Every investor is making two the most important decisions for her investment: the first time when buying and the second time when selling such investment. The proper due diligence is the first step to the successful investment in any junior mining company.
Protection of shareholders and potential investors must be the first duty of every CEO and Board of Directors, but you should never rely on it solely as an investor.
One of the first steps of such DD, which I would always recommend is a letter to Legal Counsel and Corporate Secretary of the Company seeking financing.
Among the most important questions should be the following:
1. Request to provide minutes of the Board of Directors Meeting approving financing.
2. Have any of the Directors dissented from approval of the financing and why if it is the case?
3. Have any of the Secured Creditors or Debenture holders voted against granting General Security Agreement if it is the part of the Debt financing?
4. Are there any claims or potential claims against the Company, Directors and Management?
5. In case of participation of Insiders of the Company in the financing, can Legal Counsel confirm that approval of such financing was done appropriately without any violations of the security law?
6. In case of the exemption under which such financing has been conditionally approved, does it still apply to your particular case?
Corporate Governance is very important for all our industry: Clean Energy must be done with Clean Hands.
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