Value Relevance of Accounting and Other Variables in the Junior-Mining Sector

Abstract

Unique fundamentals and severe uncertainty in the junior-mining-sector ( JMS) make valuing JMS ventures problematic. However, potentially enormous returns draw many investors into the JMS. While financialinstrument-pricing theory suggests that accounting values/ratios should have little influence on JMS-firm outcomes, this study's simple OLS and Panel-data findings show strong correlation between those variables and JMS-firm-share prices. After discounting market failure, it is conjectured that JMS nonfinancial factors, share prices and accounting values are co-determined in a simultaneous relationship that is obscurely linked to outcomes. The notions uncovered in this study should greatly interest academics and business sector participants. Unique fundamentals and severe uncertainty in the junior-mining-sector (JMS) make valuing JMS ventures problematic. However, potentially enormous returns draw many investors into the JMS. While financial-instrument-pricing theory suggests that accounting values/ratios should have little influence on JMS-firm outcomes, this study's simple OLS and Panel-data findings show strong correlation between those variables and JMS-firm-share prices. After discounting market failure, it is conjectured that JMS nonfinancial factors, share prices and accounting values are co-determined in a simultaneous relationship that is obscurely linked to outcomes. The notions uncovered in this study should greatly interest academics and business sector participants.

The Effects of Corporate Governance, Firm Size, Profitability, and Growth Opportunities on the Value Relevance of Accounting Earnings – A Study of the Indonesia Stock Exchange

“…Meanwhile, the empirical results of Iddon, Hettihewa, & Wright (2015) indicated a strong correlation between relevance of accounting values and other variables in the junior mining sector (JMS). This research examined the correlation between the accounting values in the financial statements of junior mining firms and stock market value.…”

Stock Returns and The Weather Effect: the Case of Ghana

“…This archetypal is verifiable by scientific and econometric analysis, which makes it a very good predictor of the changes in the stock market. However there are contra discovery made by gurus in equity markets that the changes or movements in equity markets can happen due to unexplainable factors (Iddon, Hettihewa, & Wright, 2015). For example, Mehra et al, (2002) found that there is a 6% gap between the rate of return and risk-free interest rates (Mehra & Sah, 2002).…”

Gospodarka Surowcami Mineralnymi - Mineral Resources Management

“…It is also worth noting the difference between the life cycle of mining companies and junior mines. The details related to a completely different business model of junior mines determine the approach to accounting accents (IfRS-6) and valuation methods which, based on research by Iddon, Hettihewa and Wright, have a direct impact on their market value (Bebbington and Larrinaga 2014;Iddon et al 2015;Burritt et al 2021;ferguson et al 2021). Therefore, when dealing with such a narrow subject, it is worth checking certain market relationships from the point of view of statistics.…”