JK: The TSX.V has a culture where resource juniors recycle themselves through reverse splits when their projects fail, their issued stock becomes unwieldy, and they run out of money. These rolled-back juniors refinance themselves and get a new project to start the exploration cycle all over again. Sometimes it is with the same management team; other times a new group takes over. I like this because it gives existing shareholders a shot at getting their money back and sometimes more. Over time there have been more surviving juniors than delisted defunct juniors.

These juniors used to start as an initial public offering (IPO) with a so-called project of merit. But over the last decade the Canadian brokerage industry shifted its focus to a different type of IPO called a capital pool. Since January 2000, the TSX.V listed 1,135 new capital pool companies. Many of them acquired advanced resource projects during the super-cycle boom of the last decade. Many of these companies disappeared through takeover bids. But many also acquired mediocre resource projects that had almost no chance of yielding a new discovery or were so marginal not even super-cycle metal prices could help them. Now the funding for the resource sector has dried up. Between the old group of recycled juniors and this newer crop of former capital pools, we have a glut of resource juniors.

Each one of these companies uses up about $200,000 a year in overhead just to exist as a public company. While I am fairly adept at distinguishing the pretend juniors from the serious ones, I've spent 30 years focused on this sector to acquire this skill. To quote the statistician Nate Silver, the noise is drowning out the signal for less specialized audiences. The disappearance of 500 companies would be good for the sector. It would allow investors to focus on the serious companies.