Inequality In Gold Juniors Means A Golden Opportunity

Over six months, the top quartile jumped an average of +17.0% in score. Meanwhile, our poorest scorers dropped an average of -30.3%. Same goes for cash and G&A, as two example metrics. The best companies had their average G&A barely change from 39.9% to 40%. Meanwhile the poorest went from 90% to 94%.

On the cash front, the top scorers did drop from $3.4m to $2.6m, but the poor scorers dropped much more significantly on a percentage base. They averaged $108k six months ago and now average a paltry $31k cash position. These bottom tier companies are low on funds, cannot raise, and many have already tried rolling back.

Some of these companies have less than your average pay cheque in the bank and will be delisted soon. (Or maybe they will switch focus to medical marijuana and attempt a raise?)

This inequality in the sector will be the new normal for awhile, as hurting companies move towards bankruptcy or irrelevancy. The beautiful thing is: right now this rift makes it easier to spot which companies have good balance sheets, great management teams, and wont turn on investors even in tough financing conditions.

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