If you are anything like me you find the mineral exploration business captivating but frightening. I don’t know of anything else in the business world where people have more desire to be involved, with less knowledge of what they are getting into. Now I don’t say that to insult anyone and I know that the folks reading this are among the better educated investors, but let’s be honest here, this is a tough industry to understand.
If you are investing in just about any other industry you are able to look at past profits, current earnings and forecasts of future earnings. You would never dream of investing in a company without looking at the financial statements. However from my experience in the mineral exploration business I know that most investors do not even look at the financials before they invest in a company. And why is that? Well, pretty much everyone understands that the company is going to be losing money because it’s in exploration so they don’t see any reason to bother looking at the financials.
Therefore, when your friend or broker points out to you that there is a particular stock you should be having a look at how do you go about evaluating it? Sure you can call the company, and sometimes even find someone to talk to, or, you can check out their web site, but do you really know how to evaluate the company from those two sources? Do you understand the lingo they are throwing around and do you know the relevance of the figures and data they are giving you?
Simply being told that they have X grams of gold over X number of metres will not mean anything unless you much more information. It would be like being told that a sports team won 15 games over the season without knowing how many games they played overall. That would be a great record if they only played 16 games, but a terrible one if they played 80. So, when the company tells you how many grams (or ounces) over how many metres do they explain the context? Do they give you an idea as to how valuable that result really is?
Well, both fortunately and unfortunately when it comes to news releases, the publicly listed Canadian Junior mining corporations are actually pretty limited in how much they can enlighten their investors. When a company puts out a news release all they are really allowed to do is give you the facts, they cannot interpret those facts for you or put them in context.
Why is this both fortunate and unfortunate? Well, the ‘fortunate reason’ is that it prevents companies from irresponsibly leading investors to conclusions the facts don’t really support; however, ‘unfortunately’ at the same time it prevents companies from putting numbers in context for their investors and helping them really understand what the news means to them.
For example, if a given company were to contrast or compare their results with those of another company an investor could be forgiven for thinking that the value of the results, and perhaps the value of the entire discovery, should be exactly the same, whereas in actual fact no two deposits are ever exactly the same. The company releasing the news was no doubt only trying to convey the general idea that their results have some great potential, not trying to say that they will ultimately have the same deposit as their neighbours, but unfortunately, within the constraints of a news release it is easy to go too far and give people the wrong impression.
Accordingly, companies are seriously restricted in what they can say in a news release. But what about other sources of information from the company, or actual conversations with company representatives? What can be said through these information mediums?
One of the points that must be kept in mind by exploration companies is that the folks reading their corporate material often have a strong emotional connection to the results of an exploration program and therefore may be inclined to build much more into a sentence or scrap of information then what was intended or could logically be deduced. Let me emphasize, this is not a disparaging remark toward the investor; this is a completely human tendency and applies to all manner of life situations. The oft repeated statement “people hear what they want to hear” totally applies in this situation. For this reason I believe that the onus is on the exploration company to be very careful in how they explain their results in their ‘after the news release’ communications.
Being investors ourselves the team at International Millennium wishes to respect this dynamic, and, at the same time, ensure we are providing timely information that will educate and inform investors. Toward this end International Millennium Mining Corp has designed an information dissemination program that will utilize various Social Media to inform and educate investors in a timely fashion.
The Company will be issuing commentaries on material news releases (on the same day as the release) that explain implications and provide context. A Blog feature has been added to the Web Site that will host the commentaries, along with educational articles and non-material news. We will use Twitter to direct investors to news releases, relevant industry articles, blog entries and Facebook updates. Additionally, Facebook and LinkedIn pages have been created for IMMC to make it easier for investors to follow the Company and keep up-to-date.
All this will allow investors, current and potential, to properly evaluate this company: to put into context property holdings and exploration results. We will be diligent in providing information that allows investors to reach their own conclusions rather than serving up conclusions for them.
Web Site:
www.immc.ca
Blog:
http://www.immc.ca/index.php/blog
Facebook:
https://www.facebook.com/pages/International-Millennium-Mining-Corp/277522958965623
Twitter:
https://twitter.com/#!/MiningCorp
LinkedIn:
http://www.linkedin.com/company/international-millennium-mining
