My Guide To Stockpicking in the junior mining universe
Chapter 1-5 of 16
As with anything else on this site, this content shouldn't be construed as investment advice as I am no registered investment advisor. Please read the full disclaimer here before proceeding further.
As a reader of my articles and other texts on this site, you could of course accept my opinions and views without any questions. As I am not that kind of a person myself, I could vividly imagine you would like to see more information about the backgrounds of those opinions and views yourself. After investing in mining stocks since the summer of 2010, certain elements surfaced as seemingly important to me when evaluating companies in this sector, and I thought it might be interesting for investors to read about my views.
After reading these first five draft chapters, you will probably notice why this sector is relatively intensive to analyze and understand. I have decided not to reveal all my insights for free, as I am planning to write more chapters in the future, and possibly joining forces with others for an extensive guide, maybe resulting in an E-book or even hardcopy. A work in progress so to say, in the meantime you can read and use these chapters and my articles, as each of them contains bits and pieces of latter chapters.
My method consists of many parameters, rules of thumb, ways of analysis, sources of information and guidelines, and I am not pretending to be complete, as I am no professional analyst, registered investment advisor, geologist, accountant, investment banker or mining company manager, but just an informed private investor. If you feel something should or could be different or you have questions, just fire away via the Contact form. Anything to finetune or improve My Guide or this site in general will be welcomed and enjoyed by me and probably all readers.
My guide is by no means the industry standard guide or represents a recommended order of doing analysis. It is just my own method, result of several years of failures and success. The objective is to write down all aspects I can possible take into consideration, and I combine company/project specific aspects (clear go/no go indications) in a (at least for me) useful, efficient order, together with more general aspects which will hopefully contribute to general knowledge/context. Subjects are discussed in a summarized way, geared towards usefulness when stockpicking.
Table of Content
1. Listing, activity, news
It all starts here. Does the company have a decent NYSE (US), TSX-V or TSX (Canada) listing, or just an CSE/CNSX (Canada) or OTC (US) listing? In the latter case, if you still think you might have an interesting stock on your hands, be aware risks at the CSE or OTC are multiples of TSX/TSXV stocks, as an CNSX/OTC stock doesn't have much basic reporting duties or aren't subject to as much exchange oversight (IIROC/SEC) as its bigger brothers. A popular nickname for the CSE is the exchange of funny deals, and exactly this subject explains the popularity of this exchange, not the low listing fees and short timelines as many execs want you to believe. You might have noticed that I sometimes take on sponsoring companies with a CSE listing, but they all must have serious plans to uplist within 6 months when contracting them, putting them through sufficient scrutiny.
Always look if a junior mining company has a decent, functional and up to date website, and has a continuous series of news releases published on it, preferably on material issues, and preferably the same news releases published on sites like tmxmoney.com through Marketwired, Canada Newswire or others. By continuous I mean at least once every month or two months. Every news release on tmxmoney.com costs a company about $800-1000, so if it hardly announces anything on tmxmoney.com but still does on its own site, it's an indication of a severe cash problem. If it doesn't do this either, than it is probably completely out of cash and/or inactive. In order to find all news releases, go to Stockwatch.com. A cheap subscription is a great starting point for doing due diligence as Stockwatch might look outdated, but it is the best source for information on stocks.
Also watch out for streams of almost/mostly (of course any of these subjects can have very material meaning in other cases but mostly they don't) meaningless news releases, like mentioning of contracting of engineering firms for a study, determining targets for a drill program, getting ready for a drill program, reporting drill cores without results, mentioning new but unknown directors, filing permitting applications, arranging syndicates for capex funding, signing LOI's, (series of) news releases containing core pictures or mere descriptions of rock types/mineralization without any assay results, series of several high grade but very short (<1m) intercepts of for example 0.5m @80g/t, each intercept proudly presented in separate news releases. You will learn to recognize yourself which news release is material and which one is not after reading hundreds of them.
Also beware of companies using a trading halt very frequently, and/or for relatively unimportant news, but not advancing a project of any impact, they are just trying to get attention but usually have no good project on their hands.
Another red flag is mentioning third party promotion or an interview of the CEO (especially on some kind of IR firm channel) as a news release. This is just blatant promotion, and not many serious junior miners will ever do this.
