This was published as a 3-part series in November 2026. It is version 1. We will update it over time, correct, augment, adjust.

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Junior Resource Lexicon JH08

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Junior Mining Lexicon Pamphlet--PDF version 1

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Part 1: Speaking Rock

The ground and the paperwork.

The Rock

Assay. The lab result. A sample goes in, a number comes out. Everything before the assay is guesswork, opinion, hope or hype, depending on who’s saying it. And the data, when they come, are often used to promote the guesswork, opinion, hope and hype.

Grade. Metal per tonne of rock: grams per tonne (g/t) for gold and silver, percent for copper and zinc. One gram per tonne of gold is a paperclip’s weight of metal in 1,000 kg (a metric tonne, about 2,205 pounds) of rock.

Intercept. A stretch of drill core with enough target metal to brag about (or at least bother to mention), reported as “X meters of Y g/t.”

True width. The actual thickness of the mineralized zone, as opposed to the distance the drill happened to travel through it. A hole drilled down the length of a vein produces a spectacular intercept that may be worth little. If the release omits true width, ask why.

Cutoff grade. The grade threshold used to decide which material gets included in a resource estimate or mine plan, given specified technical and economic assumptions. Lower the cutoff and the reported resource may grow, but the additional material may be uneconomic to mine and process, especially if metal prices fall or costs rise.

Recovery. The percentage of metal the mill can pull out based on metallurgy/testing. Metal the rock won’t surrender isn’t going to turn into cash.

Circuit. The sequence of equipment the ore passes through in the mill: crushing and grinding, followed by recovery using gravity, flotation, or leaching. A gold mill might use gravity to capture coarse gold, then a carbon-in-leach (CIL) circuit, where cyanide dissolves the gold and activated carbon captures it from solution. Every additional processing step adds complexity and may add capital and operating costs. It may also improve recovery. A conventional circuit can reduce technical risk; an unusual circuit may introduce another thing that has to go right.

Strip ratio. Tonnes of waste moved per tonne of ore in an open pit. Lower the better. A high strip ratio can be more of an earthmoving enterprise than a mine.

Oxide vs. sulfide. Near surface, weathering oxidizes the rock, and oxide gold is easy to process. Deeper down, sulfide ore needs grinding and often flotation or more. Many deposits are oxide on top and sulfide below, and the economics change at the boundary.

Refractory ore. Gold locked inside sulfide minerals where cyanide can’t reach it, or ore laced with carbon that grabs the dissolved gold before the plant can (“preg-robbing”). Freeing it takes roasting, pressure oxidation, and other methods, all of which add expense.

Heap leach. Crushed ore stacked on a lined pad (a very big lined pad!) and sprinkled with dilute cyanide solution that dissolves the gold over weeks or months. Commonly used for oxide ores.

Nugget effect. Coarse gold scattered unevenly through the rock, so two samples a foot apart can assay wildly differently. Deposits with a strong nugget effect are hard to estimate and easy to oversell.

Visible gold. Gold you can see in the drill core. It makes a fine photograph for a news release.

Grab sample. A bit of rock a geologist picked up that looked like it might hold a lot of metal. It has slightly more meaning than that. But only slightly.

Metal-equivalent grade. Several metals converted into one number, such as gold-equivalent (AuEq) or copper-equivalent (CuEq), at prices and recoveries the company chose. Useful for comparing projects. Also a convenient place to hide a weak primary grade.

Greenfield vs. brownfield. Greenfield exploration hunts where no mine has been. Brownfield exploration hunts near existing mines or old workings.

Deposit types. Porphyry deposits are huge, low-grade copper-gold or copper-molybdenum systems that need billion-dollar mines. Epithermal veins form near surface from hot fluids and can be high grade and narrow. Orogenic gold forms along major faults in ancient mountain belts and supplies much of the world’s gold. Knowing the type tells you roughly what kind of mine is needed.

The Paperwork and the Data

NI 43-101. I love regulators. This is Canada’s rule for disclosing scientific and technical information about material mineral projects. Written disclosure identifies the Qualified Person responsible for the information. Drill-result releases have additional requirements, including reporting true widths when known. US SEC registrants follow Regulation S-K 1300 for mineral disclosure, while Australian-listed companies follow the JORC Code. The systems use comparable resource and reserve categories.

