Senior companies normally derive their income from mining or other business ventures (they need not be mining companies) rather than from the issue of treasury shares.
The following criteria define a junior company:
- It is neither a producing company nor the recipient of significant income from production or from some other business venture.
- Exploration funding does not come largely from accumulated cash flow from previous production or from the investment income from such funds.
- The exploration funds are not provided by a senior company that controls more than half the issued shares of the subsidiary company in question.
- The principal way of raising exploration funds is the issue of treasury shares.
- The company is not primarily an oil and gas producer, nor is it the exploration arm of a large company.
- It is not a government organization.
The above criteria are essentially identical to those of Kalymon et al (1978, pp. 13-14) and Freyman (1978, Appendix A, p. 2).
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