Market value of mining exploration companies listed on AIM London

Abstract

Exploration projects are a specific type of projects that are very time-consuming in the first phase. They also require a large amount of investment outlays, which makes them less attractive on stock exchanges, which are largely based on speculation. Searching for investors in this type of environment requires a precisely described history of the deposit - treated as an exploration project. The characteristics of alternative markets show that the form of their financing plays an important role in the approach to the valuation of companies. Junior mines companies, due to their innovative nature, are looking for various types of financing, ranging from raising capital from subsidiaries to the issue of shares on alternative markets - however, this applies to the largest exploration companies. Each of the above-mentioned elements - sources of financing, investment risk, long payback period - is a significant contribution to the final valuation of the company's market value. An additional, very often the most difficult element of the valuation is the economic estimation of the know-how developed in the area of exploration, which very often determines a competitive advantage on the market.