[INFOGRAPHIC] Financing model for junior miners: Project Generator

Exploring for minerals is a very costly and risky business with a very low success rate—the odds are not in your favor.

For junior miners, it’s a cyclical game of raising money to drill and then praying to hit some high grades in order to raise more money. The game continues until the company either hits the mother lode or runs out of money.

However, many exploration companies are adopting a new financing model called Project Generator.

Simply put, this model allows the junior miner to get a more established company with substantial capital to either partner or joint venture with, in exchange for a portion of the project. Ultimately, this model gives the junior miner a longer life and helps to create more opportunities to find that profitable discovery.

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“I like the prospect generator model because it gives a company exposure to a multitude of projects that someone else is spending their money to explore,” said Mickey Fulp, a geologist and editor of The Mercenary Geologist.

“It allows a company to do relatively low-cost exploration, grassroots-style prospecting and reconnaissance exploration and preserve its capital without diluting.”

The following infographic breaks down everything you need to know about a Project Generator. 

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