Investing in Mining Companies for Beginners

    if it isn’t grown it has to be mined
    you’ve probably heard some variation of
    this saying it is used by people
    concerned about the environmental
    effects of mineral depletion as well as
    people bullish on mining stocks
    although these two groups have a very
    different emphasis when they speak it
    they are both right mining is Big
    Business almost every commercial product
    has elements that started off buried
    beneath the Earth here are a few things
    that you should know before adding
    mining stocks to your portfolio yes in
    this video we are going to talk mining
    companies or how you can invest in
    mining companies so stay tuned into
    video Let’s Start
    two groups one sector mining stocks are
    truly two distinct groups majors and
    juniors
    the majors are well capitalized
    companies with Decades of History World
    spanning operations and slow and steady
    cash flow
    major mining companies are no different
    from large oil companies and many of the
    same metrics apply with a mining twist
    both have proven and probable reserves
    except mining companies break down
    profit and cost on a given deposit by
    the ton instead of the Barrel in short a
    mining major is easy to evaluate and
    easy to invest in the junior mining
    stocks are very nearly the exact
    opposite of mining Majors they tend to
    have little Capital short histories and
    high hopes for huge returns in the
    future a junior company is essentially a
    smaller or newer company that is
    developing or seeking to develop a
    natural resource deposit or field
    for the juniors there are three possible
    fates
    most common is a failure which leaves a
    hole in everyone’s pocket including that
    of the banks and investors the second
    fate occurs when a junior has enough
    success to justify a major paying a
    decent premium to gobble it up leading
    to decent returns all around
    and the third and most rare fate a
    jimier finds a large deposit of a
    mineral that the market wants a lot of
    it is a magical combination of the right
    deposit at the right time
    when this happens Juniors can return
    more in a few days than a major will
    return in years
    are you still watching my video so
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    regularly now move on towards the topic
    valuing major in junior mining stocks
    although majors and juniors are very
    different they are united by the one
    fact that makes all mining stocks unique
    their business model is based on using
    up all the assets they have in the
    ground the catch is that mining
    companies don’t know exactly how much is
    in a given deposit until it is all dug
    up the largest Mining Company in the
    world by market cap is BHP with a market
    cap of 180 billion dollars
    therefore the value of a Mining stock
    roughly follows the market value of its
    reserves with a premium paid to
    companies with long histories of
    successfully bringing those reserves to
    Market
    reserves are evaluated through
    feasibility studies
    these studies independently verify the
    worth of a deposit a feasibility study
    takes the estimated size and grade of
    the deposit and balances it against the
    costs and difficulties of extracting it
    all
    if the deposit will fetch more money on
    the market than it costs to dig up then
    it is feasible different risks different
    Rewards if a mining major has hundreds
    of deposits staked or being mined the
    contents of any single deposit aren’t
    likely to shake the stock value too much
    a major is the sum of all the deposits
    with the aforementioned Goodwill tied to
    history a change in the market value of
    a mineral that makes up a larger
    percentage of the deposits will have a
    much larger effect than a new deposit or
    fail deposit
    a junior Mining stock lies or dies on
    the results of its feasibility studies a
    junior Mining stock typically sees the
    most action leading up to and
    immediately after a feasibility study if
    the study is positive and the value of
    the company May shoot up the opposite of
    course is also true often a junior minor
    won’t mine a feasible deposit to the end
    instead they sell the deposit to a
    larger Miner and move on to search for
    another one in this sense Junior mining
    stocks form an exploration pipeline that
    feeds the major miners in the end in
    this view the big risks and rewards
    mostly reside at the junior mining level
    I hope now you understand everything
    about mining companies but I know you
    have some questions in your mind like
    how to invest how do I buy gold mining
    shares do mining companies pay dividends
    if you have these types of questions in
    your mind so stay tuned into the video I
    will explain one by one
    choosing how to invest as an aspiring
    mining investor you’re probably
    wondering whether you should invest in
    junior mining stocks or major mining
    stocks the answer depends on what you
    are looking for juniors have the
    potential to offer a lot of appreciation
    in the right Market
    this makes them an ideal destination for
    risk Capital but hardly the best place
    to put your Social Security checks
    if you are looking for a lower risk
    stock with the potential for dividends
    and some decent appreciation then major
    mining stocks may be for you
    how do I buy gold mining shares to
    purchase gold mining shares you can
    invest in the stocks of gold mining
    companies or the royalties as well as
    gold mining exchange traded funds and
    mutual funds as with any investment
    carefully evaluate the instrument such
    as the financials of a gold mining
    company and the prospectus and fees of a
    fund
    our mining stocks considered growth or
    value stocks
    mining stocks can be either growth or
    value stocks Junior mining stocks are
    considered growth stocks because they
    are in the beginning stage of mining
    where they need to discover a specific
    commodity in the ground mine it refine
    it for sale and sell it these are higher
    risk stocks but the upside potential can
    be great major mining stocks are value
    stocks as they are companies that are
    firmly established in the sector do
    mining companies pay dividends yes some
    mining companies pay dividends not all
    mining companies pay them however
    typically the larger more established
    mining companies known as the majors pay
    dividends the smaller less established
    mining companies known as the Juniors do
    not pay dividends these companies
    reinvest earnings back into the company
    to fund growth the bottom line This is a
    primer and as such suffers from being
    overly Broad and simplistic before you
    invest in the mining sector you should
    probably know what Greenfield
    exploration is as well as how to
    estimate the impact of pricing risk and
    be able to hold forth on the dangers of
    buying on a single positive assay
    if you are interested enough in mining
    to do some research then there is
    probably room in your portfolio for both
    mining majors and juniors for those who
    would prefer to get investing exposure
    to the greater mining sector there are
    several mining related exchange traded
    funds and mutual funds available that
    could be added to your portfolio
    I hope now you understand how you can
    invest in mining companies so that’s it
    for today and if you will find my video
    valuable so don’t forget to like And
    subscribe we will meet again with
    another interesting topic till then stay
    safe and stay happy

    Are you interested in investing in the mining industry? The world of mining investments can often be daunting for beginners and those who are new to the investment landscape. Fortunately, with some guidance and an understanding of the industry, you’ll soon be ready to make your first investmentsdd! In this video, we will provide a comprehensive guide on investing in mining companies as a beginner.

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