Qualified Person. An engineer or geoscientist with at least five years of experience relevant to the deposit type and the work being reported, in good standing with a recognized professional association. Some reports require a QP independent of the company. When the QP is also the company’s VP of Exploration, there is going to be some bias, some malincentive, some concern. But it’s common.

Resource vs. reserve. A mineral resource is a concentration of mineralization estimated from geological evidence and sampling, with reasonable prospects for eventual economic extraction. Resources are classified by geological confidence: inferred (least), indicated, and measured (most). A mineral reserve is the economically mineable portion of a measured or indicated resource, after applying the relevant mining, metallurgical, economic, environmental, and other modifying factors. A pre-feasibility or feasibility study must support the determination. Measured resources can become proven or probable reserves; indicated resources can become only probable reserves. Inferred resources can’t become reserves at all. Inferred ounces are mostly hope. Proven and probable reserves are used for planning a mine.

Historical estimate. An estimate made by a previous owner, often before NI 43-101 existed, that no Qualified Person has since verified as current. A company may mention it with a disclaimer but can’t treat it as current. A historical estimate tells you where to drill, but not the value of the rock.

PEA, PFS, FS. Preliminary Economic Assessment, Pre-Feasibility Study, Feasibility Study. Each one provides more confidence than the previous. A PEA may be based just on inferred resources, but comes with a big caution. The feasibility study is a key determiner of the mine build decision and the funding needed for it.

Part 2: Speaking Junior Resource Finance

The money, the deals, and just a bit about the taxman.

Until a mine is built, a junior has one product to sell: its own shares.

Part 1 covered the rock and the paperwork. This part covers how a junior raises capital, the terms it offers investors, and the tax complications that arise on either side of the border. Most of the deals we see are Canadian companies, so the focus here is there. I hope the Aussies and occasional Europeans forgive me.

The Money

Private placement. Shares sold directly to selected investors, usually at a discount, to fund the company’s next program. Maybe a PIPE (private investment in public equity). Most junior capital is raised this way, and it is where a speculator can buy at or below the market and get warrants as well. The early raises are pure speculation, raising money to convert hope into hope plus a treasury.

Accredited investor. A permission slip to partake in private placements. In the US, an individual qualifies with income above US$200,000 (US$300,000 with a spouse) in each of the last two years and a reasonable expectation of the same this year, or a net worth above US$1 million not counting the home, or by holding certain securities licenses. Canada’s tests run in Canadian dollars: net income above C$200,000 (C$300,000 with a spouse), financial assets above C$1 million net of related debt, or net assets above C$5 million. The US thresholds were set in 1982 and have never been adjusted for inflation. The premise is that wealth equals sophistication. It doesn’t.

Unit. The package sold in most private placements: one share plus a warrant, or a fraction of one. “Units at C$0.50 with a full warrant exercisable at C$0.75 for two years” means you pay C$0.50 for a share and the right to buy another at C$0.75 until the warrant expires.

CAD vs. USD. Most Canadian juniors report results, price placements, and set warrant strikes in Canadian dollars. Their US over-the-counter (OTC) tickers trade in US dollars. A US speculator therefore holds two bets: the stock and the exchange rate. Gold and copper are priced in US dollars while Canadian salaries and diesel are paid in Canadian dollars, so a weak CAD fattens a Canadian producer’s margins and thins a US holder’s returns when converted home. For US taxes, each purchase and sale has to be converted to US dollars at the rate on the trade date.

Brokered vs. non-brokered. A brokered placement is sold through an investment dealer, who takes a commission, often 7% plus broker warrants. A non-brokered placement is sold by the company itself, sometimes paying a finder’s fee to whoever brings in the money. Brokered deals tend to be bigger, and more due diligence is applied. Non-brokered deals tend to be cheaper for the company, with less disciplined analysis undertaken by those who invest.

Bought deal vs. best efforts. In a bought deal, the dealer buys the whole offering up front and carries the risk of reselling it. Dealers buy only what they’re confident they can sell, so a bought deal says something about demand. In a best-efforts deal, the dealer sells what it can.

Warrant. The right to buy another share at a fixed price before a set date, often attached to a private placement unit. It represents a potential dilution for existing shareholders, and potential funding for the company. Unlike buying shares on the open market, exercising a warrant puts money directly into the company treasury. Some warrants trade in markets. Most don’t.

Acceleration clause. A warrant term that lets the company shorten the warrant’s life if the stock trades above a set price for a set number of days. Holders then exercise or lose the warrant. The company gets its cash early. You lose the remaining time value of the warrant.

