AGORACOM Small-cap Investor Relations Blog

[NOTE – Though Some Data Is Specific To The Resources Industry, online research and usage data is applicable to all small-cap companies]

Throughout the first half of 2008, AGORACOM surveyed over 850 small-cap retail investors at each of the following 4 major resources conferences:

• Prospectors and Developers Association of Canada (PDAC)
• Cambridge Conference Vancouver (January)
• Cambridge Conference Vancouver (June)
• Cambridge Conference Calgary

The purpose of the survey was to gain further insight into the online investing, research and community habits of small-cap and micro-cap investors. The surveys were conducted offline by design to avoid skewing of the results.

This survey represents a continuing series of surveys from each of these events since January of 2007. The results from each individual conference are posted on the AGORACOM blog within 30 days. In addition, the consolidated survey results are posted to our blog in early July. Both the individual and consolidated survey results can be found on the AGORACOM blog for you to review.

Given the speed at which the internet is moving and impacting investor relations, the results of these surveys are invaluable to CEO’s and investor relations departments of small-cap and micro-cap metals and mining companies across North America.

This is especially true for companies headed by older, less agile management teams that continue to overemphasize the value of traditional investor relations and under estimate the importance of online investor relations. Investors of such companies should also take note of these results and relay them to management.

AGORACOM has always understood the power and cost-efficiencies of search engine marketing, community building and multi-media communications. However, in order to go beyond theory and bias, we had to objectively prove it via empirical evidence.

SURVEY RESULTS

Upon reviewing the results and comparing them to 2007, we can unequivocally conclude that online research, collaboration and discussion are heavily utilized by small-cap investors and dramatically increasing. Frankly, the results were more dramatic than even we imagined and clearly point to the overwhelming need for an online IR strategy that goes beyond your website.

With approximately 850 investors surveyed, we were able to extract some extremely valuable information that will be of great importance to small-cap and micro-cap companies. The information will have different implications for each one of you, depending on your primary metal/mineral, market capitalization and online strategy. As such, though I’ve provided some tertiary comments following some of the results below, the final analysis will be your own. To this end, we’re happy to provide you with the following results:

HIGHLIGHTS

• 81% of Investors Prefer Small-Cap Resource Companies over Large-Cap.
• 48.4% of Investors were most Bullish on Gold compared to other minerals and metals.
• 73% of Investors Conduct the Majority of their Research (75%+) into New Stocks Online. This is a dramatic 18.65% increase over 67% of respondents in 2007 and serves as proof positive that an online investor relations program is critical if you want to reach new investors.
• 48% of Investors Conduct All of their Research (95%+) into New Stocks Online. No online IR program means you immediately miss out on 48% of all investors.

• 60% of Investors Use Discussion Forums For Information and/or Research.

• AGORACOM brand recognition amongst retail investors has risen by 360% over the same period last year. With 95% of our market budget allocated online, we are an actual case study about the power of online marketing to small-cap investors.

QUESTION #1 – Which Metal/Mineral Are You Most Bullish On?

Gold (48.4%)

Silver (20.5%)

Copper (9.0%)

Uranium (10.7%)

Nickel (4.7%)

Diamonds (4.4%)

Molybdenum (2.3%)

QUESTION #2 – Do You Prefer Small or Large-Cap Resource Companies?

Small-Cap (83%)

Large-Cap (17%)

QUESTION #3 – What Percentage Of Your Research Into New Stocks Is Done Online?

100% of Research (21%)

90% of Research (27%)

75% of Research (25%)

50% of Research (14%)

< 50% of Research (13%)

NOTE: This is one of the most striking statistics in the entire survey. Specifically, 73% of small-cap investors use the web to conduct the majority (75% +) of their research into new stocks.

Even more striking is that fact that 48% of investors rely on the web entirely to find their next small-cap investment.

Finally, after averaging the numbers out, the web accounts for 77.05% of all research into new small-cap investments.

These figures are both striking and logical when you consider the fact that major finance media provides very little, if any, small-cap and micro-cap coverage.

Based on these figures, a CEO that fails to implement an online IR strategy is doing a great disservice to their company and shareholders.

QUESTION #4 – Would You Like To Participate In Private Placements Of TSX-V Resource Companies?

Yes – 64.8%

No – 35.2%

NOTE: With the majority of retail investors wanting to participate in private placements directly, do you need to rely on an institution to raise financing? Or will a community of accredited investors now get the job done?

QUESTION #5 – Had You Heard Of AGORACOM Before This Conference?

Yes – 54.8%

No – 45.2%

NOTE: AGORACOM awareness has increased by 360% in just one year. During this period we have focused more than 95% of our marketing budget to search engines and other online marketing tools. Not only are we putting our money where our mouth is – we’re proving that online marketing works!

QUESTION #6 – Do You Use Discussion Forums For Information and/or Research?

Yes – 64.4%

No – 35.6%

NOTE: With more than 60% of investors using forums for information and research, CEO’s need to begin taking this medium seriously. This year’s number represents a 6.7% increase over 2007 and there is every reason to believe it will continue to climb year-over-year. Again, this is logical when you consider online investors are no different from other web users that flock to communities of like-minded individuals such as Facebook (Friends), LinkedIn (Professionals) and others.

As such, CEO’s need to start the process of hosting their own communities for the purposes of controlling their message and communicating with shareholders. The alternative is to have unscrupulous investors hijack your message through unmonitored online communities.

CONCLUSION

The importance of the web in achieving your IR goals simply can’t be overstated.

Small-cap investors are overwhelmingly using the web to research and discuss their current or prospective investments. They are dissecting your fundamentals, collaborating about your future, watching videos, sharing photos and making decisions about whether to buy, sell or hold your stock.

Unfortunately, most of this is still going on without the participation of small-cap public companies themselves. By my best estimates, more than 90% of small-cap companies have failed to implement an IR strategy beyond hosting a web site.

The good news is that we are still in the early stages of a dramatic paradigm shift. As such, you have an incredible, cost-efficient opportunity to be a part of that process and significantly impact the future of your company for years to come. Feed your audience with the best information possible, ask them questions, listen to their feedback and create a connection with an ever increasing number of investors that will pay you perpetual dividends.

If you are not a significant part of that ecosystem, you are doing your company a great disservice and will inevitably be left behind the unstoppable growth and habits of online investors.

Regards,
George Tsiolis
Founder
AGORACOM