Ever since the mining sector went into reverse, experts have been warning that a wave of bankruptcies was imminent. Facts are offered up as evidence, such as: “30% of TSX-V companies have less than $500,000 in cash.” (That one was from January 2014.)

To be fair, there have been a few scattered cases, but certainly not the predicted tidal wave. Where’s the bankruptcy beef?

The answer is that the TSX-V, home of so many junior mining companies, has few requirements to keep a listing. The annual fee can be as little as C$5,200. It’s possible to do no work, have no employees, make no money, and stay listed. All a dormant company has to do is dribble out a few dollars to accountants to make the filings. That’s simple when a company is inactive.

This can go on for many years, even with less than $500,000 in the bank to start.

What about employees, contractors, and suppliers owed money? Many take shares in lieu of cash. They know that if they insist on cash, it will bankrupt the company and they’ll get nothing. This is why, for example, drillers end up owning shares in so many junior companies.

We think a wave of bankruptcies would actually be a good thing for our sector. It’d clear the deck and make it easier for investors to spot the real McCoys. But don’t expect that. Most failed companies will simply become shells, hoping for a new life in the next boom.

The key takeaway is that there is no point in holding on to shares in a company heading for hibernation.

Even if the stock does come back to life in a future boom, there will likely be a rollback—or two. That means that even if the company turns out to be one of those rare gems that delivers a 100-fold return, you might still end up with a loss. And the odds of a 100-bagger are never good.

Painful as it is, when it’s clear that a company is going down for the count, it’s better to sell and move on.