Mineral exploration companies are incredibly risky to own. Most of them have no revenues or any plans on generating revenues in the foreseeable future. Nevertheless exploration is very capital intensive, and since it is virtually impossible to borrow money without revenue these companies have to issue stock in order to fund their exploration efforts. Given the market valuations of most of these companies it is punitive to shareholders even if management has to raise just a few million dollars to drill for resources or to compile a technical geological report.
Furthermore, just because a company raises money to drill for gold this doesn't mean it will find any. Similarly, a company can raise money to prepare a geological report only...
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