Leia Michele Toovey opines that the first step in developing a gold mine is selecting an area for exploration. While this may seem boring and irrelevant to an investor looking into gold mining, this preliminary phase is the very foundation of a successful mining venture. There are dozens of ways in which an error in this crucial time could cause major headaches down the road. A critical misstep by an exploration company could in turn impact share-value. Therefore, it is important for an educated investor to understand the basic process involved in staking a mining claim.
Before settling on a parcel of land to lease, a mineral exploration company must determine what land is available, and whether it is government or privately owned. Market research is also an important factor in mineral exploration, and different forms of market research are conducted throughout the life cycle of a gold mine. In the beginning stages of developing a mine, market research tools are used to analyze how much gold must be found in order to make a project economically feasible based on projected commodity prices and demand growth. In addition, certain companies are only interested in deposits above a certain size threshold. In the beginning stages of research, miners will also consider other important factors, including local taxes and regulations, and infrastructure.
How mineral rights are leased depends on what country, and even in what state or province the land of interest is located. In fact, all of the steps involved in mining are generally heavily regulated by the government. Investors should be wary of the political climate of the region where a miner is prospecting.
Many pro-mining countries, offer what is called a split-estate, where mineral and surface rights can be held by separate owners. This is a law that was created to encourage mineral exploration.
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Managed & Built by I2M Consulting, LLC | © 2010-