silver standard is the rare junior mining company that makes it all the way to production. next year it will become a mid-tier producer (10+ million ounces) while many of its peers have fallen by the wayside. this is the great advantage of being first, buying up the best properties in the americas when no one else wanted them, and now having the most robust projects. meanwhile, many of the juniors won't survive, and those who do may end up loaded with debt or suffering dilution.

Where do we go from here and when does the market for junior mining stocks recover? Unfortunately for shareholders, a majority of the companies will never recover. Many are out of cash and have no prospects for additional equity. These will slowly fold and their only legacy will be as historic drill results. Some companies have developed bankable assets and might secure some type of debt financing. The process will be slow and painful, much like mortgage foreclosures. Many cash strapped companies are now in “hunker down” mode. It appears that “hunker down” is mining terminology for “stop all operations and cover G&A as long as possible." When their cash is depleted, many of them will also fold.

Unfortunately, even some of the best juniors failed to focus their resources on a flagship property and advance it into an actual development project. Easy capital enticed them to build a “pipeline” of properties more appropriate for larger companies. Investors were easily swayed with this “irons in the fire” business model. Today the market is seeing these undeveloped properties for what they are, liabilities not assets. There are a few that were smart (and lucky) enough to advance a project that is truly developable. These will receive additional equity, albeit at substantial dilution to existing shareholders. Others will proceed, without shareholders, as debt holders take over the projects. Some will merge. But, mergers won’t bail out existing shareholders as few premiums will be paid in the consolidations. Even the companies with projects nearing production are finding it difficult to finance construction in the current market. Companies with once profitable poly-metallic mines are being forced into “care and maintenance” at current base metal prices.

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