What is share dilution and why does it matter for junior miners?

Dilution occurs when a company issues new shares, reducing each existing share's claim on ownership, earnings, and assets. If a company with 100 million shares issues 20 million more, prior holders' stake falls by about 17%.

Junior miners dilute almost by definition: they have no revenue, so they fund exploration and development by repeatedly selling equity — placements, bought deals, flow-through, and units with warrants. Dilution itself is not bad if the capital adds more value than the shares it costs (a discovery is worth the dilution); it is destructive when raises fund overhead or chase failing projects.

What to watch: shares outstanding over time (a steadily climbing count is a warning), the fully-diluted share count (including warrants and options), the price of each raise, and "market cap per ounce" rather than share price alone — a falling share price can mask a ballooning share count. Persistent dilution at ever-lower prices is the classic junior-mining value trap.