THE GLOBEX MINING MODEL – PROJECT GENERATOR SUB-CATEGORY – PART 2

THE GLOBEX MINING MODEL – PROJECT GENERATOR SUB-CATEGORY – PART 2

As our quest to identify ‘true Project Generators’ continues, the field narrows surprisingly quickly. We have sifted through and eliminated many companies that were thought might meet the test. We have managed to identify one other ‘true Project Generator’, an Australian based company. We will save that company’s story for the time being so we can deal with some of the basics about what makes such companies unique amongst their peers.

If one goes into the MD&A of any publically listed company you will soon find how the company defines its purpose and what it seeks to achieve. Without exception these days, most every listed junior mining company presents itself as on that’s going to acquire, explore, develop, and “take into production” it’s very own and highly unique Nothing Like It On The Planet Mining Project.

We who are very experienced in this business know that the odds of this end-play actually happening exactly as wished for is a real long shot -  very rare indeed.

There are a few things one needs to understand at this point. The mining sector has always been and will continue to be divided into a number of contributing sub-categories ranging from prospecting through to the actual production. Historically, those who broke into the industry and worked their way through the sub-categories tended to find their niche in one of the sub-categories and build their careers or companies within that area of expertise. That would mean that one would become or be in the business as a prospector, staker, Project Generator, Project Explorer, Project Developer and Mineral Producer (commonly referred to as a Mining Company and so on.

Note that ‘Project Generator' is one of these early stage sub-categories. This process has been in existence since the beginning, and will likely be in existence until the end.

Yes, every once in while some sole and his associate(s) got lucky and managed to take an exploration project from the acquisition stage right through to production. However that in itself is truly an anomaly.

The skill sets involving experience, education, knowledge, financing, management and strategic capabilities are quite different for each sub-category and to achieve success in each of the sub-categories in sequence would be a rarity.

Historically those entering the mining sector were well aware of the sub-categories and used them as their entry points to employment, with those with the higher educations (geologists, engineering, finance) leaning towards large producing mining companies; those with entrepreneurial tendencies leaning towards the exploration and development; and others relying on their hands on experience towards prospecting, staking and so on.

In the mid 1980s and throughout the 1990s there were some industry changing events. There were several large discoveries where the participants were the discoverers and stayed with the projects right through to production in one capacity or another. This was also the period when the brokerage industry, through greed and ignorance transformed itself from the financiers of the junior mining industry to the competitors of the junior mining industry. For the most part the operators of the junior mining companies from that point forward began to bypass the brokerage participants and went directly to the investors themselves. Thus the spawning of the term ‘Non-Brokered Private Placement.” Then with the 1987 crash, the mid-1990s Brex scandal, followed by Delgratia, Golden Rule and Cartaway to name a few the junior mining sector went comatose until the early 2000s. The shakeout was severe to companies and people alike.

Throughout this dramatic period many of the recognized leaders in the industry exited for a number of reasons ranging from financial ruin, to retirement and death. In the early 2000’s the markets improved and the industry came back to life. The brokerage industry of which many of the experienced had departed quickly became deluged with young men and women, with college degrees and MBAs but no mineral sector experience/knowledge. The brokerage industry soon came into the control of financial institutions such as banks and insurance companies, who cared little about the junior mining industry, its structure, or its mode of operation. If you were involved and wanted their support your company was expended to strive to become a producer. Fortunately, there were a few good years until the banking industry finally caused a market meltdown and took the junior mining sector with it.

But the most important thing that happened to the mining sector in this period is that as the Bay Street‘ kids’ (as we used to call them) and their employers caused chaos within the junior mining space without knowing what they were doing. They were not aware of the delicate buffers between the sub-categories, which many in the industry depended on for their livelihood. In essence they caused all market participants to be thrown into a blender. Many never survived. Their sub-categories had become unclear and they were lost. In turn, investors alike become unaware how to distinguish one sub-category from another. Who was an explorer, who was a developer, and who was a producer?

This is why today the sub-category ‘Project Generator’ seems new and unique. It isn’t - 20 years ago it flourished along with all the other subcategories. Companies could distinguish themselves from their competitors, if by nothing else, at least by what they did. Today, in 2018 every single listed junior company’s story tells you they are soon striving to be a ‘producer’!

Of course they’re ‘not’ all going to be producers – but they actually do not know that – and most don’t even know why! They don’t even know what’s involved in running a ‘producer’. Yes most are going to fail miserably. Thanks to idiotic stock exchange policies designed to generate revenues most of these companies are going to bury themselves as well as their shareholders in a mountain of cheap stock. It’s all part of the banking process -  fees, fees , and more fees.

What this means is that investors in the junior mining sector are all being misled, perhaps not intentionally, but they are being misled. BUT, if investors, at least the newer generation, can once again begin to learn how to pick these junior companies apart and come to some understanding as to what some of these companies can actually achieve; investors may be able to analyse whether a particular company is succeeding or not.

This is why we at Junior Mining are going to spend a good deal of our time on ‘Project Generators’. Investing in ‘Project Generators’ can be likened to investing in mutual funds or ETFs rather than placing your hard earned money on a single horse who thinks he’s headed to the Kentucky Derby only to find out that it’s a glue factory on the horizon. ‘Project Generators’ do not tell you that they are taking their project(s) into production. We’re going to teach you how different real ‘Project Generators’ are and how you too can spot them. Be forewarned, they are finding Unicorns.

We have some homework for you. Go to Globex Mining website at www.globexmining.com and pull up the two things: 1) Audited Financial Statements dated December 31, 2017 and their Management’s Discussion and Analysis dated December 31, 2017. In the MD&A read pages 1,2 and 3 for our next Chapter on Project Generators to come soon..

The JuniorMining.com Team

?JuniorMining.com 2018