what is a junior company 
a junior company is a small company that is developing or seeking to develop a natural resource deposit or field a junior company is like a startup in that it is either looking for funding to help it grow or it is looking for a much larger company to buy it out understanding a junior companyjunior companies are typically small cap with a low market capitalization usually under 500 million and have thin daily trading volumes of 700 000 and under they are most likely found in commodity exploration such as oil minerals and natural gas junior companies are believed to be interesting businesses for those who can afford to take the risks associated with them the costs involved in starting a junior company have grown significantly but so has the reward for being successful the first thing many juniors will do is to acquire properties they believe have a big probability of resource deposits the company will then conduct a resource study once that has been completed it will either provide the results to shareholders or to the public to prove there are assets available if the study provides positive results the junior company will raise capital to go ahead with exploration or partner up with a bigger company to cut down on costs in some cases it may also attempt to be bought out by a larger company characteristics of a junior companya lot of junior companies are venture capital recipients that are looking for financing for their own operations for example a junior gold mining company may not own its mining operation instead it may look to secure capital in order to undertake this part of the business junior companies also come with a lot of risks if the company undertakes exploration and cannot find any resources before its debt is due it will suffer financially and may have to declare bankruptcy juniors are also sensitive to commodity prices meaning their share prices fall directly in line with the commodity with which they are associated so the share prices for gold juniors will be affected by the price of gold just like oil and gas juniors will be affected by energy prices juniors will have management teams that provide some expertise in the field of exploration and can navigate any local governmental and environmental regulations the companies will also have highly trained personnel on staff including engineers and geophysicists so when the properties show promise they can help bring the resources into production investing in a junior companyinvesting in junior companies often comes with more risk than companies that are bigger and more established this is because juniors may still be exploring and at times may not find any resources at all investors who are interested in smaller up and coming companies like these should remember to diversify in order to minimize their risk and get the maximum return on their investments a greater degree of interest in juniors will typically come from individual investors because they usually invest based on emotions institutional investors such as mutual funds or hedge funds will normally invest in senior companies with a greater track record the best places to find juniors are the toronto stock exchange tsx and the tsx venture exchange tsxv both have hundreds of mining companies listed real world examplenexus gold headquartered in vancouver canada is one example of a junior mining company as of sept 2 2020 the company had a market cap of 14 5 million with a daily trading volume of about 253 000 putting it firmly within the small cap parameter the company is listed as an exploration and development company with operations in west africa and canada currently nexus has six projects in canada and five projects in west africa so it is further along the development line than completely new junior companies though these projects have only shown historical samples or prospective new samples meaning that the mines are not in full development as yet 