The first big challenge for many junior exploration companies is raising capital, but using the funds strategically to maintain investor confidence and add value to the enterprise is the test that truly sets some apart in a crowded market.
Fiore Aliperti, CEO of Vancouver-based Metallis Resources Inc. (TSX.V:MTS), believes junior exploration companies like his should be judged not on how much money they raise, but how they use it. Metallis, for example, spends 85 per cent of what it brings in on exploration activities.
“Unfortunately, there are some juniors that tend to use a big chunk of their capital to pay big salaries to senior executives and are constantly raising more money at any price resulting in massive dilution with little to show for it,” he says.
With only 36 million shares issued, excluding warrants and options, since it went public eight years ago, Metallis has kept its share structure tight. Insiders own 12 per cent and have not sold any shares since the company’s listing despite seeing stock gains along the way.
“I believe it’s important for investors to look at what companies do with the money they raise. Is it used to simply enhance management’s lifestyle, or to achieve results in the field?” he adds.
Metallis is focused on the exploration of gold, copper, silver and nickel on its 100 per cent-owned Kirkham Property situated in the heart of British Columbia’s Golden Triangle, a highly mineralized district, home to mines and advanced exploration projects collectively worth billions of dollars.
Assembled by world-renowned copper-gold expert, Rodney Kirkham, the Kirkham Property features several geological environments – porphyry, shear vein and magmatic sulphide – and is believed to have the potential for a world-class mineral discovery, says Mr. Aliperti.
Jurisdiction is crucial in mining exploration, which is why he likes Canada in general and B.C. in particular.
“Nowhere in the world – including B.C. – is easy for mineral exploration. Apart from permitting and approvals, which have always been a factor, community relations and climate change have now become challenges that the mining sector must acknowledge and address as early in the development process as possible” he says.
For more information, visit metallisresources.com
Produced by Randall Anthony Communications. The Globe’s editorial department was not involved in its creation.