Windfall Geotek (WIN) - Prospect Generator Using AI to Find an Edge

Windfall Geotek (formerly Albert Mining) is a Canadian company 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 geologically focused projects. 

Principal markets encompass the global resource mining industry including virtually all forms of mineralization including oil and gas exploration. Recent advances have led to the detection of water sources and aquifers especially in drought regions, and of anti-personnel landmines and related deadly legacy hazards in conflict zones.

We had a chance to catch up with Dinesh Kandanchatha, Chairman and Interim CEO of Windfall Geotek, headquartered in Toronto, Canada. The company is engaged in the revitalization of the geologic exploration sector through the application of artificial and other advanced technologies and in taking strategic investments with partners using their technology. Kandanchatha shared with us some of the excitement and possibilities related to this very interesting company. 

Synopsis of Windfall Geotek

Windfall Geotek, offers a proven and industry-leading digital platform that leverages Artificial Intelligence (AI) technologies to significantly improve outcomes in the exploration, development, operations, and financing of geologically focused projects. Applications include mineral exploration, water resource detection and hydrocarbon extraction. An additional particular area of company expertise is in the detection of unexploded ordinance such as landmines in old war zones across the world. 

The company’s motto, “Where Imagination meets AI”, highlights the firm’s proven ability to transform geologic exploration across the globe. Windfall Geotek has over 78,000,000 shares outstanding. They trade on the TSX Venture Exchange.

The Management Team Management Team

Chairman Kandanchatha is teamed up with seven others on the management team: Simran Kamboj, President and Chief Technology Officer (CTO); Daniel Belisle, CFO; Michel Fontaine, Sales; Riadh Kobbi, Manager Data Modeling; Grigor Heba, Geologist/Sedimentologist; Jihed Chelbi, Business Intelligence; and Stephane Henry, System Administrator. The firm also benefits from a two-person board of directors.

Kandanchatha’s Business Pitch

Kandanchatha told us that Windfall Geotek is a technology company that has spent the last 15-years in the base metals exploration sector, using a combination of data science and machine learning to try to extract drill targets from public and proprietary datasets. The data are based on over 100 projects and over 30 bona-fide discoveries already validated in the market.

Kandanchatha’s background is in the technology sector. He was the co-founder of Patriot 1 Technologies. Overall, he’s built eight or nine technology companies over the last 25 years, two of which were taken public. He has sold two of his companies, one for $200 M and the other for $40 M. 

He joined Windfall Geotek about two years ago. He wanted to be part of the company’s technology for landmine detection, which is a real challenge and a scourge across many parts of the developing world.  He joined to try to figure out how he could make a difference using intelligence technology. He also began thinking that there was a great opportunity at Windfall Geotek to become an emerging leader in resource detection sector using the same technology methods. 

He is especially interested in resource detection and project generation based on analysis and use of public data using specialized technologies, cloud computing and carbon offsets to reduce or eliminate the carbon footprint of exploration companies in the early stages of their projects. Windfall Geotek is doing that in three ways:

1.       As a performance or outcome based business that obtains equity positions in each of the projects in which they participate

2.       By taking a net smelter return (NSR) as they can when they own a claim

3.       By building the premier data platform for the resource sector in the form of leveled and normalized public data, which will allow future exploration to be done in a more digital and expedient fashion

Overall, they want to provide a technology by which resource targets can be detected and evaluated faster and with fewer holes in the ground than ever.

Landmine Detection Component of Business

We asked Kandanchatha to expand on the landmine detection component of the business, which we found fascinating, to say the least. He responded by first describing the problem: Landmines or unexploded ordnance have been around for more than a century, he said, and some date back to those used in World War I. The shocking thing for Kandanchatha, is that there are still these WWI landmines out there. There are somewhere between 110 M and 130 M, depending on the count of these things around the world, he told us.

The landmine component for Windfall is really about the core R&D that they use in their algorithm. The algorithm doesn't know what it's looking at; it's looking at a data signature in the ground. As Windfall Geotek optimizes their data model, they should be able to move both the landmine component and the core resource component forward at the same time.

They are now working with NATO and the Canadian government to try to secure project funding for a field trial assessment. Upon completion of the field trials they will be paired with a partner to take this technology and bring it to market. It’s a project generator for Windfall Geotek and would supply the $700M spent each year across the globe on landmine extraction and decontamination. 

They intend to market to the Lookheeds and General Dynamics of the world to earn a percentage on every legacy ordinance deal they get. Kandanchatha shared that they are expecting three types of revenue from the landmine detection component of the business: immediate proof-of validation revenue from governments, customer-funded R&D revenue, and royalties. 

One of their biggest competitors is Caterpillar, Kandanchatha told us. They are using expensive specialized bulldozers to evaluate legacy ordinance issues. Each outing is labor intensive and expensive, about $900,000 a pop. With drone technology, Windfall Geotek can bring the deployment cost down to around $250,000.

Let’s put this into context, Kandanchatha suggested. This landmine problem has been around since 1918 and it's still not solved. What they have today is a set of new technical contexts that are creating real innovation to bear on this scourge. NATO is slow; it's not going to happen in 6-months, he told us. Kandanchatha thinks that he has one to two years to prove it out. Once proven, purchases will progress more and more, he forecasted. 

The Draganfly Partnership

Kandanchatha told us that they have partnered with a company called Draganfly, which is a drone provider that is servicing the US Military. They’re working with them to develop an operational product that can take their algorithm with the partner’s autonomous drones and deploy them into theatre operations in the Middle East, Eastern Europe, Ukraine, and other similar locations. 

