Business Model
I
would add an additional piece to the Discovery Bonus.We
should try to modify the program so that the bonus is paid to those involved
in a discovery even if they have left PD.For
instance, if Ambatovy becomes economically viable due to nickel price increase,
then Mike Evans and the others who worked on it but who will not be working
for PD should still receive the benefit for the value they added to PD.This
should not apply to discoveries from recon or conceptual programs, but
to projects that they actually worked on and contribute to.
Executive Summary
The Global Mine Discovery Partnership, LLC (GMD) is focused to provide a low-cost, effective and rapid natural resource discovery supplement or alternative to major mining companies. We are committed to continue the discovery of high-value natural resources to both replace and grow the natural resource reserve base of select clients.Our mission is to be the global team of choice that delivers low-cost, value-adding, rapid, and timely mineral discoveries for the natural resource industry. By aligning our goals and objectives with those of the client and maintaining the highest ethical standards, the key to success is a small team of successful and driven professionals focused where the client is not presently active. Additionally GMD may provide a low cost longer-term strategic diversification growth alternative to the mining industry in select complimentary commodities.
GMD goals and measures of success, valid mineral discovery or acquisition, are aligned with the goals and rewards of the clients. GMD will augment and expand, but not compete with a client’s existing programs. We want our clients to believe that our fees and bonuses are a small cost compared to the value added through natural resources discovery and acquisition. Effective mineral discovery remains the best alternative to lever scarce capital into significant long-term wealth.
Our approach is global. We are a well-respected multi-cultural team of professionals experienced in the most productive regions of the world and current in the geologic and social-political status of these regions. We maintain a broad and diverse network of connections and professionals throughout the world.
Using proven ore finders, the critical components to rapid cost-effective discovery are:
†Focus,
†Rapid turn over,
†Commitment to drilling,
†Low overhead,
†Selective application of public and private data,
†Close alignment of the goals with those of the client,
†Knowing first hand the difference between economic deposits and interesting prospects is cornerstone in economic discovery,
†Explore less and discovery more
Our broad abilities and proven discovery record represents a diverse balance in base and precious metals augmented by select experience in industrial minerals.
We believe
it is possible to assist select clients in meeting their needs for the
new resources necessary through coordinated, collaborative, focused, and
practical rapid-paced exploration / discovery programs. Using
our talent as proven ore finders, GMD believes the costs to discover natural
resources can be much lower than the current industry averages. The key
to mineral discovery lies in the wise focus of a small-motivated team of
well-connected innovative professionals. The strength of GMD and the talent
within the client’s organization must be complimentary. GMD can represent
the client in new areas or for new commodities.
GMD wishes to share in the incremental success of projects advancing toward production but does not wish to hold ownership or advance mineral properties on its own. GMD is committed to the seamless passing of a mineral prospect through to the decision to develop the deposit through participation aligned and closely coordinated with the client’s development and production personnel and company framework.
In conclusion, Global Mine Discovery Partnership provides a low-cost value-adding alternative to expand or replace existing client natural resource discovery programs. As the name implies, we measure our success and wish to make our profits on making valuable natural resources discoveries on behalf of our client. The value of the addition of new ore reserves must be greater than the investments to discover or purchase new reserves.GMD can function as a partner with the client in providing low cost sustainable resources to meet the client’s growth objectives.
Our Vision
Discover major high-value natural resources for select raw mineral consumers and producers. Add significant value to our client’s organization through rapid-paced, cost effective, focused and well conceived programs lead by a small discovery driven team of dedicated business oriented professionals aligned with the client’s goals and successes. Provide vision and guidance to companies in their geographical and commodity diversification growth strategies.
Our Mission
Through multiple successful discoveries and select high quality prospect portfolio, build and set the new global standard for a new discovery / mineral exploration business model. Devise and implement focused client programs that cost less than conventional programs and which returns considerably more value from the client investment.
Current Global Exploration / Discovery Business:
The
minerals industry discovery model, so effective in decades past, is not
an effective means of organizational growth today. The total investment
by all the companies needing to replace and expand their reserve base is
far greater than the value of the deposits found over the past 10 or more
years. Many companies are necessarily reducing their exploration efforts.
While some originations are staying even, the industry in general is not.
Acquisitions and mergers, while an effective strategy to secure additional
known resources and reduce costs, is not the only sound strategic plan
to grow in the minerals business.
Despite
the low commodity prices and lower profit margins in the minerals sector
in general, the global demand for most commodities continues to expand.
New resources need to be found to replace those mined and feed the growing
consumption of most commodities, worldwide. Operational savings and new
technologies are insufficient by themselves to replace and expand mineral
production. A new mineral discovery business model is required. Effective
exploration remains the best value-adding alternative for sustainable growth
The “junior” mining / exploration companies are not a source of quality properties and discoveries. Driven by their own stock needs, their goals are not the same as the major producers. Investment in and stock subscription rates have fallen drastically in the past five years. Even the best junior companies with quality properties are finding it difficult to raise capital to invest in drilling. The model for new mineral discovery, both the historical major company approach and the stock-driven junior search, is not performing well enough to add the new resources that the companies and customers want and need.
