A One-Stop Guide to Investor Relations

By Gold World Staff
Wednesday, February 18th, 2009

Gold prices are quickly on their way to breaking another all-time high this year.

And an expected parabolic rise in investment demand will throw the gold bull market into the long-awaited mania buying phase, which should last between 6 and 12 months and could push gold prices as high as $3,000 to $5,000 an ounce, maybe higher.

That means right now is the time to start seriously researching and buying back all those quality junior gold stocks that have collapsed over the past few months.

How To Pick the Right Junior Gold Stocks

The best place to start research on a company is its website. There, you'll generally find most of the information that you need. However, more often than not, you won't be able to find all of the detailed information. And that's when you need to call the company's investor relations department.

Investor relations for junior gold companies are sometimes one or two in-house employees of the company. Other times investor relations is contracted out to a third party. Or sometimes it will be a member of management. And sometimes there is no formal investor relations at all; sometimes investor relations is just whoever picks up the phone...

"uhhh...yeah...sure....this is investor relations"

In whatever form you find investor relations, they should be able to give you all of the most up-to-date information. Or they should at least be able to tell you where to find any information they don't have.

To help you get the most out of speaking to investor relations of junior gold companies, Gold World has made a basic list of questions that you should be sure ask.

The questions can be separated into three general topics: Corporate, Projects, and Capital.

Corporate

• How did the company get started?
• What are the company's near-term, mid-term, and long-term goals?
• How much experience does the management, board of directors, and technical team have in achieving the company's goals? Is there a past history of success?
• How does management plan to market and promote the company? Does the company plan to go on road shows? Do they plan to do newsletter, magazine, or website advertising?
• How much of experience does management have in promotion?

Projects

• How many gold projects does the company have? Are all of the gold projects considered assets?
• Where are they located? Are they located in geopolitically safe regions? Are they easily accessible? Is there a labor force nearby? Is there easy access to power and water?
• What stage is each property in: Grassroots? Exploration? Development? Production?
• For grassroots stage projects, why does the company wish to pursue exploration? Has there been any historic evidence of gold on or near the projects? What does the company have planned for the future of its grassroots projects?
• For exploration stage projects, what kind of exploration progress have been made so far? How much has the company drilled? What have been the results? What kind of exploration is planned for the future? Is there currently a resource estimate? Will there be one in the future?
• For development stage projects, what is the status of development? When will the project become a gold producing mine?
• For production stage projects, how much gold does the mine produce? What are the future production and revenue expectations? How long is the life of the mine?
• What is the resource or reserve status of each property?
• What, if any, royalties are or will be due?

Capital

• What is the company's cash flow, if any?
• What is the company's cash position?
• Does the company have any debt? How much and what kind of debt does the company have?
• Will the company need to raise new capital for future projects? How much money will the company need to raise? How much experience does management have in raising new capital?
• How much capital will the company need to reach its 12-month goals? How will they get the money?
• What is the company's monthly burn rate? Are they being responsible spending it?
• How many shares of the company's stock are issued and outstanding?
• How many shares of the company's stock are there fully diluted? At what price are the warrants and options set?

This is not a stock-specific list, so these questions are best used as a guideline to form your own questions for investor relations.

This is also not a complete list, but should definitely be enough to get you started. If you like a company's answers to the questions above, it should be more seriously considered as a position in your junior gold stock portfolio.

Good Investing,

Luke Burgess and the Gold World Staff