mark smith

Dilution is the single greatest enemy to junior mining investors.

Pre-revenue stage juniors are always coming back to the market for more cash while they explore for and develop new mines, and if the share price hasn't gone up, these financings can be dramatically dilutive to current shareholders' positions.

A little over 18 months ago a well known American mining executive joined a micro cap Vancouver junior miner and we were about the only media to take notice.

Mark Smith had been the CEO of Chevron Mining as well as Molycorp, which was a high flying rare-earths stock in 2011, reaching over $70 per share. Despite the fact that Molycorp had since slumped to under $2, we thought enough investors must have made money with Smith in Molycorp that the market would find his joining the $0.10 NioCorp significant.

Our repeated blog posts about Mark joining the company led us to interview Mark on video last December, and we also bought some stock in the company as a speculation at $0.15.

The bet was simple: new management had the stroke to push the company forward.

It was fortunate timing. Mr. Smith went on the road to tell the story in the early part of 2014, and investors liked what they heard. Within six months the company's shares were trading at over $0.75, reflecting a quick five fold increase in price.

It helped that Smith put in a few million of his own money.

This morning, the company announced that they have received $10 million in subscription receipts in a "context of the market" priced offering.

NioCorp's share price this morning is $0.55.

Raising money at these levels reflects a substantially reduced dilution factor to existing shareholders. The company would have had to issue 4x the stock at $0.15 if Smith hadn't come aboard and inspired people to get behind him.

This is a fine example of how a management team with access to investors outside of the typical Vancouver and Toronto financial communities can have a real impact on a junior miner's share price. The Denver, Colorado-based Smith never focused his marketing efforts on our currently depressed financial hubs.

Smith's work with NioCorp reminds us that an effective CEO can lower a company's cost of capital dramatically.

Read: NioCorp Meets Conditions on Archie Lake Option, Special Warrant Commitments Surpass $10,000,000

NioCorp is a sponsor and we have a financial interest in the company. Always do your own due diligence.