The goal of the fund is to capitalize on the valuation gap between an exploration idea/concept in the private, non-listed stage, and a drill-ready project in the public stage. We have experienced large revaluations when prospective exploration projects go public.
To achieve this goal the fund will leverage its network of (exploration) geologists, financiers, brokers and other (institutional) parties to work the exploration idea towards the drill-ready stage. Initial field work with boots on the ground encompassing first pass geochemical and geophysical exploration programs.
There is a lack of new significant discoveries in the resources space, mining reserves are depleting, and the average mining grade is dropping.
Also, capital for grassroots exploration, that is the search for potentially mineral-rich terrains, is scarce as miners are currently focused on restoring their profitability and conduct brownfields exploration at best, that is searching for additional resources in the close vicinity of existing mines.
Oreninc Canadian Resource Financing Index
The result of these observations is that there is a severe shortage of newly generated projects that could result in significant discoveries of economically viable resources.
We think our technical advisory team is exceptionally talented in generating “out of the box” modern geological concepts in un(der)reckognized mineral belts. As we tend to stay away from “the shadow of the headframe” we have not experienced much competition for exploration licenses resulting in very budget friendly exploration programs over vast areas.
All our companies are basically going through the same process:
- Conceptual geological idea based on public available (government) data
- First pass scout exploration program
- Staking / acquiring licenses covering the entire target area
- First pass wide spaced geochemical (rock/soil/till sampling) exploration program
- Follow up geochemical exploration program (including trenching) focused on the anomalies generated by the first pass program
- Follow up geophysical program
- Drill ready project ready for an IPO or an other liquidity event
We are strongly monitoring every exploration phase, this enables us to kill a project early on if exploration results do not warrant further investments or other problems arise. Keeping the costs of failure relatively low.
We also aim to minimize other risks, i.e. geopolitical risks, as grassroots exploration is already very risky by itself. We fully expect most conceptual projects we fund will fail, but this should be offset by the projects in which we realize viable advanced exploration targets.
Furthermore we intend to involve accredited co-investors to act as a reality check for the attractiveness of the investment proposition and lower the financial risk of the fund.
Nonetheless we recognize the risks of grass-roots exploration programs and as such it is of vital importance to spread the exploration risk over an extensive array of projects as the odds of success are relatively low. Currently we have four active exploration programs ongoing on different projects with a few more pending. Click on this link for an overview of the current active companies.