Why Have Junior Gold Stocks Had Such Poor Investment Performance?

1. Flight Away from Risky Assets has resulted in the majority of investors shunning investments in high risk junior gold companies.
2. Much of the Investment Capital For Gold Companies has been siphoned off into Gold Exchange Traded Funds rather than the individual gold companies.
3. Hedge Fund Liquidity Problems have forced Hedge Funds to liquidate many assets, including junior gold stocks, to raise cash.
4. Too Many Juniors in the Market – the Market is Bloated and Will Have to Undergo Significant Consolidation.
5. Disarray in Financial Markets has created too much uncertainty - as a result investors are unwilling to make investment commitments.
6. Market Illiquidity in the juniors - makes it very difficult to trade stocks in this sector.
7. Number of Experienced Geologist, Drillers, and Other Mining Personale is Limited. The fact is that there just aren’t enough qualified people to run successful explorations operations for over 1,000 junior exploration companies.
8. Shortage of drilling rigs and experienced drillers has limited management in pursuing aggressive exploration activities.
9. Lack of few major gold discoveries my junior gold exploration companies is the past couple of years.

Given the facts above, your success in investing in junior exploration companies will largely be a function of your ability to uncover junior gold companies that have uncommon value. Listed below are the types of companies in that sector that will provide you, IMO, with the greatest probability of making money:

1. Talented Investment Management Team that has a proven track record of finding gold.
2. Companies that are already in production or near production – these are the companies that the major gold producers are going be interested in acquiring so they can grow their gold reserves. Today, gold production in going down for most large cap gold producers – they simply haven’t had sufficient drilling success to replace the assets that they have been depleting each year.
3. Companies that have substantial land packages that are located near other producing mines, or mines that were closed years ago due to low gold prices.
4. Companies that have access to capital from large cap producing gold companies to fund multi-million dollar development projects. With today’s credit and liquidity crisis going on, you are going to have to have connections with the larger companies that have already created large credit lines or cash resources.
5. Companies that have access to drilling rigs and experienced people to do the drilling.
6. Companies that have a good marketing plan to increase shareholders values.

· Road shows

· Participation in Investment Conferences

· Up-To-Date Web Site that provides investors with the information they need to make an informed investment decision.

· Analyst meetings

Frequent press releases to keep investors up-to-date as to current and future drilling plans.