There are a host of news examples that could indicate red flags, here are a few examples:
For example, a certain company was supposed to complete a Feasibility Study (FS) but they very covertly sneaked a sentence about an "updated PEA" into a news release about metallurgical testwork, without any explanation or introduction of such a study. It turned out later their existing resource estimate was about 50% overstated and a low quality trainwreck, and couldn't be used for their upcoming FS, so they had to redo the resource estimate all over again and released this updated PEA first, as a staged solution. The share price crashed on this news.
Otherwise it would have been very weird to see a FS containing a much smaller resource estimate out of the blue, this could even be against regulations if I'm not mistaken, as all material changes (like a smaller resource definitely is) have to be disclosed immediately. The integration of such a completely different resource estimate would take at least a few months, so this probably has been the reason to release an updated PEA plus resource estimate first, before the company could continue with its FS. They should have brought the disappointment on the resource estimate much more transparent. Needless to say I lost all confidence in management when I found out about this, and so should you. When things like this happen, management and BoD is immediately transferred onto my "blacklist".
- companies not quickly (1-2 weeks) following up on bad news which demands action to solve things. Here is an example of two recent cases, and its implications on share prices. For example, a certain company was announcing trouble regarding grade variance and a possible cash shortfall right before first gold pour (first stage of commencing actual production). Grade variance means the company detected different grades compared to their resource estimate which was used for their most recent economic study, in turn used to base the mine plan on), when testing the ore/leaching material ready for processing through the mine plant. In this case the grade disappointed obviously.
If this issue appears to be structural for large amounts of ore, the profitability of the entire project could be in danger. With a cash shortfall the company runs out of money and can't pay the bills and personnel, which isn't helpful either. So two very serious issues arose simultaneously. However, the company proceeded with other news releases in the next 4 weeks, without mentioning anything on these very important issues. Shareholders reacted immediately, together with speculative shorts which smelled blood, and sent the share price down in this period by 60%. The problems regarding the grade variance were serious, as the company filed for chapter 11 bankruptcy not much later.
A good example of another company who does this much better in my view is a developing company which had to initiate a construction halt at their project after local protesters damaged company assets after worries about possible damage to sacred places in the direct vicinity of the project. The company replaced the CEO, temporarily layed off staff and got into intense discussions, keeping shareholders updated all along. Since then the share price downfall stabilized on a -30% level for some time, construction has resumed and nearing completion, and the share price started a healthy recovery.
Bottom line: the company has to communicate with their shareholder base, even if it has no direct solutions for problems (could be prohibited in part by disclosure limitations), but only partial insights, or outlining efforts.
- drill results: as mentioned very short, high grade drill results, but also leaving out a lot of results, or information that explains the extent of the drill program. What are good drill results? As a rule of thumb, of course very much connected to metal prices at a given moment, more on this in a later chapter:
2. Market sentiments
As I mentioned in my introduction article, the state of the markets is probably the most determining factor for the (relative) price action of a share price of junior mining stocks. The proverbial saying is a rising tide lifts all boats, and rising metal prices sure help, but overall stockmarket sentiment is the most powerful parameter. Compared to 2009-2011, the volatility of the TSX Venture looks moderate over the period of 2012 until 2016, nevertheless the index lost almost 70%.
Also notice the lower overall volume of shares traded the last two years of the bear market 2012-2015, despite considerably lower prices. This is a good indicator of low investor sentiment as people stay away. Mining stocks often hardly move on good news anymore, as compared to the pre-2011 period (except the 2008 crash of course), when a news release containing for example "excellent drill result", "Preliminary Economic Assessment", "commencing drill program" or "rare earth" in its title was enough to instantly send stocks up 10-30%, regardless of the actual content.
This was actually the time that investing in mining stocks appeared on my radar, as these returns didn't go by unnoticed, even in my homecountry The Netherlands (which doesn't have a single operating mine anymore for a long time if I'm correct, so Dutch people aren't exactly mining minded), Europe where mining oriented retail investors are as rare as a needle in a haystack. Too bad this period didn't last that long, but I made some nice profits as a novice and got out right after the spike in February 2011 as I thankfully already picked up that a very speculative market going hyperbolic is dangerous. I lost some of those profits again unfortunately after dipping my toes in again very carefully, assuming the Venture completed a healthy profit taking correction a few months later, but that is part of a learning process every investor goes through. Nevertheless, juniors were firmly on my radar after that, and I decided to gain as much knowledge and experience as I could on this sector, in order to be able to make money even in downtrends, but for sure be ready when the next uptrend arrives.
