Every copper junior has a good story. Copper's demand case is genuinely interesting, and a well-drawn tenement map on a broker's slide can make a small company look like the next big thing. The trouble is that most of the money in this sector is lost in the gap between a promising story and a permitted, financed, producing mine. The questions below are the ones worth asking before you buy, rather than after the share price has halved. Work through them in order — the later answers only make sense once you have the earlier ones.

1. The resource estimate: read the numbers, not the headline

A resource is an estimate of what is in the ground. A reserve is the part of it that engineers believe can be mined at a profit. Many juniors have the first and not the second, which tells you how much work is still to be done. The detail lives in the technical report, not the press release.

Question 1: What share of the resource is Measured and Indicated, and at what cut-off grade? Measured and Indicated material is what a mine plan can be built on. Inferred material is a hint about what might be there. If most of the tonnage is Inferred, treat any economic study as theoretical. Cut-off grade matters just as much: a low cut-off flatters the tonnage, and every cut-off assumes a copper price and a cost structure. Ask what happens to the resource if copper falls by a fifth.

Question 2: What recovery and metallurgical assumptions sit behind the economics? Copper in sulphide form behaves differently from copper oxide, and penalty elements such as arsenic can complicate both processing and concentrate sales. The recovery percentage in the flow sheet is where ambitious studies quietly come apart. Work out contained metal yourself — tonnes multiplied by grade — rather than relying on a summary table.

Grade, scale and infrastructure

A large, low-grade deposit can be an excellent business, but only if it has power, water, roads and a long enough life to repay the capital. A small, high-grade deposit can be nimble but may never justify the plant. Neither is automatically better; what matters is whether the two match.

2. Jurisdiction and title: where the ground actually sits

Question 3: Who owns the minerals, and can the licence be taken away? In some countries the state owns everything below the surface and the company holds a licence with expiry dates, minimum expenditure commitments and renewal conditions. Elsewhere the company may own the ground outright. Either way, read the tenure schedule in the technical report and check the licence register maintained by the relevant government department.

• The licence schedule and expiry dates from the technical report
• The risk factors in the latest annual report — read them properly
• Royalty rates, state free-carried interests and any profit repatriation rules
• What other operators in the same region have said publicly in the past two years

Question 4: What could stop this project without the company's consent? A neighbouring landowner with a legal claim, a provincial government that wants a bigger stake, a currency control that traps cash, or a change of mining code are all realistic outcomes. Country risk is not a reason to avoid a project, but it is a reason to demand a lower entry price.

3. Permits and the clock

Question 5: Which permits are held, which are applied for, and which have not been started? Read the wording closely. "Permit granted" is not the same as "application accepted", which is not the same as "constructive discussions with the authorities". Environmental approval, water allocation, surface rights, tailings storage approval and export permissions are separate processes, often run by different departments.

Question 6: What timeline is the company actually accountable for? Permitting a new copper mine is typically measured in years, not quarters, and the schedule usually slips. A management team that publishes milestones and then meets them is worth more than one that talks about "advanced discussions".

4. Financing, dilution and the cash runway

Question 7: How much cash is in the bank, and how many months does it cover? Use the most recent quarterly report, not the annual one. Subtract committed spending — drilling programmes, option payments, licence fees — from the cash balance, then divide by the quarterly burn. If the answer is under twelve months, a raise is coming.

Question 8: How will the next phase be funded, and who pays for it? Every route has a price.

The cost of each funding route

An equity placement dilutes you. A convertible note or a warrant issue dilutes you later, often at the worst moment. A royalty or streaming deal sells future revenue for cash today, and a few percent of gross revenue looks very different once a mine is running. A farm-in from a major spreads the risk but hands over control and upside. An offtake prepayment is convenient until concentrate terms turn out to be unfavourable. Check the fully diluted share count, including options and warrants, before you decide what the company is worth.

5. Management, insiders and the share register

Question 9: Has this team built and operated a mine before, in this country, at this scale? Look up each director's previous companies and what happened to them. A track record that includes two ventures that went to zero is relevant information, however impressive the current presentation is. Technical depth matters, but so does experience of dealing with the local regulator.

Question 10: Who owns the shares, and is anyone else calling the shots? Directors who hold meaningful equity bought with their own money behave differently from directors paid largely in options. A single dominant shareholder can dictate financing terms. Watch for related-party transactions, generous share-based payments and a steady stream of announcements that contain no new information.

6. ESG, water and the neighbours

Question 11: Where does the water come from, and who else wants it? Water is often the constraint that decides whether a project proceeds, particularly in Chile and Peru. A permit that depends on another user's allocation is a risk, not an asset.

Question 12: Who holds a veto over this project? Landowners, Indigenous communities, local councils and farming associations can all delay or stop development. A signed impact benefit agreement is worth far more than "ongoing engagement". Tailings storage deserves the same scrutiny: where the facility goes, how it is designed, and who lives downstream. These are schedule risks, and schedule risk costs money.

Turning the checklist into a routine

Three documents will answer most of these questions: the latest annual report, the technical report, and two years of news releases. Read them in that order and note what was promised against what was delivered. Then write down the three things that would make you sell — a failed drill programme, a raise below a certain price, a permit refusal — before you buy, so the decision is not made in the heat of a bad morning. Size any position accordingly; small explorers are capable of losing most of their value on a single result. And if the numbers only work at an optimistic copper price, you are speculating, not investing. For anything significant, speak to a regulated financial adviser about how a stock like this fits your circumstances.

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