Prospect generators comprise the topic of a new report by Derek Hamill, research and communications officer for Zimtu Capital TSXV:ZC—itself a prospect generator. But Hamill focuses less on his employer than on the different strategies used by companies that follow a similar business model.
He suggests they might appeal to investors concerned about the higher risk associated with exploration companies, despite the sector’s potential high reward. A single prospect generator, Hamill points out, can expose investors to a number of companies pursuing different commodities, with projects in different stages of development.
As for varying strategies, “In general, the type and location of projects being generated will depend on the size and corporate culture of the PG [prospect generator]. This means PGs gravitate towards markets where they hold a competitive advantage,” Hamill writes. Eight Canadian-listed PGs are cited.
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