Matt, before you jump in and buy some penny dreadfuls, consider this.
There are a couple of thousand companies all searching for payable deposits. Only a handful will make it to a working profitable mine.
A searching speccie company will issue notices to the market about results.
"Promising rockchip results....) "Sample drilling shows visible mineralisation...." "Neighbouring tenement has had a fantastic result and we consider that our ground will be similar...."
The company spends (burns) money on geologists, surveys, drilling, assaying and management. They run out of money and then ask shareholders for more money to continue searching in their promised land. Eventually, the company has millions of shares all at a few cents each. Company runs out of positive news, cannot raise any more money from shareholders and goes broke. Your shares are worthless.
Or, you have picked a winner, the share price slowly increases, but the company will keep asking for money to develop up JORC's, prefeasability plans, mining plans and finally construct the plant.
The company that you buy, will you pick a winner?
Be very very very wary about posts on forums. Most are rampers. They bought cheap, they talk the stock up, they then dump at a higher price. They work in teams, with many people posting great news. The losers will be the newbs that get excited at the fantastic prospects the rampers spew out at a great rate.
Buy low, sell high.
When buying a parcel, do the maths. You have to buy at least $500 of shares. Say at 5 cents, brokerage in and out is $20 each way, $40. 10,000 shares at 5 cents plus $0 bokerage, you have to sell your parcel at 5.4 cents just to break even. Keep in mind that many spec shares are very non liquid, it may take forever to reach the 5.4 cent mark. Meanwhile your BHP shares are up 10%, you can sell them any day of the week.
