The days when a prospector and his burro wandered around and found mineral deposits are pretty-well over.
Most of the easy deposit finds, often called low-hanging fruit, have been discovered.
Looking for mineral deposits today is based on the technology of radio-frequency surveys and compiling from them 2-D and 3-D models of the geology and potential orebody.
Even with this technology, only one in every 3,300 bodies drilled becomes a mine. Compare that to the 88 per cent success rate by oil and gas drillers who use more data and computer power to determine targets and petroleum reservoirs — a practice known as artificial intelligence (AI).
Toronto-based Goldspot Discoveries Corp. hopes to disrupt mine findings with artificial intelligence.
The three-year-old company analyzes millions of data points provided by current technology to discover mineral deposits, and where to drill.
The purpose of this data mining, according to Goldspot, aims to reduce costs of finding mines and increasing efficiency in an industry where new deposits are deeper and more complex.
The team consists of 25 geologists, including eight PhDs.
Perhaps more telling about Goldspot’s prospects are the investors backing the still tiny corporation.
Palisade Global, a somewhat mysterious global corporation representing institutions, funds and high net worth investors, owns 14 per cent. The South American Hochschild Mining family owns seven per cent.
Well-known Canadian mining billionaire Eric Sprott owns 10 per cent of the company. Sprott sprinkles his wealth among many promising companies.
U.S. Global and its CEO Frank Holmes own eight per cent.
Management and insiders own 14 per cent, giving them skin in the game.
Goldspot clients include naturally Sprott Mining, Hochschild Mining, McEwen Mining, Yamana Mining, Integra Resources and global iron/nickel miner Vale of Brazil.
The company takes a consulting fee and may take a share in the project or a royalty stream on any future production. To date, royalties exist on four junior projects, if they bear fruit.
Projects range from United States and Canada to South America and Africa.
One of the companies Goldspot is involved with targets rich gold-bearing veins in Newfoundland. NewFound Gold Corp. is still a private company, founded by Goldspot’s founder.
NewFound is 62 per cent owned by two of Goldspot’s big investors with 16 per cent by insiders.
Recently, TSX venture listed Novo Resources bought 15 per cent for $11.7 million.
In three years, Goldspot revenue has increased from $170,000 to $2.3 million, but the company is still losing lots of money. The value of its investments increased $491,000 to $4.8 million.
The company entered this year with $4.7 million cash and no debt.
While work is focused on gold, other minerals can be found using this machine learning.
Goldspot will either find its place as an investment or flounder in the next two years. This is a highly speculative stock at the recent price of 21.5 cents.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at [email protected]
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