Hold period. In Canada, most private placement shares can’t be resold for four months, although some shares carry no hold at all: shares sold under a prospectus, a LIFE offering, or a rights offering, and shares from a warrant exercised more than four months after the warrant was issued, since the clock starts on the warrant’s issue date. US buyers face a separate US restriction: a year under SEC Rule 144 for most Canadian juniors, or six months if the company files reports with the SEC. Once the Canadian four months pass, a US holder might be able to sell on the Canadian exchange through a Canadian broker (if he has one) after some paperwork to remove the restrictive legend. Prices can sag when the hold expires. There is no guarantee—none whatsoever—that the stock price will be, four months or a year hence, above the private placement price. That will depend on the market as a whole and any catalysts/milestones that the company plans and accomplishes in that period. Often there are none.

LIFE offering. Canada’s Listed Issuer Financing Exemption lets a listed company raise money from the public with free-trading shares (in Canada) and no hold period. Most anyone can buy, accredited or not. A US buyer still needs a US exemption, and his shares are restricted under US law.

Rights offering. The company offers new shares to its existing shareholders first, in proportion to what each owns.

Fully diluted shares. Shares outstanding plus every option and warrant that could become a share.

Burn rate. Cash spent per quarter. Divide the treasury by the burn rate to help predict the next required financing. Is the company blowing money on unnecessary overhead? Is management paying themselves well with your money while they do diddlysquat? Will there be a catalyst reached to (hopefully) increase the value of the current shares before the next raise?

Dilution. What happens to your slice when more paper is sold and the pie is cut into more pieces. Every junior dilutes. The question is whether the dilution buys ounces in the ground worth more than you lose from dilution.

NSR royalty. Net smelter return—a percentage of revenue paid to a royalty holder off the top, profit or no profit. Junior miners offer it as a way to get control of land for cheap, or to get cheap money into the treasury today, but it becomes a permanent claim on revenue tomorrow.

The Deals

Strategic investor. A major miner or large fund that takes a stake, often 9.9% to 19.9%, frequently with the right to keep its percentage in future financings. Strategic money is a vote of confidence from people who read technical reports for a living. It can also be an exit in waiting. Getting such investments is good push for the stock price.

Insider ownership. How much of the company management and directors own. Shares bought with their own money, in the market or in a placement alongside you, are skin in the game, and they align management’s interests with yours. Options granted as pay are a free lottery ticket for management. They aren’t free for you: when exercised, they dilute your shares.

Rollback. A share consolidation: ten old shares become one new one. The share count shrinks and the price rises in proportion. Warrants consolidate too. A consolidation may be accompanied by the sound of warrant value being sucked into a vacuum.

Shell. A listed company with a ticker and little else, used as a cheap vehicle for reverse takeovers so that a new entity can become public with less hassle. The reduction in hassle comes at the cost of giving the shell’s current owners some of the potential future value. Shells that have a mine vended into them often become shells again, but with luck and skill, they can start producing.

Just a Bit on the Taxman

For Canadians (keeping in mind that I’m not Canadian)

Flow-through shares. Canadian shares that pass lucrative exploration tax deductions through to the buyer. Buyers pay a premium for the deduction, then sell quickly. Only useful for certain Canadians.

Charity flow-through. A Canadian structure that stacks two tax breaks. A high-income Canadian buys flow-through shares at a premium, collects the exploration deduction, then donates the shares to a charity and collects a donation credit as well. The charity often sells the shares at once, at a discount, to a buyer lined up in advance. The company gets the richest price of any tranche. US investors can’t use it.

Hard-dollar shares. The ordinary, non-flow-through shares in a placement, also called hard money. No tax deduction attached, so they price below the flow-through tranche. These are the ones US investors buy.

For US Persons

PFIC. Passive Foreign Investment Company. A pile of oppression by the IRS, wrapped in paperwork. A mass of stupidity the purpose of which is to screw you if they ever get an inkling to do so. A foreign corporation is a PFIC if 75% or more of its income is passive, or 50% or more of its assets produce passive income. Even though they weren’t the intended target of the IRS and Congress, many Canadian explorers fit this bill, since their only income is interest on their treasury. Making a Qualified Electing Fund (QEF) election in the first year you own a PFIC lets a later gain be taxed as a capital gain, if the company provides the annual statement the election requires. This is a complicated area of US tax law. We aren’t tax advisors. And we mean it when we recommend talking to your accountant. It’s best not to ask for any tax advice from me, because you’ll just get a rant.

