The Right Junior Resource Shares Offer Investors Unique Opportunities

Photo: The Right Junior Resource Shares Offer Investors Unique Opportunities

Junior mining shares can create incredible returns. Before your money goes to work in a small resource company, getting your hands on quality research is a good idea.

David Erfle has devoted more than a decade to becoming one of the go-to sources for information about junior miners. Instead of taking the approach that a well-heeled institutional investor could afford, David designs his investment strategies for retail investors that have to keep an eye on their portfolio's value.

Today there is probably an opportunity for investors of all kinds developing in the resource sector. Most of the metals sold off after gold notched in its all time high in 2011, and since then, resource investments haven't been very popular.

Things for juniors have improved gradually over the last few years, and now it looks like the investment would is beginning to see the global resource supply situation for what it is. There haven't been any major gold discoveries in a long time, and the copper supply chain is also looking shaky.

Major miners invested heavily in places like Indonesia and Southern Africa. Now there are political challenges that may evolve into supply reductions, and this is a problem for the entire planet.

Where Am I Putting My Money?

David Erfle stresses the idea that location matters. While this would seem simple, when we look at how mines have developed over the last few decades, major miners like Freeport-McMoRan haven't taken this wisdom to heart.

The Grasberg mega project has the ability to produce incredible amounts of copper, gold and other metals, but its operation has been marred by violence and political strife. Freeport decided to cede majority control to the Indonesian government, who has a spotty track record when it comes to running large projects.

Unfortunately graft is common in Indonesia, and apparently similar forces are at work in some of the best copper mining districts in Southern Africa. This is probably why David stresses the importance of investing in a mining jurisdiction where there is political stability, and governments make laws to encourage development in good faith.

Finding Value

If you want to learn more about how David evaluates a junior mining company, this presentation from this year's VRIC is a great resource. There are numerous factors that an investor should pay attention to before buying into a junior miner, and David breaks down some of the leading metrics to investigate.

A culture of chronic underinvestment in new sources of vital resources has left the manufacturing world wondering where new supplies of metals like cobalt and lithium will come from.

The good news is that Canada can play a role in making sure the world has access to the resources it needs. The recent funding that Nemaska Lithium received from a variety of sources demonstrates how major investment groups are changing their stance on supporting potential resource producers.

There are many other projects in Canada that are probably going to advance their projects as time goes on. If you want to catch up with David, and learn about which projects he thinks offer value, the International Mining Investment Conference (IMIC) is the place to do it.

The IMIC will be happening on May 15th and 16th at the Vancouver Convention Center East, and will feature presentations from some of the most respected analysts in mining. There will also be numerous resource producers in attendance, so investors can talk to them face to face.

If this all sounds like a blast, you can register right now for the IMIC!

Be sure to use the discount code 'CAMBRIDGE', so you can save $10 off the $19 preregistration fee. Registration on the day of the event costs $30, so don't wait to register, and reserve your spot at this year's IMIC for a great price!