What investors can learn from Sirius Minerals

Sirius Minerals (LON: SXX) provides investors with an indication of the pitfalls of investing in small mining companies developing projects.

It may seem strange to say this, but having a good project is not enough for a small miner. It is no good if the company does not have the money to get the mineral out of the ground and sell it.

If the money is not in place, then a better financed company can come along and snap up the project for a fraction of the investment made. That is what multinational mining giant Anglo American (LON: AAL) is doing with its bid approach for potash fertiliser...

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Andrew Hore is the publisher of AIM Journal, which is an online monthly publication covering the Alternative Investment Market.