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The W5 of Junior Mining Companies
THE W5 OF JUNIOR MINING COMPANIES Hans Smit Ascot Resources Ltd. Minerals North Smithers, BC April 2008 WHAT is a Junior Mining Company? • No set definition • Little or no revenues from production • Exploration, not mining, companies • Raise risk capital by selling shares and explore for minerals • Shareholder reward is share price increase if the company makes new discoveries, not in dividends • Public venture capital companies A long and sometimes colourful history “A mine is a hole in the ground with a liar standing beside it” Mark Mark Twain Twain New Regulatory Regime NI 43-101 – Standards of Disclosure for Mineral Projects But still a few companies mining the public A Prospector finds the showings A junior company proves up a deposit (hopefully) A Mid-tier or Major Company develops and mines the deposit Junior Companies are the exploration division of the mining industry WHO are the people? • Small companies • High percentage of technical people • Management has vested interest • Management and workers often one and the same • No Bureaucracy • Can move on opportunities very quickly • Innovative WHERE Does the money come from? • Public Companies • Funds come from selling new shares • Need good risk – reward to interest shareholders • Share price goes up on good news • Market trends are critical • the TSX is the world leader in finance • Shareholders may be from many countries • Individual shareholders • Professional investors • Funds • Insiders • Major Companies WHEN Are junior companies interested in exploring? • When they can increase shareholder value • When there is potential for discovery • The risks are huge, so must be able to keep a correspondingly high benefit if a discovery is made • There must be reasonably continuous news to keep investor interest (This can lead to statements that overstate the potential or current status of a property) • Need reasonable timelines for exploration and development WHERE do junior companies work? • The world is a big place • Junior Companies can go most anywhere • Need mineral potential • Secure mineral tenure • Under explored areas • Good geoscience information Geoscience BC BC Geological Survey MapPlace • Regulatory straight forward and timely • Assistance to companies in their efforts to work in a responsible manner • Infrastructure • Trained workforce • Service and supply contractors • Limited risk from changing rules, tax regimes and tenure criteria • Social License • Friendly atmosphere • Current market flavor – a major new discovery helps! • Current market flavor – a major new discovery helps! WHY Do we want junior mining companies? • Junior Companies: – – – Spend a lot of money in northern BC Employ a lot of people at good wages Use a lot of contractors and suppliers • Only way to find new mines as major companies do little exploration in NWBC Though only a few properties will become mines Economic activity not dependent on one or two companies There is a whole bunch of junior mining companies working out there! Exploration Dollars in NW BC $170 million in 2007 +90% by Junior Companies 180 180 160 160 140 140 120 120 100 100 80 80 60 60 40 40 20 20 0 0 1996 1996 1998 1998 2000 2000 2002 2002 2004 2004 2006 2006 Ascot Resources Ltd. Suite Suite 900 900 –– 475 475 Howe Howe Street Street Vancouver, Vancouver, BC BC V6C V6C 2B3 2B3 Phone Phone (604) (604) 684-8950 684-8950 Directors: Ken Carter Robert A. Evans Hans Q. Smit John A. Toffan L. John Swann Allan Frame Officers: John A. Toffan Robert A. Evans President President & & CEO CEO Secretary Secretary & & CFO CFO TSX TSX Venture Venture Exchange Exchange Symbol Symbol AOT AOT www.ascotresources.ca Ascot Resources Ltd. SWAMP SWAMP POINT POINT AGGREGATE AGGREGATE MINE MINE SWAMP POINT Location 50 km south of Stewart A Permitted Source of High-Quality Marine-Borne Aggregate Target Markets Anchorage Juneau Shipping Distances from Swamp Point Ketchikan Swamp Point Prince Rupert Anchorage Juneau Ketchikan Prince Rupert Vancouver San Francisco Los Angeles San Diego Honolulu Honolulu 1057 nm 349 nm 126 nm 90 nm 541 nm 1250 nm 1640 nm 1760 nm 2460 nm Surf Inlet Vancouver San Francisco Los Angeles San Diego Exploring since 2003 Material Meets or Exceeds all Construction and Asphalt Aggregate Specs for BC, California and Hawaii Development started Late 2006 Camp, Roads and Sediment Control in Place April 2007 Crushing, Screening and Trucking April 2007 Excavation and Barge Loadout Sites June 2007 Delivery of 150,000 tonnes to Fairview Container Port, Prince Rupert Ready to Supply Local Markets Swamp Point Marine Facilities Swamp Point Marine Facilities Ship Loader Construction 2008 Ascot Resources Ltd. Dilworth Gold Silver Project Dilworth Project Mapping, Mapping, geophysics geophysics and and geochemistry geochemistry in in 2008 2008 Dilworth Project Two Two drills drills in in 2008 2008 Ascot Resources Ltd. • 52.3 million shares issued • 3 month price range $0.92 to $1.35 • $12.4 million spent on Swamp Point • $ 2.3 million spent on Dilworth • Raised $16 million in December 2008 • Additional $12 million for construction at Swamp Point in 2008 – minimum • $3 million for Dilworth • Building a mine • Building new jobs and contract opportunities for northerners • Building a more diverse economy in NWBC • Building shareholder value • But while the outlook is good, it is still a risk venture Ascot – 3 Year Share Price Bank of Montreal – 3 Year Share Price Thompson Creek – 3 Year Share Price WHY Do people work for junior companies? • Because of the fun!
