Penny stock research can be an arduous task, but it can also be overwhelmingly rewarding if done well. The bottom line is that young companies are speculative in nature. Some may even be more akin to gambling. The key to success is a proper risk to reward ratio. It’s one thing to purchase bullion direct from a dealer, for you know what you’re getting. And this isn’t a mere bullion fund. These stocks take a bit more work. Frankly, the only stocks I’ve ever invested in that can return heart-stopping gains, and thereby justify the risk, are resource explorations companies. Sometimes referred to as junior resource companies, these folks follow a trajectory of three primary milestones in their evolution. These three milestones are really where the rubber meets the road in the resource arena. Penny Stock Research And The ABC’s Of A Start-Up An exploration company is born as a mere start-up, milestone one, and ideally your penny stock research would catch a company at this phase. It is a micro-cap, generally on the Toronto Venture Exchange. They are light, tight, and ready for flight. With precision and acumen, they prepare to slice and dice the planet looking to unearth buried treasure. If you find a start-up with expert leadership and a track record, this can be a life-changing investment. At the start-up phase, there are no assets and little cash. They do need to be able to raise cash though. They have but one mission, and that is to find something of worth. Therefore, the company trades for pennies. It sounds great, and easy, but there’s a reason they are known as “burning matches.†You don’t want the fire to go out on your investment. So, you’ll want to stack the deck. Penny Stock Research Aided By Having Enough Rocks To Turn Over Ideally, you want a start-up that has the rights to large chunks of ground or diverse parcels in different places of promise. Prep for exploration is the second milestone, and it’s a core aspect of your penny stock research. If the locale is politically stable, this is a major advantage. If the people are amenable to mining activities, this eclipses concerns about social unrest and violent opposition. A stacked deck paves the path for rolling out the exploration process. At this point, there could be a joint venture in place to help fund the efforts. Preliminary exploration is much less intense, and less expensive, that drilling samples. Companies begin by doing soil and rock sampling or trenching. If water is on the property, stream sediment sampling is helpful. A myriad of scientific surveys are done, including magnetic, geochemical, geophysical, and other testing. They may spend time poring over satellite images. If the property has been explored previously, the company can investigate old records for clues. Once basic first-step assessments are complete, any projects with reasonable promise can be further developed, and this brings us to the third and final milestone. At this point, the projects are shopped to larger companies that are more prone to deploy the capital necessary to develop further. This type of joint venture approach is a signal to resource investors, and something you scan for in your penny stock research. Nothing is certain at this point, but the vote of confidence a joint venture partner confers to a project makes it a better bet.