Doug Casey likes to say that mining is a “crappy, 19^th century choo-choo train industry.”

Before I worked for Doug, I understood the expression “It’ll be a gold mine!” to mean that something will be highly rewarding.

That’s still what the phrase means… but now I’ve been to hundreds of gold mines and gold exploration projects. Not only do I agree with Doug—I think he’s being too nice.

Mining is a terrible business. It might be the worst business in the world.

• Mining is hated by large numbers of people everywhere in the world, even in places that depend heavily on it for job and taxes. NIMBY (“not in my back yard”) thinking is as bad for mining as it is for nuclear waste sites.
• Well-funded opposition groups backed by global organizations target mines and exploration projects zealously, and often with little regard for the truth.
• You never really know if a mine is going to be profitable until after you build it, even with the best engineering studies done in advance.
• Mining is dangerous. People die in mines every year. Even the best precautions in the world can’t completely eliminate the dangers. Everyone who works underground knows this, and accepts the risk.
• Mines are easy targets for greedy governments. Many companies in today’s information economy—even manufacturing—can simply move to a different jurisdiction if taxes or regulations get too onerous. But you can’t move a mine.
• Profit can turn to loss suddenly, even for the best companies in the business. The commodities miners produce are so volatile, there’s simply no such thing as a stable price environment or projection.
• Force majeur happens, not with great frequency, but more than in just about any other business. An earthquake, a tsunami, too much rain or snow, not enough rain or snow, an unrelated labor strike, an election, the discovery of an endangered mosquito, or any of a million other things can shut the best mine in the world down in a blink of an eye.

The crypto crowd made a huge PR mistake when they called it “Bitcoin mining.” Mining triggers an instant, negative response from the same demographic that’s their prime market. After all, it was intra-galactic space miners who killed all the nice blue people, rather than shift their operation all of 200 kilometers away, in Avatar… That’s how pop culture views the industry.

If all this is true, why do I like investing in miners?

I don’t, actually. Not as a rule. It’s exploration and development I focus on.

I do have one miner in my portfolio now, but that’s not a bet on a steady business delivering dividends for years to come. It’s a speculation on what I see as a deeply undervalued asset getting re-rated.

And I do like exploration plays with cash flow. So a small miner with huge exploration potential can be a good bet. When I do go that route, it’s the exploration I’m speculating on (with risk mitigated by the cash flow)—not the “little engine that could” angle.

But wait, isn’t exploration the highest-risk part of the mining industry?

Yes. While miners, even good ones, can fail at any time, exploration fails most of the time. It’s probably more accurate to say that exploration fails almost all the time.

That’s what makes it so profitable when a speculator gets it right.

Remember, the change in value when a company goes from having nothing to having something of any value at all is mathematically infinite. In practical terms, this is why huge “once in a lifetime” gains such as Bitcoin saw last year are relatively common in junior resource stocks that deliver the goods.

This makes the early stage part of mining the best business in the world.

The word “relatively” is key to the above. Bagging 10x and 20x gains on a speculation doesn’t happen every day. It does happen, usually several times in every cycle. But one has to know how to spot the right opportunities.

I’ve spent the last 14 years learning just that.

And I’m sure you can too. I’ll do my best to share what I’ve learned via IndependentSpeculator.com.