The mining business is consolidating and the synergy saving are eliminating many of the exploration departments. The source of new, well-trained motivated young talent is shrinking worldwide. Additionally, universities enrollments in geology and engineering are not as popular as the high technical and service career paths.The price and margins for commodities continues to decline; however, the need for natural resources continues to grow worldwide. New technologies will continue to reduce the costs to produce commodities. However, these new technologies do not provide organizations with the competitive advantage necessary to meet their growth objectives. A new approach to mineral discovery is needed that is:
·Low cost.
·Focused on clear objectives and measures success with value adding results.
·Fast paced.
·Driven by motivated people with a proven discovery track record.
In summary, the current mineral exploration / discovery business model is not serving the industry well and for some companies, not at all. More is invested globally in mineral exploration than value is added though economic discoveries. Mineral production is at an all time high and the growth rates for most mineral commodities are positive. New resources need to be found to replace the ores mined each year to meet the customer’s future demand.It is time for a new discovery business model.
The
current exploration discovery model is broken, yet the need for new economic
reserves is the vital lifeline to the future.
A formula to improve the odds of success:
While large areas of the earth have been explored, major regions retain excellent mineral discovery potential. New discoveries can be made without major administrative expenditures or costly data generative programs.
The formula for success is focusing the best people within a stimulating environment to discovery new deposits using a combination of new areas, new techniques, and new ideas.Neither the education level of the prospectors nor the amount of money spent in exploration programs is, or historically was, the key for success.
Motivated people with a drive to discover more ore with less money and in shorter periods of time are the keys to improved success. People with new ideas in areas previously explored, new technology applied in areas previously explored, and any approach in new areas.
Key components to Value adding mineral discovery:
Low
cost
Proven
ore finders
Focused
/ hungry
Fast
paced
Goals
and objectives aligned with metrics of the client.
Service
Strategic
planning
Select
property portfolio
Collaboration
with the client’s professionals
Public
data and access to the client’s data archives
Specific
strategy for each client
Networking
Bonus
only for economic success
Our approach, a core of trained and discovery motivated professionals, can work directly in the most favorable areas while adopting a more passive listening approach in areas with more risk. There are significant amounts of public domain data and a large number of consultants with both business and local experience competing for fewer positions in the traditional exploration / discovery business.
We will tailor a search / discovery to accommodate the specific growth needs of the client, and can do it without divulging the client as the beneficiary of our effort until projects are well advanced. Our proposal is to work to tailor a specific program that fits exactly what the client needs to grow. If the client is well positioned as a single commodity company, GMD Partnership can focus a diversification program in the best areas to can add substantial value and balance to your organization’s business portfolio.
Diversification for long-term business balance
The
reasons for diversification, as a company, are captured by the Risk vs.
Return comparison for various mineral commodity sectors. Single commodity
companies understand well both their risk and rewards
environment, ride the cycles, and worktry
to mitigate the risks through operational excellence and improved technology.
Well-diversified companies are riding multiple cycles that in aggregate mitigates
risk and tends
to returns
rewards regardless of which commodity is on a low cycle.
In
conclusion, GMDwe
can also provide strategic reviews of the economic and geographic balance
for optimum business growth within the mining sector. Our personal experiences
and business observations from the resources point of view might well prove
a valuable balance to the corporate mission
and vision.
Cost savings and general structure:
A small group of well-networked professionals can work significantly reduce the administrative and overhead costs, and through wise and rapid decisions, spend less on average targets and more on the highest quality ones
:
†Align goals with the company = incentive is valid discovery
†Rapid turnover – no incentive to hold on to average properties.
†Use what works and focus on the best.
†Use consultants as necessary
†Work closely with the client and coordinate seamless project transition toward mining
Funding
The
general business model is for the client to fund a focused spartan several
year staged program that covers modest wages and expenses to identify and
acquire high quality targets that meet their strategic growth requirements
in areas they are not currently active. For those targets worthy of additional
testing, GMD can continue deposit definition activities until the client
wishes to assume a more proactive role. The client commitment should include
exploration funding through at least through the initial drill testing
of viable high quality targets.
Incentive / bonus
Our
incentive is the client’s success and a staged discovery bonus for our
participation would be paid only when significant value is added to a project.
Our measure of success is the successful fulfillment of our client’s growth
and reserve replacement objectives.
A
system in which the partnership has a valid stake in the outcome – can
be the difference between technical success and real value adding discoveries.
Next
Steps
We
are prepared to further discuss these concepts and provide additional detail
of our approach, the staff, and the state of the industry with your staff.
We look forward to brainstorming with your leaders and presenting specific
programs and proposals that are focused to satisfy your growth expectations.
Discovery necessarily starts with agreement on the goals, the metrics leading
to production, and a clear understanding of clients needs and wants.
§Here
again is the question of value added at steps.If
positive scoping leads to negative prefeasibility, what value did the company
receive—experience
yes, but there are also lost opportunity costs.We
can calculate a theoretical value at each step, but it only accrues to
PD at positive feasibility (sale) or production.