[INFOGRAPHIC] How Junior Miners Can Hit the Reset Button

Life as a junior mining company isn’t for the faint of heart. When the market is doing well it seems like everyone knows your name. However, when money can’t be raised or debt obligations paid off, it makes for a frightful environment.

The following infographic explains how junior miners can resort to plan b.

According to VisualCapitalist, troubled companies have options including the following:

“First, the troubled company would roll back the stock such that multiple shares would be exchanged for one new share (for example, a 6:1 rollback would mean 6 old shares are turned into 1 new share). Note that such a rollback also changes the stock price by the same ratio, so a $0.01 stock would then be trading at $0.06.

Then, the company would issue new stock to settle any debt that is on the books and then raise money again. Ultimately, in order to be successful at any of this, the company needs to also shift their direction in some meaningful way.

While it is never fun to admit defeat for management teams or investors, ultimately this “reset” button is something that is a unique part of this sector and for good reason.”