Windfall Geotek (WIN) - Can AI Find Better Targets Than Humans?

Windfall Geotek (formerly known as Albert Mining) is a Canadian corporation offering a proven and industry-leading digital platform leveraging Artificial Intelligence (AI) technologies to significantly improve outcomes in the exploration, development, operations, and financing of mining projects. The principal market encompasses the global resource mining industry including virtually all forms of mineralization including oil and gas exploration. 

Matt Gordon caught up with Dinesh Kandanchatha, Chairman and interim CEO, Windfall Geotek. He has over 2 decades of experience in start-ups and early-stage companies, helping raise over $100M, translating into over $1Bn in shareholder value.

Mr. Dinesh has overseen multiple IPOs and acquisitions for several technology companies. He is the Founder, former President, and CTO of Patriot One Technologies. He currently serves as CEO at Macadamian Technologies. His educational credentials include a Bachelor's degree and an MBA from the University of Ottawa. He also serves as a Board Member and Advisor for multiple public and private organizations.

Company Overview

Windfall Geotek is a corporation that provides AI-powered tools to assist in the discovery, exploration, development, and financing of mining operations. The company was founded in 1996 and is headquartered in Canada. SIMACT Alliance Copper Gold Inc and Tropic Diamonds Inc. are the company's subsidiaries. The company is listed on the Toronto Stock Exchange (TSX-V: WIN), the OTC Markets (OTCQD: WINKF), and the Frankfurt Stock Exchange (FWB: L7C2). Since 2004, the company has added value for over 30 client discoveries and more than 80 target generation projects around the world. 

Windfall Geotek utilizes artificial learning, AI, and machine learning through data models to sift through public and private data for identifying potential targets for base metals, copper, zinc, nickel, lithium, cobalt, and precious metals. The company is approaching the 100-projects mark and is credited with over 30 discoveries, many of which featured equity participation. The company's business model is targeted around asset creation. These assets are digital in nature and work as marketable securities, helping generate royalties. Windfall Geotek's digital tools enable companies to identify targets with added certainty, leading to less drilling, cost savings, and a reduced environmental impact. 

The company's revenue model features 3 key components. It charges a fee to the clients, along with an equity component which can be in the form of a check swap, and the last component is royalties from major mining companies, usually in the form of multi-year contracts. 

The company assists clients in reaching funding milestones by identifying high-quality targets that are capital efficient. This facility is usually charged in the form of equity. The company offers a flexible model as it is invested in technology, data acquisition, data engineering technology, and cloud computing that helps advance projects at a rapid pace. Shorter time frames help faster advancement of projects, savings in capital invested while bringing a significant value to the marketplace. 

Operational Challenges 

Windfall Geotek has a phenomenal algorithm in place that is designed by consolidating large chunks of public data sets. The company focuses on maintaining a reputation and picks up contracts that it can successfully deliver. In the past few months, the company started processing public data and analyzed different iterations and challenges that are a part of working with public data. 

The company has also been working on the development of an engagement model at the commercial level. This would enable quicker transactions for customers. This is an ongoing challenge for the company due to the sheer number of contracts in mining. The company is working closely with various partners, primarily investment banks to accelerate the commercial aspect of the business. 

The final business challenge is the legal aspect since the contracts are live for up to a 20 year period. However, changes in a company's structure and iterations can pose a challenge when trying to enforce these long-term contracts. The company is looking for ways to remedy this bottleneck. 

Financial Model

Windfall Geotek isn't looking to raise additional capital from the market. Its business philosophy is targeted towards avoiding outside capital unless absolutely necessary. This is because a capital raise is expensive for the existing shareholders and it leads to the dilution of the company. The company's business structure features immediate-term contracts which help fund the ongoing operations along with long-term NSRs (Net-Smelter Return) agreements. 

The company also has marketable securities that are a result of various drill targets from projects executed over the years. These securities have the potential to be publicly traded and can accrete in value over time. 

One of Windfall Geotek's recent projects was with Grand Pacific Resource, where it was offered a 20% stake at IPO in the business, a 1% NSR and a 1% buy-back along with associated professional fees. The company also announced in June the drilling of the DIOs project; these projects have demonstrated the company's value proposition. 

Windfall Geotek also has equity in the K2 Property, a 150,000km² asset. The company had a 0.87km² target area at this site. This target area is currently being drilled and results are expected to follow in the coming months. 

As mining companies perform drill operations on Windfall Geotek's identified targets, it leads to validation and appreciation of its work, leading to new business opportunities and revenue generation. The company is focused on building long-term asset value in projects where it reinvests a portion of the earnings. The company is currently looking for ways to further optimize project timelines. 

Optimizing the Process

A key part of Windfall Geotek's strategy is to reduce the friction for people adopting new technologies, while also making them easier to understand. A major part of the company's technology roadmap is focused on its proven algorithm. The company has been successful in solving the data acquisition challenges, enabling it to incorporate and conclude projects faster. This also enables the technical experts to test out the company's tools without engaging in a contract. 

The company is working towards simplifying the concepts behind its technology, leading to an easy-to-understand format for geo-professionals, exploration teams, technical advisors, and management. This will also aid in the increased adoption of the company's tools within the market. The company has a simple web interface tool that enables the uploading of data and running simulations by leveraging its back-end data engineering and algorithms. 

Business Strategy

Windfall Geotek has a strong focus on base metals as it's a macro trend that is expected to grow in demand over the next decade. This is due to the growing battery metals and renewable energy market which is a result of the global push towards green energy. 

The company is helping customers to carry out drill operations strategically, conserving significant capital. The company helps customers develop targets in the primary phase of exploration. 

A New Management Team

Windfall Geotek restructured its management team in March 2020. The company is going through an organizational transformation and is looking to hire the right people for management positions. The company has outsourced the evaluation of management teams to bankers and is working in conjunction with investment groups to shortlist potential candidates. The company is looking to hire team members that have aligned interests. 

Windfall Geotek is taking a patience-driven approach when it comes to making the right decisions. The company is focused on striking deals that are accretive to the business while protecting further dilution of the shareholders. 

Targets 2021 and Beyond

Windfall Geotek has a current pipeline of 40 opportunities. A major portion of these are with senior mining companies along with early-stage companies that do not have a project yet. In the past year, the company has closed several deals which have resulted in the generation of projects for a capital pool. This is made possible through the company's public data while is vital in putting a project together with significantly reduced capital costs. 

The company's current project pipeline is at maximum capacity. The company's contracts determine the rates charged. This is a result of long-term relationship building along with the value proposition that Windfall Geotek brings to a project, enabling the company to earn a stake in projects. 

Windfall Geotek currently has 2 projects that were licensed last year and are expected to go public in 2022. This will provide further validation for the company's business model as it participated in private placement transactions as investors. The company will also assist in capital raises and execution of due diligence to help its customer go public.

To find out more, go to the Windfall Geotek Website