Learn · 2 min read

What is a junior mining company?

Many of the world's mineral discoveries are made not by the big miners but by small listed companies called juniors. They raise money, drill, publish results, and either sell what they find or try to build a mine. Here is how they work.

Juniors, mid-tiers and majors

Junior

One or a few projects, a small team, no mine income. Raises money by selling shares, spends it on exploration and studies. Listed mostly on the ASX, TSX Venture, CSE and AIM. Juniors make many of the new discoveries.

Major

Producing mines on several continents, funded from its own cash flow. Does exploration too, but often buys discoveries or juniors outright once a deposit is proven.

In between sit mid-tier producers, often former juniors with one or two mines. Juniors are split, loosely, into explorers (looking for a deposit) and developers (studying or building a mine on one they have found).

The life of a junior's project

Press Play, or pick a stage. The curves show, schematically, how money spent climbs while uncertainty falls as a project moves towards a mine.

Schematic, not data: every project's path differs, and most never reach production.

How juniors pay for exploration

Share placements and rights issues: selling new shares to investors, the main source of money for most juniors.
Flow-through shares (Canada): exploration spending passed through to investors as tax deductions.
Joint ventures and earn-ins: a larger company funds drilling to earn a share of the project.
Government grants: such as the drilling co-funding programmes run by Australian states.
Royalty and streaming deals, offtake prepayments and project debt: usually only near the build stage.

What juniors publish

Because their value rests on what is in the ground, juniors publish a steady flow of technical releases: drill results, assays, resource estimates and study results, each signed off by a named Competent or Qualified Person under the JORC Code or NI 43-101. Learning to read them starts with drill results and exploration drilling.

Prospector Trails turns those releases into 3D drill models: every project on the country guides marked 3D has one, and the latest drill results on the homepage open each new release on its model.

Questions

What is a junior mining company?

A small mining company, usually listed on an exchange such as the ASX, TSX Venture, TSX, AIM or the CSE, that explores for or develops mineral deposits but has little or no production income. It funds its work by selling shares to investors rather than from mine cash flow.

What is the difference between a junior and a major mining company?

Majors, such as BHP, Rio Tinto or Newmont, run producing mines and pay for exploration and new projects from their own revenue. Juniors usually have no revenue, hold one or a few projects, and raise money in the market for each stage of work.

What does a junior mining company do?

It acquires exploration licences, explores them with mapping, sampling, geophysics and drilling, publishes its results, estimates a resource if it finds one, and runs studies on whether a mine would work. It then sells or partners the project, or raises the finance to build the mine itself.

How do junior mining companies make money?

Mostly they do not, until a project is sold or a mine is built. Juniors spend money on exploration and studies; the reward, if any, comes from a discovery that a larger company buys or that becomes a producing mine.

What do junior miners have to publish?

Exchange rules require them to report exploration results, resources and reserves to a code: the JORC Code on the ASX, NI 43-101 in Canada, and either on AIM. Each report names a Competent or Qualified Person who takes responsibility for it.

How do you start a junior mining company?

Typically: secure the rights to a project (a licence or an option over one), raise seed money, hire a geological team, and list on an exchange to raise more, with a prospectus that includes an independent geologist's report on the project.

Sources

An explainer of how mining companies report their work, written from the public codes and rules linked above. It describes the documents and does not rate any company, project or result. Not investment advice.