What should I look for in a Company?
Pouring Gold, Laying Concrete.
A Gold Company.
Having poured their first gold bar an explorer will photograph the gold bar in the hands of a celebrity (eg Minister of Mines) flanked by the CEO and Chairman. This is an announcement to the world that they have passed an extremely important milestone. They have become a producer!
Revenue will flow, giving options to management.
Pay Creditors, bed down debt or reinvest in plant.
An investor should be seeking value.
So now we can go to the Balance Sheet and look for things like Return on Investment (ROI), Cash in Bank, Net Assets.
An Industrial Company.
“Laying concrete” (a euphemism meaning they have built a factory) means an industrialist has reached the same milestone. An artist’s impression in a glossy magazine is not the same thing. A five year old can do that with crayons and paper. A fixed price contract is not a factory either. Look for a “big green shed”!
An Exploration Company.
A good address, leases in good locations. Look for Neighbours with credentials.
If possible, find assays for holes drilled, familiarise yourself with grades which are commercial.
See if there is infrastructure - transport, (road, rail), power, water!
Look for money in the bank, several million, enough to see them through a year’s exploration costs!
Capital raising wreaks havoc with the Share Price.
Remember, the earlier you get into an exploration company, the bigger the risk!
Just my opinion, DYOR