A
Accrued interest – The interest due on a bond since the last interest payment was made. The buyer of the bond pays the market price plus accrued interest.
Acquisition – The acquiring of control of one corporation by another. In “unfriendly” takeover attempts, the potential buying company may offer a price well above current market values, new securities and other inducements to stockholders. The management of the subject company might ask for a better price or try to join up with a third company.
Alloy-A compound of two or more metals.
Amalgamation- The process of removing precious metals from ore with mercury.
Annual report – The formal financial statement issued yearly by a corporation. The annual report shows assets, liabilities, revenues, expenses and earnings – how the company stood at the close of the business year, how it fared profit-wise during the year, as well as other information of interest to shareowners.
Anomaly- any departure from the norm which may indicate a presence of mineralization in the bedrock.
Ask – the price at which a dealer offers to sell.
Assay – A test to ascertain the fineness and weight of a precious metal.
Assay Map- Plan view of an area indicating where samples have been taken, and the mineral value of those samples.
Assay Value-The value of an ore as determined by assay results
Assets – Everything a corporation owns or that is due to it: cash, investments, money due it, materials and inventories, which are called current assets; buildings and machinery, which are known as fixed assets; and patents and goodwill, called intangible assets. (See: Liabilities)
Assessment work- The amount of work required by law to be performed each year in order to continue legal rights of mining claim.
Auditor’s report – Often called the accountant’s opinion, it is the statement of the accounting firm’s work and its opinion of the corporation’s financial statements, especially if they conform to the normal and generally accepted practices of accountancy.
B
Back Sample- Rock chips collected from the back of an underground opening, for the purpose of determining ore grade.
Backwardation- A situation when the spot price of a metal stands at a premium over the price of the metal for delivery at a forward date.
Balance sheet – A condensed financial statement showing the nature and amount of a company’s assets, liabilities and capital on a given date.
Barren-Rock or vein material containing no minerals of value.
Base Metal- Any non-precious metal, e.g nickel and copper
Bear – Someone who believes the market will decline.
Bear market – A declining market.
Bid – The price at which a dealer is willing to buy.
Block – A large holding or transaction of stock, often 10,000 shares or more.
Boiler room – An enterprise that uses high pressure sales tactics, false or misleading information, and scare tactics, generally over the telephone, to sell overpriced or worthless investments to unsophisticated investors.
Bond – Evidence of a debt on which the issuing company promises to pay the bondholders a specified amount of interest for a specified length of time, and to repay the loan on the expiration date.
Bore Hole- Common term for a drill hole
Borer- Common term for rock cutting drill
Broken Reserves- The amount of ore in a mine which has been broken by blasting but has not yet been transported to the surface
Broker – An agent who handles the public’s orders to buy and sell securities, commodities or other property in exchange for a commission charged for the service.
Bulk Mining- Any of the large scale, mechanized forms of mining that involves large amounts of ore removed for relatively few miners working.
Bull – Someone who believes the market will rise.
Bullion – Precious metals in the form of bars that are at least 99.5% pure.
Bull market – A rising market.
C
Call – The right, but not an obligation, to buy a commodity or a financial security on a specified date in the future.
Capital gain or capital loss – Profit or loss from the sale of a capital asset.
Capitalization- A financial term used to describe the value financial markets put on a company. Determined by multiplying the amount of outstanding shares of a company by current stock price.
Cash cost- Includes all direct and indirect operating cash costs incurred at each operating mine, divided by the total weight of primary metal produced. Byproduct revenues earned by other metals can used to reduce cash cost per ounce of the primary metal
Cash flow – Reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves.
Cash sale – A transaction on the floor of the stock exchange that calls for delivery of the securities the same day.
Chalcopyrite- a copper iron sulfide mineral that crystallizes in a tetragonal system. Brassy to golden yellow in colour, is rarely found in association with native copper. It is the most important copper ore, as it accounts for about 50% of copper production.
Claim- A portion of land held by either a prospector or a mining company under federal or provincial law.
Class A shares- the most prefered tier of classified stock, offering more voting rights than class b stock . These shares are given to management, and are not allowed to be sold to the public or traded.
Classifier- A mineral processing machine that sorts different minerals according to size and/or density.
