Junior Mining Investor Book Review

Junior Mining Investor, it's not for the uninformed or faint-of-heart
Junior Mining Investor, it's not for the uninformed or faint-of-heart

Junior Mining Investor: 14 Natural Resource Experts Show You How to Invest Profitably in Emerging Gold, Silver, Platinum, Base Metals, and Uranium Mining and Exploration Stocks
By Kevin Corcoran
Corcoran Publishing 2007
202 pages. $22.95

The term ‘junior’ comes from the Latin word juvenior, meaning ‘young.’ And as used in the title of Kevin Corcoran’s book – Junior Mining Investor – it refers to “exploration and developmental mining companies.” These ‘junior’ companies are smaller than the so-called mining majors. The stocks of these junior companies are “too small and lack the trading volume big funds need to invest in. As a result, investors and speculators can get in and out without much difficulty and before the ‘general’ public catches on.”

Getting in and getting out, while making a profit is what Junior Mining Investor is all about.

Junior Mining Investor is not a cohesive text written by a single author. Rather it is a series of interrelated articles, which were written by 14 different mining-industry experts. Some of the experts write newsletters, others are hedge-fund managers, geologists, and stock analysts. Which means the reader is provided with a good overview of various topics directly related to mining investments.

And as Corcoran states in his introduction, junior mining stocks “are very volatile and with the opportunity to make outsized returns, comes the real possibility of losing some or all of your investment. For this reason, this sector should only be approached with speculative funds – not money you can’t afford to lose.”

In other words, although Junior Mining Investor targets individuals who want to enter the arena of investing in mining stocks, it is not meant for those who are new to the world of investing.

The first chapter, entitled ‘So You Think You Can Speculate,’ gets right to the point. Written by Dr. Russell McDougal, it spells out the realities of speculative investing. Speculative investing requires the right kind of temperament – one that loves risk – along with discipline, and knowledge. McDougal likens it to “chess, bridge and golf. It is an acquired skill and it can be a vocation or an avocation.”

Chapters 2 and 3, provide basic information for selecting silver and gold mining stocks. While on the contrary, chapter 4 gets down to the nitty-gritty. It was written by Kenneth Gerbino, who sets out ‘12 Guidelines for Buying Gold Mining Stocks.’ Gerbino gives common sense rules for winnowing through all the data available on mining stocks. His guidelines will aid investors in narrowing down their list of prospective stocks.

In chapter 6, Kevin Bambrough and Jean Francois Tardif offer ten tips for picking a uranium stock. And although the chapter is short, it is succinct. For example, in their first tip, the authors state that “one of the best indicators of a project’s potential success could be past ownership.” And they give a brief but important explanation of how infrastructure impacts a prospective uranium mine’s value. Which makes this chapter a ‘must read’ for potential investors.

Adrian Day wrote chapter 7, in which he discusses how to minimize risk in gold stocks. He presents two interesting ‘case studies.’ One for Altius and the other for Virginia Mines. Both studies provide a template for investors to apply to other mining stocks. By following Day’s prescription, investors can determine the pros and cons of other properties, and thus make informed decisions.

In chapter 8, Dr. Russell McDougal starts off by asking a pertinent question: “does the perfect resource exploration company actually exist?” His answer is, yes. He then goes on to talk about the three stages of resource explorers: start ups, exploration progress, and discovery. This information makes it possible for investors “to tap into the next nano-cap companies that will present a risk/reward ration that is difficult … to pass up.”

‘How Much Is That’ is the title of Chapter 9. Written by Brian Fagan, it presents – in great detail – how to translate the terms and numbers “used to describe mineral projects into a dollar value and equivalent stock price.” Patience and determination are necessary to work through the article, because it is quite technical. However, serious investors will find this information worthwhile.

One of the most interesting articles in Junior Mining Investor is chapter 15, wherein Dr. Richard S. Appel discusses what to look for in a mining company’s management team. Stock analysts always advise looking for companies with strong management, but no one ever explains precisely what that means. As Dr. Appel points out, “the single most important factor that can make or break even the best company is its ability to raise working capital.” There are two other vital factors, too. And Dr. Appel clarifies what they are. This is a great chapter!

The subsequent chapters discuss such varied topics as platinum investments, market capitalization, warrants, leveraging silver stocks, learning from mistakes, and mining ETFs. And each chapter – some short and some long – furnishes excellent information for investors. Admittedly, the chapters jump willy-nilly from subject to subject, but for the most part Kevin Corcoran has done an admirable job of maintaining the book’s integrity. Junior Mining Investor veers off course only occasionally. And even then, the side-trips are useful, adding to the reader’s store of knowledge. Knowledge will be beneficial in the future.

After reading Junior Mining Investor, it becomes clear that successful investing in mining properties demands not only money and a willingness to take a risk, but also tremendous study and erudition. It is not for the uninformed or faint-of-heart. Corcoran’s book goes a long way toward taking up the slack. For it provides factual and utilitarian material that any investor needs.

4-star On the Rate-O-Meter, which ranges from 1 star (superficial) to 5 stars (pertinent), Junior Mining Investor qualifies for 4 stars.