kaituma Project is one of the few undrilled global uranium exploration targets with the potential to have a significant impact on uranium markets and is located one-half kilometer from a deep water shipping port, an active paved airstrip and is traversed by all-weather roads and rail guide. With all of the ground work already in place and historic data in hand, the project is drill-ready and will be tested as soon as possible.
Without going into detail, it appears the initial work was done by Cogema and BHP is somewhere in the background—best see his website for details that would bog a blog down.
By way of full disclosure, I made Michael repay me for sharing his excitement. I made him sit down and go through the slides I am preparing for the upcoming webcast I am to make on mining investment risks. He contributed much insight into investing in junior mining companies, and so he should, for he has successfully run one for many years.
I cannot say how much more gold and uranium we need in the longer term. These things take a long time to bring to production, so he might as well start now. Afterall that is the fiduciary duty of the junior mining company: go where angels fear to tread; seek out the future; make it real today for tomorrow; and give us a chance to vicariously thrill to far-away, exciting, and exotic projects and travel.
I will go often now to his office for free coffee and updates on this story; a story of a junior mining company with courage and charm looking to make the impossible dream happen.
PS. I write this because I like Mike; my only remuneration is the free coffee; and please do not interpret this as investment advice—that is not what my blog is about.