Commission broker – An agent who executes the public’s orders for the purchase or sale of securities or commodities.
Common stock – Securities that represent an ownership interest in a corporation. If the company has also issued preferred stock, both common and preferred have ownership rights. Common stockholders assume more risk, but usually get more control and could collect more awards in the form of dividends and capital appreciation.
Concentrate- A product containing the valuable minerals of an ore from which most of the waste material has been removed by undergoing a special treatment.
Confirmation- A form delivered from the broker to the client, setting forth the details of stock sales and purchases for the client.
Contract-specified price – The delivery price determined when a contract is signed. It can be a fixed price or a base price escalated according to a given formula.
Correction - A decline in prices following a rise in a market.
Current assets – Those assets of a company that are reasonably expected to be realized in cash, sold or consumed during one year. These include cash, government bonds, receivables and money due usually within one year, as well as inventories.
Current liabilities – Money owed and payable by a company, usually within one year.
Cutoff grade – The lowest grade, in percent yield, of ore at a minimum specified thickness that can be mined at specified cost.
D
Day order- An order to buy or sell shares, good only on the day the order was entered.
Defered Charges- Expenses incurred but not charged against the currennt year’s operation.
Delayed opening – The postponement of trading of an issue on a stock exchange beyond the normal opening of a day’s trading because of specific market conditions, such as an imbalance of buyers and sellers or corporate news that needs time to circulate.
Development drilling – Drilling done to determine more precisely size, grade, and configuration of an ore deposit subsequent to the time the determination is made that the deposit can be commercially developed.
Diamond drill- A rotary type of rock drill in which cutting is done by abrasion rather than percussion.
Dilution-A decrease in the value of a company’s shares, caused by the issue of treasury shares.
Directional drilling- A method of drilling involving the use of stabilizers and wedges to direct the orientation of the hole.
Discount- The minimum price below the par value at which treasury shares can be sold.
Disseminated ore- An ore containing small patches of mineral spread more or less evenly throughout.
Diversification – Spreading investments among different types of securities and various companies in different fields.
Dividend – The payment designated by the board of directors to be distributed pro rata among the shares outstanding.
E
Earnings report – A statement, also called an income statement, issued by a company showing its earnings or losses over a given period. The earnings report lists the income earned, expenses and the net result.
Electromagnetic (EM) Survey- a geophysical survey that measures the electromagentic properties of rocks.
Equity – The ownership interest of common and preferred stockholders in a company.
Escrowed shares- Shares deposited in trust pending fulfillment of certain conditons.
Exploration drilling – Drilling done in search of new mineral deposits, on extensions of known ore deposits, or at the location of a discovery up to the time when the company decides that sufficient ore reserves are present to justify commercial exploitation. Assessment drilling is reported as exploration drilling.
Extralateral right- Right to minerals beyond sidelines of mining claims
F
Face value – The value of a bond that appears on the face of the bond, unless the value is otherwise specified by the issuing company.
Fineness – The purity of a precious metal measured in 1,000 parts of an alloy: a gold bar of .995 fineness contains 995 parts gold and 5 parts of another metal. The American Gold Eagle is .9167 fine, which means it is 91.67% gold. A Canadian Maple Leaf has a fineness of .999, meaning that it is 99.9% pure.
Fiscal year – A corporation’s accounting year.
Flotation- A milling process in which some minerals particles are inducted to be attached to bubbles and float, and others to sink. Concentrates valuable minerals and seperates them from worthless gangue.
Flow-through shares- A form of equity financing whereby shares of a junior exploration company are purchased by an investor through the Canadian Exploration Incentive Program. As funds are drawn down by the junior exploration company, shares are issued to the investor. This method allows the investor to deduct 133% of the cost of the shares from their income.
Forward costs – The operating and capital costs that will be incurred in any future production of a commodity from in-place reserves. Included are costs for labor, materials, power and fuel, royalties, payroll taxes, insurance, and general and administrative costs that are dependent upon the quantity of production and, thus, applicable as variable costs of production.
Forward contract- The sale or purchase of a commodity for delivery at a specified future date.
Free and open market – A market in which supply and demand are freely expressed in terms of price. Contrasts with a controlled market in which supply, demand and price may all be regulated.