Back to market sentiments for now. A project can be profitable, the price of a metal can be convenient or even relatively high, but with the markets going down your stock will probably go down with it. This is also true on a larger scale for the US stockmarkets crashing during the financial crisis of 2008-2009. This dragged everything with it, metal prices, other stock indices and clearly the TSX Venture as well. Looking in hindsight, the beginning of 2009 was a golden opportunity to enter, as the underlying fundamentals were healthy, with China growing like never before which was the main driver of metal prices.
Although the proverbial saying is a rising tide lifts all boats as mentioned, and this is especially true in mining, however there are some cases that go down regardless through disappointing developments, and others that manage to stay neutral or even go up when the index goes down, for example:
Share price increase:
Share price neutral:
Sometimes a combination of these factors can coexist as well. My research and analysis focuses predominantly on the first three factors, and especially the third one: positive catalysts playing out soon. After years of stock analysis in a downtrend, I found this focus to be the most rewarding with the most asymmetric risk/reward ratio. With soft commodity sentiment and uncertain economic developments for BRICS etc, it is risky to bet on long term stories with a 1-2 year horizon. My own portfolio does contain a few of those long term stories, but these stocks have a strong and viable case, and have already proven their relative immunity for downtrending commodity prices/market sentiment, and have no trouble raising cash to continue advancing their projects.
The commodity and its price are very determining for the well-being of a junior mining company, next to market sentiment. Whether a company is searching for precious metals, uranium, rare earths, lithium or base metals, means the world for profitability, commodity pricing risks (supply/demand trends, free market or not), project risks like metallurgy, permitting, location, difficulty in finding solid deposits, finding financiers for exploration, economic studies or project financing, jurisdictions, mining risks etcetc. I will expand this chapter later on. Next up, I'll provide some information on one example of commodities: gold, the most illustrous of them all, maintaining a high value as long as it has been used by civilisations on earth. You can find more information on other metals in the Analysis menu.
Gold (chemical symbol: Au) is a precious metal, just like silver, platinum and palladium, and one of the most valuable and highly sought after on the planet. Its main purpose is for investing or preservation of wealth, or a hedge against inflation. As small deposits or operations can already be profitable, gold juniors are the most abundant among junior miners on the various exchanges, but certainly the Canadian TSX Venture and TSX. There are roughly 500 gold exploring/developing/producing companies listed on these two exchanges with a NI43-101 registered resource estimate.
As gold has no fundamental supply/demand mechanism, but supposedly moves on the wildest drivers like banks and governments/central banks secretly regulating the gold price through large ETFs like GLD, India smuggling, India and China special occasions, European gold repatriation from the US, conflicts around the world, covert China politics to create a gold backed yuan based on gold reserves even secretly superseding those of the US, QEs, US debt, impending collapse of the US dollar or even all currencies for that matter, etcetcetcetc, pricing of the yellow metal is always surrounded with sentiment and speculation, and therefore is risky in itself.
Market watchers assumed that after the 2011 high of $1923/oz, the AISC of $1000-1200/oz was enough to provide a bottom under the price of gold, and it still is a solid threshold, after raging inflation took place in 2022. Notwithstanding the fact that I don't believe in any fundamental for gold as it is total speculation, based on inconsistent sentiment drivers at most. Therefore I tend to look for solid gold projects, capable of being profitable at prices of $1250-1500/oz. This "being profitable" isn't easy to explain, more on this in chapter 12.
Something a visitor of a mining company's website looks for first in over 80% of all visits is the management team and the Board of Directors (BoD), according to mining company staff I talked to. This shows you how important a good team at the helm is for investors or other mining company enthusiasts. At the same time this is one of the most difficult variables to analyze when researching mining stocks. For example, individuals can have one success story under their belt, but you don't always know if they were just lucky. On the other hand, there are also executives who saw a few big winners during good times, and decided to feed off of it during bad times but not achieving much besides filling their pockets. But it doesn't have to do with intentions of course, executives can be sloppy, make mistakes, follow wrong strategies, do nothing constructive, irritate colleagues, companies and shareholders with their behaviour, etcetc.
These things are all issues that aren't all that easy to spot. Usually it takes you at least a year to find out what an individual really is about, regarding promises, actions, intentions. Sometimes even more. It does help to meet executives in person, for example on mining conferences, and take some time for a private conversation, beyond the usual promotion chat. Just ask them difficult questions, and see how they address them, within rules of disclosure of course. Do they really listen to you? Do they provide actual answers which are to the point or do they revert back to their own favorite topics too quickly, avoiding hot potatoes? I found that the more you are informed about the project at hand, and the more you know about mining investing in general, the more open management is to you, and the more information you get. And of course the more difficult you can make life for them, which the good guys tend to appreciate as they have nothing to hide and like the interest.
