From Casey Research.com, you can listen or read Louis James give an outstanding interview by kungfufinance. This is a tiny portion but the whole read is excellent and very fitting for the board, IMO.

“A junior company is just a smaller company. The good thing about the juniors is that they are subject to the volatility we discussed with the mid-tiers, but even more so. That means if you can buy a good quality junior when it is on the lower end of its trading range, and then there is great news that a new deposit or something has been discovered, and gold is up or something, these things can go screaming up, not just double, but they can go up ten times within a couple of months. This sounds really extreme to a mainstream investor who is happy to get double-digit returns. To think about a thousand percent gain – it sounds like some kind of marketing ploy, like I am trying to sell you something. “Wait, don’t order now!” But it is true. This really does happen.

Think about the logic. If you are Newmont Gold, one of the bigger mining companies, you produce eight million ounces of gold a year, or something like that. Eight million ounces of gold is a lot! Very few gold deposits even have a million ounces. And some of the huge monster gold deposits out there might have eight or ten or more. There are very few large ones. Anything in the ten million ounce range is considered a monster gold deposit. That is really huge and really rare”

“We congratulate you for your Kung Fu metaphor. This is perfect. This is exactly how investors should think. You have to be able to take a few hits if you are going to go into this. You have to have discipline. You can't blink. You can't back down. You need to think about your plan and make a realistic plan that is in accordance with your investment goals and your weaknesses as well as your strengths”.

“If you know that you can't stand seeing a stock go down after you buy it, you need to have a very different strategy than somebody who can jump and say, “Yay! My favorite stock is on sale,” and buy more, right?”

“But OK, let’s talk about tranches a little bit. Your mileage may vary and your risk tolerance is going to vary the way you do this. You can adapt it for yourself. Our starting point that we recommend to people is that they start with buying 20% of their ideal position. It sounds like very little –20% is not that much!

But remember; most of these stocks are highly volatile. Most of them will go down, lower than you paid for it. Every once in awhile, a stock will just take off. You got in just in time. It is off to the races and 20% of your ideal position isn't much in that case. But that is actually rare, and at least you got something. You get a win. Most of the time, that doesn’t happen. The stock fluctuates, so you prepare for the next time it retreats five or ten percent, which is very common in these juniors (ten percent sounds like a big drop in value to a mainstream investor, but for junior investors that is an afternoon’s cup of tea; it happens all the time). When that happens, you buy your second tranche: another 20%.

Now you have 40% of your ideal position which is a respectable amount and it is at a lower price than the price you liked it at in the first place, so that is good news. You used the volatility to lower your cost basis. Now you are happy. You have a bigger position, almost half of what you would ideally have, at a lower price than the one you liked in the first place. Then you sit tight. You have your stake in the ground as it were.

Now, if the market takes off and it is off to the races, you have a more substantial stake and you win more. But sometimes 2008 happens or sometimes what we think is going to happen in 2012 happens and everything goes on sale at fire sale prices. Well, then you come in with your 60% tranche.” Etc.