Futures contract – An agreement made on an organized exchange to take or make delivery of a specific commodity or financial instrument at a set date in the future
G
Geophysical survey- A variety of techniques used to gain a better understanding of the physical properties of rocks.
Gold fix – The setting of the price of gold by dealers. It is the fundamental worldwide price for setting prices of gold bullion and gold-related contracts and products.
Gold standard - A monetary system based on convertibility into gold; paper money backed and interchangeable with gold.
Grade- The metal content of a rock.
H
Hedge – a transaction initiated with the specific intent of protecting an existing or anticipated physical market exposure from unexpected or adverse price fluctuations.
Holding company – A corporation that owns the securities of another, in most cases with voting control.
I
Induced Polarization (IP)- A method of ground geophysical surveying employing an electrical current to determine indications of mineralization.
Initial Public Offer (IPO)- The first sale of shares to the general public.
In-Situ Leach mining – The recovery, by chemical leaching, of the valuable components of an ore without physical extraction of the ore from the ground. Also known as solution mining.
Institutional investor – An organization whose primary purpose is to invest its own assets or those held in trust by it for others. These include pension funds, investment companies, insurance companies, universities and banks.
Interest – Payments borrowers pay lenders for the use of their money. A corporation pays interest on its bonds to its bondholders.
Inverted market - A situation in which prices for future deliveries are lower than the spot price. Also known as backwardation.
Investment – The use of money for the purpose of making more money.
Investment company – A company or trust that uses its capital to invest in other companies.
K
Kimberlite- A variety of peridotite, a common host rock for diamonds.
L
Liabilities – All the claims against a corporation, including payable accounts, wages, salaries, dividends, taxes and fixed or long-term liabilities.
Liquidation – The process of converting securities or other property into cash.
Liquidity – The ability of the market in a particular security to absorb a reasonable amount of buying or selling at reasonable price changes.
Liquidity – The quality of being readily convertible into cash.
Listed stock – The stock of a company that is traded on a securities exchange.
Locked in – Investors are said to be locked in when they have profit on a security they own but do not sell because their profit would immediately become subject to the capital gains tax.
Long-term contract – One or more deliveries to occur after a year following contract execution.
M
Manipulation – An illegal operation.
Margin- Cash deposited with a broker as a partial payment of the purchase price for any type of listed stock.
Market capitalization- Current market price of stock multiplied by the amount of shares outstanding.
Market price – The last reported price at which the stock or bond sold.
Merger – Combination of two or more corporations.
Milling – The processing of a metal from ore mined by conventional methods, such as underground or openpit, to separate it from the undesired material in the ore.
N
Native Copper- one of the few metallic elemets to occur in uncombined form as a natural mineral, Native copper occurs as rarely isometric cubic and octahedral crystals, but more typically as irregular masses and fracture fillings. It is a copper-red color on fresh surfaces, but typically is weathered and coated with a green tarnish of copper (II) carbonate.
New York Futures Exchange (NYFE) – A subsidiary of the New York Stock Exchange devoted to the trading of futures products.
New York Stock Exchange (NYSE) – The largest organized securities market in the United States, with prices determined by public supply and demand.
NYSE Composite Index – The composite index covering price movements of all common stocks listed on the New York Stock Exchange.
O
Offer – The price at which a person is ready to sell. Opposed to bid, the price at which one is ready to buy.
Option- The ability to buy or sell share at a set price, regardless of market value.
Ore reserves- The calculated tonnage and grade of mineralization which can be extracted profitably.
Ounce - A unit of weight. In the precious metals industry, an ounce means a troy ounce equal to 31.1035 grams.
Oversold – The reverse of overbought. A single security or a market believed to have declined to an unreasonable level.
P
Par value- The stated face value of a stock.
Penny stocks – Low-priced issues, often highly speculative, selling at less than $1 a share.
Polymetallic- Complex ores containing profitable amounts of more than one valuable mineral.
Possible reserves- Valuable mineralization not sampled and/or assayed enough to know its exact value. Also know as Inferred Reserves
Prefered shares- Shares of a limited liability company that rank ahead of common shares, but after bonds, in distribution of earnings or in claim to the company’s assets in the event of a liquidation.