What you can do immediately for desktop research is easy. Look for the stage the company is in at the moment, and start looking at the management team as a whole. If for example a company is planning on raising capex funding, do they have people on board with such experience, lots of financial connections as they were for example bankers in the past? If not, chances are there financiers wouldn't come up with the needed funds. Executives with financing experience and inherent network in the financial world are very important when raising capex, but to a lesser degree also for any junior in any stage wanting to raise capital in the markets for drill programs, economic studies, permitting, working capital, etc. I know of juniors with very good projects, but only geologists and mine managers on board and no financial guy, which have lots of trouble raising cash almost all the time. Another item is looking for nationality and location of management. Is management not Canadian, lives outside Canada and doesn't have a good financial network in their own country? Chances are, although the mining world isn't big, that they haven't such a good network in the Canadian minefinancing community, which decreases their chances on raising cash a great deal.
More specific for individual executives: look if they have experience in their current role at well known companies, or that they have a clear career path, leading to bigger market cap juniors or higher positions. If you don't know anything on the mentioned companies, Google is your friend as always.
Look for awards like "Northern Miner Man of the Year", "Prospector of the Year" or "Canadian Mining Hall of Fame", as an indication of industry wide acknowledgements for large achievements. You don't tend to find these kind of people very often in inactive juniors with bad management teams and so-so projects. These people also attract investors and cash, and they are often very picky when chosing projects as they have high standards.
To me, management makes a good start when it keeps its promises within earlier discussed thresholds on timelines, announcements, events. This can be checked when reading earlier statements in news releases, presentations or MD&A discussions. It is a lot of work. Repeated delays on just about everything you can think of are household in mining, with the consequence of investors bowing out after some time if this gets out of hand (at least if they care about their hard earned cash). Accepted delays to me are as mentioned earlier 2-3 months on resource estimates or economic studies of small/midsized projects(NI43-101 resource estimate of for example 2Moz Au, a PEA/PFS/FS capex of $100-500M) , 30% max or 3-6 months on construction of small/midsized mines (capex of $100-500M) and 6-24 months on larger to giant construction projects, and 3-12 months delays on permitting (this is in jurisdictions which don't have a known anti-mining reputation btw, otherwise permitting could take many years more or not being granted at all). Megaprojects with a capex over $1-2B could easily have permitting trajectories of 2-5 years, but delays of 12-48 months aren't uncommon either, as megaprojects often attract a lot of environmental activists who are specialists at obstructing and delaying permitting processes. Especially watch out for well-funded activists as they can make life very difficult for mining companies.
The management teams actually achieving their self initiated deadlines are not that standard, maybe 10% makes it in time. When you see teams beating their own schedule regularly with good outcomes, you have something special on your hand. Write down their names, and keep following them as they probably really know what they are doing, and sooner or later probably run into a genuine multi bagger success story. The best projects attract the best people in my view.
Another important thing to look for are buyouts of companies they led, and preferably founded. The bigger the buyouts, the more successful they were. Buyouts get interesting from about $150-200M and more, as significant value could have been added in most cases. Most juniors start their IPO listing with a $15-50M market capitalization. Multiple successful buyouts indicate very successful management.
These socalled "rainmakers" are a breed of its own. These are the most successful and often dominant players in the mining arena. Famous examples are Rob McEwen, Robert Friedland, Ross Beaty, Lukas Lundin, Frank Giustra, Keith Neumeyer and Robert Quartermain, but also lesser known persons like Greg Sedun, Sean Roosen, Paul Matysek, Walter Berukoff, Mark O'Dea, Patrick Anderson and Mark Morabito to name a few distinguished executives with great trackrecords of building successful companies and/or enjoying large buyouts.
When they start new projects, the entire investment community becomes interested, as it should be something special in most cases. This is no guarantee for success of course, but it is at least a signal of high potential. They are often early movers as well. For example, mining legend Lukas Lundin (deceased in 2022 unfortunately) acquired the very prospective Fruta del Norte project in Ecuador from Kinross, right after rumours surfaced about Ecuador planning on being investor friendly (after being the opposite for many years). He wouldn't invest a few hundred million dollar without having talked extensively with the Ecuadorian government, talked through new tax regimes, permitting issues, politics, economics, etcetc. These moves could be a very valid indication of Ecuador returning to mining friendly territory, and as this country has a lot of very interesting deposits waiting in the jungle, chances are that other companies can start very nice projects by themselves, more or less standing on the shoulders of the Lundin family.
