Page 68 - Introduction to investing in Gold

The Beginner's Guide to Investing in Gold
Have they ever raised significant amounts of capital, and if so, was it a good outcome for the capital providers? If they’ve made money from them on previous deals, they’re more likely to invest in new ones.
Have they personally invested much capital in the business? In other words, do they have skin in the game?
Please don’t overlook the importance of having a good management team.
Nearology
I’ve made this term up, but it’s still important! If there are other gold mines in the area, there’s clearly gold around. It may be that nobody has found it on your company’s patch (they could have an underexplored tenement), or it may be something that has been comprehensively explored by others who have walked away.
There are several points to note here.
Firstly, why did they walk away? Was there no gold? Did they not explore beyond a certain depth? Or perhaps they left certain parts alone because they did not think it was worthwhile (or ran out of money). Perhaps there’s some new technology which suggests something is worth a closer look.
If there were some discoveries, how much was found? It might not have been enough for a major to get involved, but attractive for smaller companies. Majors (large mining companies) are generally looking for deposits of over two million ounces, sometimes more than three million, so they may have decided the potential was too small.
Secondly, when did they walk away? Technology has obviously improved, so if it was in the past few years, that might not be a good sign, but if it was decades ago, there could be compelling reasons to have another look.
You should also look into how much exploration was actually done the first time around. Sometimes, they may say that they’ve carried out some exploration, but when you look at what was done, it wasn’t that much.
Thirdly, who are the nearby operators? If you can prove there’s gold on your land, they may want to buy the company. Are they capable of buying it?
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