Price-to-earnings ratio- The current market price of a stock divided by a company’s net earnings per share for the year.
Prospectus- A document filed with the appropriate security commission detailing the activities and financial condition of a company seeking funds from the public by issuing shares in the company.
Pyrrhotite- An iron sulphide, sometimes associated with nickel, in which cases it can be mined as a nickel ore.
Q
Qualified Person – A “Qualified Person” means an individual who is an engineer or geoscientist with at least five years of experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and the technical report; and is a member or licensee in good standing of a professional association.
R
Rally – A brisk rise following a decline in the general price level of the market, or in an individual stock.
Reclamation – The process of restoring the surface environment to acceptable pre-existing conditions.
Resistivity survey – A geophysical technique that measures the resistance of a rock body to an electric current.
Resources and Reserves – For a complete definition of these terms, see the Canadian Institute of Mining (CIM) Definition Standards – For Mineral Resources and Mineral Reserves at http://www.cim.org/committees/CIMDefStds_Dec11_05.pdf. The following definition is a guideline only and should not be referenced for the purposes of investment or reviewing a company’s or mineral project’s merits.
Resources – A resource, when used in a NI 43-101 compliant report, indicates a mineral resource that has been defined using sampling, drilling and other methods, as determined by a Qualified Person (see above). Resources are assigned different qualifiers based on the level of certainty. Inferred, Indicated and Measured are the three certainty levels with Inferred being the least certain and Measured being the most certain. These qualifiers are assigned differently for different resources and different geological settings. For example, potash in lakebed formations can be assigned higher levels of certainty based on very widely spaced drill results, whereas veined gold formations require closely spaced drill results before higher certainty levels are assigned.
Reserves – Reserves are the subset of a Resource which is determined to be economically mineable using a feasibility study. Reserves are also assigned qualifiers based on certainty. A Probable Mineral Reserve is the economically mineable portion of an Indicated Resource. A Proven Mineral Reserve is the economically minable portion of a Measured Resource.
Restoration – The returning of all affected groundwater to its pre-mining quality for its pre-mining use.
S
Short Covering- Purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price.
Short Selling- The selling of a security that the seller does not own, or any sale that is completed by the delivery of a security borrowed by the seller. Short sellers assume that they will be able to buy the stock at a lower amount than the price at which they sold short. Selling short is the opposite of going long. That is, short sellers make money if the stock goes down in price.
Smelting- a form extractive metallurgy with the main use to produce a metal from its ore.
Speculation – The employment of funds by a speculator. Safety of principal is a secondary factor.
Speculator – One who is willing to assume a relatively large risk in the hope of gain.
Spin off – The separation of a subsidiary or division of a corporation from its parent company by issuing shares in a new corporate entity.
Spot contract – A one-time delivery of the entire contract to occur within one year of contract execution.
Spot market – a market in which delivery and payment have to be made within two working days of the transaction date.
Spot-market price – A transaction price concluded on the spot, usually involving a specific quantity of product. This contrasts with a term-contract sale price, which obligates the seller to deliver a product at an agreed frequency and price over an extended period.
T
Toronto Stock Exchange (TSX) – The largest stock exchange in Canada, the third largest in North America and the seventh largest in the world by market capitalization. Based in Toronto, it is owned and operated by TSX Group for the trading of senior equities.
Total Cash Cost Per Ounce- The cash cost per ounce, plus royalties and production taxes divided by the total ounces of primary metals produced.
Trader – Individuals who buy and sell for their own accounts for short-term profit.
Turnover rate – The volume of shares traded in a year as a percentage of total shares listed on an exchange, outstanding for an individual issue or held in an institutional portfolio.
U
Unlisted stock – A security not listed on a stock exchange.
V
Volume – The number of shares or contracts traded in a security or an entire market during a given period.
W
When issued – A short form of “when, as and if issued.” The term indicates a conditional transaction in a security authorized for issuance but not as yet actually issued.
Working control – Theoretically, ownership of 51% of a company’s voting stock is necessary to exercise control.
Y
Yield – Also known as return. The dividends or interest paid by a company expressed as a percentage of the current price.