A lot has been written about salaries of management and BoD. To get a good understanding of appropriate, industry standard salaries, it is best to compare the executive of the company you are analyzing, with similar peers (marketcap, stage, jurisdiction, resource, etc). It is an important issue, because it indicates good or bad allocation of precious cash, especially if there is not much progress on a project. There are literally hundreds of junior mining companies, which just do offerings or PPs to raise cash for the salaries of their executives, and pay for their listing fees and legal fees, and have no interest in developing an actual project. These are the socalled lifestyle companies. As long as the TMX Group needs those listing fees to be profitable, they can continue with this malpractices unfortunately, but that is another discussion. Another issue could be things like expenses. Some executives have their company pay for everything, cars, vacations, eduction of kids, housing renovations, etcetc. Usually you will find statements on this in the annual financial statements of a company.
Large option packages are also household in mining, and a focus on strikes is speaking volumes here: large packages and/or strikes at or very close to current share prices with very long (5 years) expiry dates, the options are simply giveaways without any incentive to achieve significant thresholds or share appreciation. Normal strikes are at least at about 25-50% of current share prices, with expiry periods of a few years.
5. Share structure, institutions/insider holdings, financings
The share structure of a junior mining company is also one of the starting points of solid due diligence. Juniors can have hundreds of millions of outstanding shares, but very small market caps as their share price is often just $0.01-0.05. This is something often seen in bear markets, and often not very positive. When you start looking at this number, always keep in mind the stage of this junior. Juniors need private placements, offerings or bought deals (brokered or non brokered) to raise cash for their operations, until the start of construction, and one last big capital raise in general (about 25-35% of initial capex) for capex funding. Especially economic studies in the end (Pre Feasibility Study and Feasibility Study) cost a lot of money (3-10% of capex) as a lot of detailed engineering and other studies have to be done, and usually permitting starts as well in that stage, which can be costly, too.
When a junior is in the early stages of exploration (no NI43-101 resource estimate completed, lots of drilling needed for this) it's immediately clear they will need a lot of dilutive capital raises in many instances. Make sure a junior doesn't have much more than 40-50M shares in that case. When it has a NI43-101 resource estimate, 80-150M shares are normal. There are certain exceptions regarding large deposits requiring lots of drilling, those can have shares up to 200-300M. When advancing to economic studies, the share price is usually appreciated from early stage levels, and dilution shouldn't have such an impact anymore. Usually it's the early exploration/capex financing that deals a huge blow to shareholders as far as dilution, only to see the share price recover soon after as construction reaches completion. After this last financing outstanding shares can increase to 300-500M shares. I must say this is confined to Canadian listings, in Australia and Great Britain I have seen sharecounts running into the billions for seemingly normal exploration companies, trading on fractions of pennies. In Canada those would be considered scams, like most OTC companies in the US. I have no idea why these countries don't use roll backs or don't seem to care about share structure as much. In a way it can be considered more transparent, but I don't like the huge relative spread in some cases.
When sharecounts for Canadian listings run significantly higher than the mentioned numbers, it's time to research the reason behind it. Didn't they have success with exploration? Why didn't they bring out a resource estimate? Why isn't anything happening for over a year (or more)? A lot of times it's an indication of a lack of quality of projects and/or management. Another issue is, that the share price of this type of companies gets so low that they are no longer allowed to do private placements. If I'm correct, the bar for this is set at a market cap of $1M, and the threshold for a private placement share price is $0.05, although there are exceptions here as well. Usually companies with share prices below $0.05 simply do the placement at $0.05 if they can get investors for this (a lot of times own management buys a lot), but raises below $0.05 often happen as well nowadays.
Most of the times private placements are done at a slight discount of 5-10% of the share price at the time of closing (with a maximum of 25% discount), accompanied with one or a half warrant, to make things interesting for participants, or no warrant at all. Sometimes you see no discount or even a premium, which is an indication of lots of interest for a story. The term "oversubscribed" indicates massive interest as well. Only a few times I have witnessed placements with very large premiums (up to 1000%), and I suspect this has been done by shareholder related third parties, to keep dilution to a minimum. This is great for shareholders of course, but it always strikes me as very opaque. Why would any party pay 10 times as much as he can get shares in the open market for normal prices?
