I've finished going through a short anthology-format guide to junior exploration stocks, called Junior Mining Investor, and what was in there made the chore look pretty daunting. If there's any theme that was emphasized by several of the authors, it would be the "resume approach." The best junior exploration company to invest in is one where experienced geologists and mine developers are on board, with track records of bringing mines into production. As is made clear, very few projects become mines.
There was some discussion of what makes a great deposit, but just enough to indicate what's going on when encountering one that's claimed to be. The consensus advice in this area was to look for a huge deposit with the potential for several million ounces. Unfortunately, the market being what it is, the best deposits among exploration stocks have already been bid up to near-production values. Several have already been taken over. The best time to have used this approach - I say in hindsight, and with some regret - would have been in late 2008, when the credit crisis combined with the drop in gold to $700 drove down the price of juniors meeting this criterion to fractions of what they are today. Now that gold is flying, the cheap ones are also the ones without that assurance.
The above lament ties in with one of the minor considerations in the book: buying at the right time. One approach discussed is to swoop in when excitement over previous drill results has faded. The trouble is, the best deposits often don't have that extended drop working for them.
Unfortunately, this leaves the would-be speculator in a quandary. The best risks have already been bid up, and the ones that are cheap aren't likely to produce anything. Evaluating a property takes a pretty keen eye, and a knowledge of mining geology helps a lot. Given this barrier, most people either rely upon the scuttlebutt or a paid advisory service. As for the former, the most extensive Website for scuttlebutt is Stockhouse.ca, whose "Bullboards" are quite active when news arises. The boards are full of pumpers and bashers, but there are enough knowledgable and thoughtful posters to make up for the dross.
If you're interested in an example, I've gotten a name that does qualify on the resume front but not on the deposit-size front. It's called Eagle Hills Exploration Corp., V.EAG , and it just closed a C$3.75 million private placement to explore its Windfall property more thoroughly. A spin-off from Noront, it has two of the movers behind that company on its board of directors: Richard Nemis and John Harvey. Both, particularly the latter, have cut-above track records in mine development. In addition, after a spectacular drill result, the company's stock fell to close to where it was before the result after quadrupling on it. [Graph here.] This company makes a good one to sink the teeth into, for practice if anything.
Disclosure: None; I don't own a single share in Eagle Hills.