Guides
How to value a junior mining company
Juniors usually have no revenue, so earnings multiples do not work. Value comes from the ground, the people and the money in the bank, and each of those can be examined in turn.
Read the balance sheet first
Cash and the annual burn tell you how long the company can operate before raising money. Fresh share issues dilute existing holders, so use fully diluted shares including options and warrants. Debt, streams and royalties sold earlier all reduce what is left for shareholders. A good project can still be a poor investment if the funding path is costly.
Judge the resource by its category
Most juniors hold inferred or indicated resources, not reserves. Inferred material has the lowest geological confidence and cannot be used in economic studies in the same way. Enter categories separately in the calculator and compare enterprise value per ounce with and without the weakest category. Grade, size and proximity to infrastructure matter as much as headline ounces.
Know the study stage
A preliminary economic assessment, a pre-feasibility study and a feasibility study carry rising levels of engineering detail. A project NAV from an early study deserves a heavier haircut. Use the optional mine plan only if you can trace each assumption to a source, and apply risk scores honestly for permitting, funding and jurisdiction.
Test scenarios and write down your thesis
Run bear, base and bull cases and ask what has to be true for the stock to work. If the answer relies on an unfunded build, a permit not yet granted and a high commodity price all at once, the odds are lower than a single number implies. The calculator is a screen and is not investment advice. See the methodology and the glossary for definitions.
Try it with your own figures
The calculator starts with the market snapshot. Nothing is pre-filled for you, and results depend on what you enter.
Open the mining stock calculatorFrequently asked questions
- Why not use price to earnings for a junior?
- Most have no earnings, so asset and project based measures are used instead.
- What is the biggest mistake with juniors?
- Treating inferred resources or an early study NAV as if they were proven value.