Money is raised at premiums with flow through placements, which have tax credits for investors. FT premiums range from 10 to 50-60%, and even up to 120% for charity flow throughs, which is of course advantageous for the issuer as it limits dilution. Beware of large warrants and options positions, as this can cause significant additional dilution as well. The upside from this is that the company receives cash from exercised warrants or options. It is important to know if the warrant/options exercisers are selling the newly acquired shares or not, for the obvious reasons. Usually management has a good handle on this information, or even better can arrange buyers if exercisers want to sell immediately. Ask management about this when expiry dates come up. If you are interested in owning warrants without participating in a private placement, please look for tradable warrants and implied values of those on canadianwarrants.com.
Large sharecounts can be dangerous, especially for early stage juniors, as they frequently do a consolidation of shares (also called reverse split or roll back). This is done in order to achieve a higher share price, so they get more interesting for investors, and can be able to do a normal private placement again, which attracts more interested parties. It's dangerous for shareholders because in 95% of all cases the consolidated share price goes down for some reason unknown to me, without any material news published during that period. This downfall can be quite substantial, to the magnitude of 20-60% in a lot of cases. I have no idea why this happens, maybe the stock had become completely illiquid before the roll back, or traded at a large spread, and shareholders already wanted to rotate to other stocks and could finally dump their shares on the back of this roll back and often new story/marketing and increased trading volume.
Other things to look for are institutional holdings, the socalled "strong hands". Big funds usually hold shares for investment purposes, and don't trade them very quickly like a retail investor would on some bit of bad news. Be careful when a stock of interest is included in ETFs like the Junior Gold Miners ETF (NYSEARCA:GDXJ) which is created to replicate the Global Junior Gold Miners Index which is a basket of small-cap gold exploration, development and production companies. Sometimes the listed stocks are changed for other stocks, due to different reasons (bad performance, share price or market cap not meeting certain thresholds). This happens at fixed dates, one or two times a year. The Russell 2000 is also such an index. When a stock is excluded from such entities, this causes huge sell offs, as a lot of institutions automatically have to sell the stock when it leaves the ETF or index. When these large volumes would result in a cratering stock as daily average volume wouldn't be able to handle this in a few days, often large block trades (aka crosses) are performed, usually at a discount of the normal share price, so you often see the share price being walked down by unknown parties until the block trade price is reached. Often when this rebalancing is finished, those stocks recover to a certain degree, so it could be an interesting trading opportunity for a 10-20% profit. No guarantees of course. Therefore it is important to ask company management if they are included and what the thresholds and dates for reshuffling are. It is recommended you do some research on this yourself as well. Institutions or large parties can also sell for other reasons, and I have seen newsletter recommendations or investment fund liquidations cause quite some stir as well in junior mining land.
Insider tradings are also useful in some cases. There are quite a few websites following insider transactions, so insiders are quite aware of the possible impact of their actions, and can use it to their advantage. To be honest, in 80% of all cases I followed, it meant nothing, but in some cases it showed good trading qualities of management, and in very few cases insider trading was done right before material news came out which caused the share price to soar or crash. Needless to say that management, which is selling right before a crash, and reports this trade after the bad news, takes a one way route onto my blacklist. It is possible via SEDI to track all insider transactions, and this could give quite a bit of insight in related transactions by insiders of interest. I did an extensive analysis of the transactions of former market darling Pinetree Capital in the past in relation to a stock I was analyzing, and I discovered a widespread dump on the market of a lot of shares in Pinetrees portfolio. This was all because of very acute liquidity issues of Pinetree, as it went bankrupt a few months later. As such, it was completely unrelated to the stocks itself, and provided an excellent entry point for many stocks. Another peculiar cause was the recommendation of a German newsletter with lots of exposure, which announced to "sell all mining stocks" at the end of 2014. A comparable crash was the result, providing a nice opportunity for retail investors like me as well. You can only hope for such godsent occasions, as they are rare.
Such recommendations and actions can send a share price down, so even on this you could make profits when shorting it first, if you have timely information. Other causes for downfalls are shorters. They sometimes have other agendas as well, for example when they find out that a company is about to raise capital in the markets, they bring down the share price, so the placement has to be done at a lower price as usually investors want a discount to the share price. Shorters use the tiniest bit of bad news to bring a stock down to unrealistic levels, and this happens especially at stocks with a US listing. Fortunately, Canadian juniors aren't a victim that much. To check short interests, use for example www.shortsqueeze.com.
This chapter hasn't been completed yet.
This and the other remaining chapters might be completed in the future, potentially in a commercial effort.