My reason for targeting these typically small companies was simple. It was due to my now time tested and proven belief that the better enterprises within this group would most profit from an important rise in gold.

Initially, it seemed obvious that the major and secondary producing companies would directly benefit from a higher price for the noble metal. This would result because they would sell their gold ore at increasingly higher prices which would bestow them with greater profits. However, I believed that an exploration company that either acquired or was on the path towards defining a important ore body would attract far greater attention. It would arouse the imagination of investors! This in turn would bring the necessary buying that could drive its share price higher, and greater reward its shareholders than would the well-known, established companies. Thus my search began for those few companies that would help me not only prove my theory, but would also reward me for my foresight.

During the 1970's there were few junior gold exploration companies from which to choose. Importantly, most of the best exploration geologists were firmly entrenched in the employ of a major or a secondary producing company. This left a paltry few to even consider working with a junior company that was financed on a shoestring. Further, there was limited information available about these small stocks, and the overall ability of their management teams left much to be desired. These conditions progressively and dramatically improved from the late1980's through the 1990's, and set the stage for the great mineral exploration investor opportunity that is available today.

When gold's first great Bull Market ended in1980, worldwide gold exploration began to decline. It became so drastically curtailed that by the mid-late1980's, the major mining companies began to reduce their geological staffs. This resulted for the first time in the availability of numerous geologists to the junior market. Many were individuals who were instrumental in earlier major gold or other mineral discoveries. These professionals were in search of employment and some found themselves in the director's seats of some small, little-known companies.

After the late 1980's, the number of resource companies and the availability of exceptional geologists continued to escalate. Between 1993 and 1996, gold experienced a major price rise. However, subsequent to gold posting its $420 peak in1996, the damaging and seemingly interminable decline that ensued witnessed even greater lay-offs among the gold producers.

When the smoke cleared, and after gold probed its $255 double bottom low in 2001, a large number of seasoned, successful exploration geologists had shifted positions. They were fired from the major companies for which they may have been employed for decades, and were manning the helms of various junior companies.

The two-decade Bear Market in gold was accompanied by similar declining markets in the various base and other precious metals. This factor forced numerous extraordinary geologists from the world's major mining companies to seek new forms of employment. The end result was the first availability of many extremely competent explorers, with expertise across the mineral spectrum, to the junior mining industry.

After 1996, an additional contingent of the world's best mining people found their way into junior companies. This time, however, it was due to their belief that they could transfer their abilities, for which they made billions of dollars for their former employers, to their new companies. They envisioned their ability to directly and greatly benefit from any success in their new roles. Instead of making a maximum of a few hundred thousand dollars a year as employees of a Barrick, a Newmont, or a Placer Dome, they could make fortunes for themselves and their shareholders, if they again did what they did best and made a new mine.

In my determination to ferret out the junior gold companies that offered the greatest profit potential I learned many lessons. It was a costly learning process! I found how enormously difficult it was to find competent and straightforward management teams. It was easy enough to learn of companies that had great "stories". However, I found that it was extraordinarily difficult to find those that had a great likelihood of actually delivering the goods.

Through my encounters I met more than a few individuals and groups that "talked the talk", only to later find that they had other agendas. They were more interested in talking up their companies in order to sell their stock to investors, rather than being devoted to finding a mine. After learning much from these and other experiences, and having left much of my investment capital behind, I began to better understand this potentially highly profitable but pitfall-ridden industry. I learned what to look for in a junior mining company that would increase my chances for success, while allowing me to avoid many of the dangers.

The first and most important lesson that I learned was that the people running these companies are the most important factors for success. While there are thousands of geologists involved in the industry only a small handful, possibly a few percent, will ever make a mine. And, it is not unusual for one individual to be instrumental in numerous discoveries that lead to mines. I believe that this is because certain exploration geologists have, for lack of a better term, a sixth sense. They seem to intuitively understand the processes that nature goes through in creating and depositing an ore body. Further, they have the ability to recognize the confluence of geological and other conditions that indicate the existence of such a potential, that will be overlooked by lesser geologists.

Next on my list is the ability to raise capital to fund their advancement. If a company cannot raise sufficient working capital it has little chance for success! They may have an outstanding project. Yet, it will languish if they cannot finance the necessary work to move it forward in its development.

Promotion is a dirty word to many people! However, in this industry it is truly a necessary evil. This is not to suggest that either unethical or illegal dissemination of information should be condoned. I am referring to professionally designed "market awareness" programs. It is unfortunate, but in order for a company's share price to attain a sufficiently high price commensurate with the value of its projects, the public must know its attributes. We as investors cannot intuitively sense whether a company is overvalued or is working on a great project. We must first be made aware of its existence, and then learn the details of its assets to recognize its potential.

In this industry it doesn't follow that a company's share price must reflect its underlying value! There are far too many stocks for even the most dedicated and driven analyst or investor to follow. This creates a condition where many companies are overlooked and undervalued. For this reason, I believe that it is mandatory for a company to contact investors and get the word out. In this fashion buying will enter its market and hopefully move its price to a fair value.

If a market awareness program is properly performed it may allow the company to execute an equity financing at a higher price than would otherwise be the case. The result will be less stock dilution, where fewer shares will have to be issued. This in turn will render the existing ones more valuable.

The final major factor that separates the finest potential junior exploration companies from their competition are their projects. I am discussing this last because these will typically be acquired by the industry's best management teams. When a major gold producer desires to joint-venture one of their projects with a junior it will consider those that possess the finest people. Similarly, the best projects typically find their way into the hands of the groups that have the greatest likelihood for advancing them towards production.

I have attempted to detail the factors that a junior mining company must possess in order to have the greatest possibility for achieving success. I must stress that the people leading these companies are far and away their most important attributes!

Not only are the finest management teams the most likely to make a mine, but they will also attract the best projects as well as the financing necessary to move them towards their goal. In this industry as in most, the people are indeed everything!

The great difficulty, and near impossible task for the novice, is separating the best from the rest. I use the factors described above and my experience whenever I search for junior companies to feature in Financial Insights. Hopefully, I have helped the reader to better approach this market and to be fortunate enough to gain similar success as I have.