Investing in gold mining stocks is NOT easy

Factors to consider when considering investing in gold mining stocks

Exploration stage companies almost always make readily available the information that they have collected from their initial work in an area: surface signature, geophysics, structural data, geochemistry and the like. This initial information could be a good indicator of the degree of success a company could realize with its project.

Focus on the history of the drilling crew, their track records and qualifications, could also provide insight.

Look beyond the current information and examining the area itself, how many times it has been explored by different companies, previous geological reports on the evolution of that land, studying the way it has formed, etc., could also be good indication of an area's potential output.

The geopolitical climate surrounding the land in question is extremely important. As most of us are aware, parts of South America Russia , for example, contain profitable deposits but current political conditions in some of these areas are certainly not conducive for secure investing and folks would do well to stay away until conditions change.

Basic key factors certainly include people. Is the management technically competent? Do they have the ability to raise capital? What is their experience in the area? If the answers to all of these questions are yes, things can be promising.

It is critical to be able to “gauge the level of risk in the investment”. If that cannot be accomplished with some degree of certainty, an investor should stay away.