Part 3: Speaking Vancouver

The economics, the market, and the method.

Parts 1 and 2 covered what’s in the ground and how a junior rounds up the currency to spend on finding it, delineating it, proving it and planning to extract it. This final part covers what a mine might be worth, what the market thinks it’s worth, and the method we use to judge. It’s the dialect spoken in Vancouver, where more juniors are run and promoted than anywhere else, and in Toronto, the center of Canada’s larger financial markets.

The Economics

A mining study—a preliminary economic assessment (PEA), a pre-feasibility, or a feasibility study—is a spreadsheet with a qualified person’s signature on it. Behind that spreadsheet are years of geology, engineering, metallurgy, and economic assumptions. These studies are essential to determining whether the rock becomes a mine. The market (or a partner) gets to see the company’s figures and decide whether to fund it.

NPV and IRR. Net Present Value and Internal Rate of Return—the study’s estimate of what a mine project is worth today and the annual return its cash flows imply. Both hinge on the assumed metal price. These are mine-specific measures, not valuations for a company with more than one project.

A dollar received later is worth less than a dollar in hand. To calculate NPV, each year’s cash flow is divided by (1 + r) raised to the number of years out, where r is the discount rate, usually (but not always) 5% for gold projects. So $100 million arriving in year five is worth $100 million ÷ 1.05⁵, or $78 million, today.

Example: a mine costs $300 million to build and throws off $100 million of cash per year for five years. Discounted at 5%, those five payments are worth $433 million today. Subtract the $300 million build cost and NPV is $133 million.

Studies report NPV both before and after tax. Some companies headline the pre-tax one because it’s bigger. Timing of the spending matters too.

IRR answers a different question that is akin to an interest rate (or rate of return) on the money invested. What annual return will the mine earn on the money spent to build it?

It is the discount rate (r) implied if the five annual payments, when discounted by r, are worth exactly the $300 million build cost. We already saw that with r = 5%, those $500 million of payments are worth $433 million today. But at r = 20%, they are worth about $300 million, which is the mine build cost. So the IRR is about 20%.

You can think about it like this: building this mine is rather like lending $300 million at 20% interest and being repaid in five equal installments. That is, if the mine works, if the assumptions remain, if a rebel force doesn’t blow it up, if a government doesn’t seize it.

IRR ignores size, though. A small mine with a 40% IRR can be worth less than a big one at 20%. NPV measures how much; IRR measures how efficiently.

Nudge the assumed gold price up and both NPV and IRR numbers jump. That’s the leverage of miners.

Always look up the assumed price deck the company used for its NPV/IRR calculation.

Payback period. How many years of cash flow it takes to recover the build cost. In the example above, three years. Shorter is safer.

Capex and opex. Capital expenditure (capex) is the one-time cost of building the mine. Operating expenditure (opex) is the cost of running it, per tonne or per ounce. Capex estimates have a habit of growing between the study and the groundbreaking. Partly this is early optimism. Partly it is cost increases from currency inflation.

A brief aside: when gold is pulled from the ground and put on the market, the gold supply is inflated. Gold miners’ job is to inflate. The critical difference between gold miners inflating the gold supply and central banks inflating the currency supply is that it takes work and risk to increase the gold supply. It takes nothing to create additional fiat currency. That is the profound moral failing that makes fiat currency so destructive.

Sustaining capex. The ongoing capital needed to keep a mine producing: replacement equipment, ongoing underground development, and tailings or infrastructure work needed to maintain existing production. It is the “sustaining” in AISC.

AISC. All-in sustaining cost per ounce: an industry measure of what it costs to keep an existing mine producing, including mining, processing, royalties, corporate overhead, and the capital needed to sustain output. Subtract AISC from the realized selling price per ounce and you have the producer’s AISC margin. But that is not net profit. Taxes, interest, non-sustaining capital expenditures, acquisitions, and the cost of building the next mine still have to be paid. The mine doesn’t necessarily send you the profit.

A producer whose AISC sits close to the gold price isn’t making a profit. It’s moving rock around.

