Interesting question really. I suppose they ALL rely on shareholders and cap raises to get started. There are genuine examples out there that have gone on to become the real thing - FMG comes to mind. Another one was Galaxy. I was going to buy in at 6c - and their high a while back was $3.60. Of course they have come back a long way now to $1.30 or so. I haven't followed so don't know the story.
All I'm saying is there are genuine spec miners out there who do intend to create wealth. However... and as and I think you have said many times, the odds are not in your favour at this end of the market. Most don't make it - even with genuine intent. And I suspect many are run quite callously to create income for directors while they go through the motions of getting a mine up and running. Win or lose they still earn a healthy salary, and many have more than one directorship. I know of one outfit who have been supposedly attempting to get a nickel mine up for years where the CEO makes close to a million annual salary and has not yet shipped so much as a bucket of ore. When I read about the conflict of interest of some - such as having a foot in the financier's camp and the other in running the company.... well, let's just say you are not high on their priorities.
How do you tell the difference between the real thing and the 'director's lifestyle' companies? I'm not sure... but I do know I have certain red flags I would look out for now. That's if I was going to gamble more money on a speccy. It IS gambling to begin with, you only get to call it investing when it actually makes you some money. So treat it like that - don't put more in than you are Ok with losing.
OGX Price at posting:
0.3¢ Sentiment: None Disclosure: Held
