| | | I have been thinking about how to fit the new ZEN approach into my wheelhouse and I think the best analogy is to the type of junior miner called a prospect generator. Through prospecting on the ground and using their contacts they accumulate prospective mineral properties why they try to JV out to companies with more money to pay for the exploration and work-up.
Investors make money from prospect generators in two ways:
- trading in and out as metal prices and markets and individual developments with the stock occur;
- receiving shares in new companies created to spin out the most prospective of these properties.
Does this model apply to the way ZEN embarks on project after project? How will the many projects generate returns for investors?
I should also mention another kind of junior miner that constantly accumulates projects. These companies acquire properties that are located next to other companies' discoveries, aka closeology, and often move from commodity to commodity as each one comes into fashion.
Look, we're a coalbed methane compay.
Now look, we're a lithium company.
Now look, we're a uranium company.
Now look, we're a graphite company.
etc.
etc.
etc.
In general, these are companies to avoid. The principals grant themselves cheap options and shares and then run promo-based pump and dump schemes to sell them to the unwary. You can make out well if you suss them out and time promotional cycle right, but I prefer to buy into companies that have the intention of creating something other than profits for insiders.
I am hoping ZEN fits better into the prospect generator model, but if you look at the sheer number of projects they have started and seemingly abandoned over the years, it is hard not to be a little suspicious.
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