Sensitivity table. The grid in the study showing how NPV and IRR move with metal price, grade, capex, and operating costs. If NPV turns negative on a small drop in the metal price, beware. If that drop arrives while the mine is repaying its construction debt, the lenders still get paid first. But equity holders take it on the chin, despite all the risk they took.

The Market

NAV. Net asset value: an estimate of what the whole company is worth on paper. Start with the net present values (NPVs) of its projects, add cash and investments, and subtract debt, the present value of corporate overhead, and any liabilities not already included in the project valuations. Divide by fully diluted shares and you have NAV per share. The company publishes its projects’ NPVs in its studies but NAV usually comes from analysts, who use their own assumed metal prices and costs, then discount the projects for the odds they won’t be built. Thus the same company can carry different NAVs.

P/NAV. Share price divided by net asset value per share. Explorers and developers trade at a fraction of NAV because most never become mines. Below 0.5 can be a bargain, but it may also be a reflection of lots of problems that others have noticed. Above 1.0, the market has already paid for success and is dreaming of more success.

Ounces in the ground. Tonnes of mineralized rock multiplied by grade, reported as contained ounces in a resource estimate. These are not necessarily recoverable ounces. They are the junior’s inventory, and the denominator in EV/oz. Beware: an inferred resource ounce a kilometer deep, in refractory ore, in a jurisdiction that hates miners, is worth a fraction of a proven reserve ounce in an open-pit oxide deposit in Nevada.

EV/oz. Enterprise value (market cap plus debt minus cash) divided by ounces in the ground. The quick way to compare explorers and developers. It’s what the market thinks the rock is worth. If peers trade at $50 an ounce and yours trades at $15, either the market missed some upside or you missed some downside. However, it is a crude comparison, because ounces in the ground come in various flavors: different resource categories, grades, metallurgical hassles, deposit types, and jurisdictions.

Lassonde Curve. A conceptual chart of a deposit’s perceived value over its life: a spike on discovery, a long slump through studies and permitting (the “orphan period” and “valley of despair”), then a second rise into production. Speculators make their money buying before the discovery, selling during the excitement of the discovery, and then again buying toward the end of the valley of despair just as the build decision is about to happen. For details, we have a full letter on the topic.

Liquidity. How easily you can turn shares into cash. First, whether you can sell at all: shares in a private company, shares still under a hold period, or a halted stock may have no sale available at any price. Second, how easily you can buy or sell without moving the price, measured by average daily volume and the bid-ask spread. Getting out of a large position in a thinly traded stock can take days or weeks, and the price sags while you do it.

Takeover premium. What an acquirer pays above the market price to buy a company, often 20% to 50%. Few juniors build their own mine. For most explorers and developers, a buyout is the happy ending.

Tax-loss selling. Year-end dumping of losers to harvest capital losses. Illiquid juniors fall for reasons unrelated to the rock. If you have capital to invest, November and December are often times to buy lowish when other people are selling lowish to take their losses. This is standard stuff for stocks of companies in the valley of despair, which have lots of potential future value, sure, but have immediate value now as tax losses.

Punt. A speculative bet made without your own due diligence, on the strength of a hunch, a hot tip, a promoter’s tout, or someone else’s homework. Size it like one: small enough that losing all of it hurts your pride more than your portfolio. Hopefully, the winners will pay for the losers. Best to punt only when the tip comes from someone you know well, who cares about you and has a record of tips that paid out. But it’s better to not punt, and instead do the 9Ps analysis.

The Analysis

Due diligence. The homework: reading the technical report, the financial statements, the share structure, the deal terms, and management’s track record, then checking the company’s claims against sources other than the company.

9Ps and 10Ps. Doug Casey’s method for analyzing junior resource stocks, a checklist of pillars that each start with P (or something that sounds like it could be a P): People, Property, Phinancing, Paper, Politics, Promotion, Push, Pitfalls, and Price. A tenth, Phat Lady, considers the exit: how liquid the stock is, who might buy it, and how an eventual exit might happen. That’s diligence.

If you become a paid subscriber, you will see these terms put to work in our 9Ps scorecards, where we run the numbers a news release doesn’t highlight.

Doug Casey is fond of the old line, usually credited to Mark Twain, that a mine is a hole in the ground with a liar at the entrance. Knowing the vocabulary won’t silence the liar, but it might help you recognize which number he failed to mention.

We hope this is helpful to you over the years. This is the first edition. We will update it from time to time.

John Hunt, MD
Editor, Doug Casey’s Crisis Investing