Picking Junior Stocks: Management Team

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When looking at junior stocks, one must develop filters. We recommend looking at junior stocks based on four important measures: sector, management team, stage of development, and deal structure. Order of importance is up to the individual investor. This is the second post in a series of four that addresses the above four topics.

Management teams always look good based on first appearances. However, two skills set strong management teams apart from weak management teams.

Exploration Ability

To a high degree, exploration is driven by fate. Just because someone found a good project last year does not mean he or she will find a good one this year. Still, some management teams have more skill than others. Any management team that has already found two good projects is probably working off of skill and not luck. However, the best thing we ever heard from an old hand in the game is every successful mine has 30 single parents.

Ability to Manage the Treasury

Managing the treasury means the management team is skilled at mining the stock market as well. Some junior companies spend all their time looking at rock and fail to deliver results because they finance at the wrong times and do not develop the right financial relationships.

We like to see a combination of a good exploration guy or gal and a strong financial team. Exploration can be driven by one good person. Treasury management, however, requires a strong person with the ability to develop an IR team that delivers results. For good treasury management, there must be one to two influential people supporting the stock.

When in doubt, pick up the phone, call the management, and have a chat.

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