By Matthew Nelson
Before the pandemic started, I was 16, and my interest in making money had just begun to arise. My cousin, Tommy Humphreys, was a strong influencer in that. I saw how he was living, a new modern house, a place in Palm Springs, it seemed nice. At the time, I didn't know exactly what he was doing, and I wanted to know. This is where my interest began.
I started to learn about what he does and how he makes money. I began looking at mining companies. Soon after, I started investing alongside Tommy. From then, my interest only grew deeper. I started spending all my time looking at companies. Then, in February, when the pandemic began, I created a brand to represent my interest and build a network. Today, I have invested in multiple successful junior mining companies and made a fair share of money doing so. Through this time, I've learned four main things about investing in junior mining companies. Here they are!
Leadership is Key
For any company, this is true. However, this seems to be one, if not the most crucial, when investing in junior mining companies. These companies have the power to make investors extraordinarily wealthy but also broke. If you're going to invest in one of these companies, the leadership has to be there. They need to know what they're doing for investors to make their money back. There can't be room for huge mistakes that set the company back. People who have succeeded before know how to identify strong ore bodies that have the potential for high rewards. They know where to look and what to look for. They have a more likely chance of finding something special because they have the experience. Typically, the leaders that have succeeded before have an extensive network as well. They know the best geologists and can pull together a team that will allow them to grow. With a beginner, the best people in the industry won't want to join them. With a large network, many will take notice of what they are doing and will support them. Having support from some of the best investors and entrepreneurs in the industry will allow the company to be seen on a large scale. With many eyes on the project, news will be huge. There are more reasons for an investor to go with a leader that has had success before. These are just why having an experienced leader makes it that much easier to return a profit.
Timing Plays a Part
With the mining industry, the timing seems to play a significant factor. Great timing doesn't come out of the blue. One has to create it by putting himself in a place of success. The mining industry is very much an industry that involves timing. I've noticed mining stocks can be overlooked sometimes. With all of the tech stocks taking all the glory, this industry has times where the timing is not there. When market conditions get shaky, that's when mining stocks begin to shine. You never know when that's going to happen, but when it does, that's when timing plays its part. With timing on your side, the possibilities open up, and attention is brought to these companies. People want to make a quick buck, and with gold or one of these resources only going higher in price, junior mining companies are one of the easiest ways.
Boom or Bust
Probably one of the first things I noticed was this industry can make people broke or very wealthy. One of the first people I started to follow when researching how to make money in this industry was Robert Friedland. I noticed some of his projects would make him fortunes beyond measure, and others would crush him and his investors. This pattern follows with a lot of people in this industry. No matter how perfect your project looks or how well you did in the past, it's all about the drill results. If you don't have drill results that show future potential, there goes your project. It doesn't matter who you're working with or what you have done to get where you are. This is where luck comes into place for mining companies. There has to be a little bit of luck involved in every successful deal. People can create luck for themselves by getting exposure to more projects, but only a few will turn out to be a "boom," and some will be a "bust." It's all about working with that you have to create luck in your future.
This is true in almost every aspect of business, but especially mining. With a network, you get access to the best deals and for a low price. You have people that are willing to back you and invest in what you're investing in. People will seek you out, and your exposure to the best deals will improve. So you must find ways to network. Either create valuable content, meet people at events, or start winning in the industry. All of these can help you grow a following and, in turn, increase your exposure to the best projects.
These are some of the things that I've found super crucial in the mining industry. I still have a lot to learn, and I'm excited to do so. I hope you find this article of some use and if not, learn a bit more about me.