The partnership with Draganfly allows Windfall to leverage their drones and do zero-carbon data augmentation. It's high leverage, he indicated, so it doesn't require incremental investment, it just requires them to continue to build a platform that allows people to go out and look for different things that are in the ground. 

He told us that the partnership that they have with Draganfly is a win-win, Windfall Geotek  is a software company and Draganfly is a hardware company. Windfall Geotek needs a hardware partner in order to be successful. At Draganfly, part of their business plan is expansion into the resource sector, so it’s a natural partnership, he said. They are a solid global company, he said, one that took over a year to find and fully vet, he said. They have clients, they fly drones all over the world, and they have $50 M in their coffers, and he believes that this partnership will last for years. So far, they have invested $500,000 with Windfall Geotek.

Natural Resource Exploration

We then turned the conversation onto Windfall Geotek’s plans for the resource component of their business.  The company considers itself the only pure project generator that harnesses AI technology to streamline and pinpoint subsurface targets. Their main beneficiaries are junior and mid-sized mining companies, which are viewed as ideal partners for the innovative technology they are perfecting. 

To date they’ve had very good results: With base metals they are very successful and they have a good track record on precious metals too, said Kandanchatha.  They are starting to validate landmines and there are further types of things that are in the ground that are very valuable; water comes to mind, that they can start thinking about once Windfall gets this stuff fully figured out, he said. 

We told Kandanchatha that we were interested to see that they view their wares as a zero-carbon solution. He responded by saying it’s all about environmental impact. We’ve seen advances in remote sensing over the years such as aircraft, satellites, drones but not AI. And now with the push for carbon neutrality, this is a new component to the game.

Many big governments have tons of data to use, he said. Windfall Geotek’s approach is to utilize that data and other data and put it on the geologist’s desk where they can perform rapid, intelligent and carbon-neutral prospecting to explore for high quality targets. And they are doing just that, he said: Their evolving technology made its first discovery back in 2006.

The ultimate goal is to have an easy-to-use and powerful front-end on the geological team member’s desk. That would be an explosive model for revenue generation for the company, he said. Think of the average prospect-oriented geologic team, he went on. They may have a portfolio of say 25 leads and prospects value-ranked according to their own criteria. Why not cross check that value-ordered list against what comes out of our AI technology. If the same top two are on both lists, that would add quite a bit of confidence to their recommendations to management, he said. Maybe Windfall Geotek lets them use the tool for free, but if they generate a target, Windfall Geotek would like revenue share in it. 

Another thing that they are trying to do is appeal to existing mines and mills. They’d like to use their technology and chase the anomalies beyond the borders of existing claims, he said. They then would stake out new adjacent claims, he said. The mill is going to need feedstock one way or another and all shareholders will benefit, he summarized. Excellent revenue streams can be generated in this way. 

How Does Windfall Geotek Stand Out From the Competition?

We’ve seen other firms that like to use public data and feed it into their own algorithms, he told Kandanchatha. What makes you believe that you’ll come out ahead of the competition?

He suggested that he's a proven AI technologist and that’s not a trivial matter in this game. He has founded AI companies. The last one he sold fetched $210 M on $1.2 M paid-in capital. His track record stands on its own legs, he said. Furthermore, his burn rate is less than $100,000 per month, which is at the low end compared to competitors, he added. 

Why Did Windfall Geotek Go Public?

We then asked him why he went public. He didn’t have a choice, he said. Albert was a public company that was converted into Windfall. They didn’t think it was in the investor’s interests to take the company private, he told us. The technology that was developed over 15 years under the Albert name was effective and they didn't want to erase that.

Kandanchatha wanted to keep the core technology developed up to that point and not start from scratch. If the core technology is good, one should keep it, he said, adding that management and staff can be changed if the financials are not meeting expectations despite having good tools. And the core technology that they kept is the data model that they continue to build upon.

The Nature of Data Models

The data model is a way of collecting different types of data and putting it in a framework so that one can generate insight from it. The big challenges in machine learning are that the data are in different formats. Actually understanding how data inter-relates is difficult.

Windfall Geotek’s data system works like this: it ingests data, taking things in different formats, then putting it into a format that can be used for analysis. It then executes a series of algorithms that have been built and optimized to evaluate the data. Out of that comes a series of 1s and 0s. These are dropped onto a map and now the geologic team can spot leads and prospects, i.e. they come up with a set of drill-able entities. It’s a simple 3-step process that would take years to recreate from scratch.

Management Changes

We then asked him why he got rid of some people in the company. He told us that when he got involved Windfall Geotek was a service company. He said that he sees little value in service companies. The transformation to a technology delivery company required bringing in some top-notch specialized people.  They attracted people who believe in the project generator model, and buy into the fact that there's a better way of doing things that doesn't require getting out in the field in every case. And these people are also committed to the carbon-neutrality imperative. 

Thoughts About Financial Returns

Nearing the end of the conversation, we asked Kandanchatha to comment on his expected returns. He replied that they are not going to be generating revenue but that they expect to generate returns. Our business is based on an asset model, not a cash-flow model, he told us.

He explained it further: The key thing is that Windfall is getting pieces of companies pre- RTO, pre-IPO, in the about USD $0.02 range, then they are going to go public - that’s the way the junior sector works.  And when they do, there will likely be a 4-6 month hold and then our company will generate analyses for them. In that way, they intend to obtain a piece of their action.

Another way that they expect to generate returns is to access other capital pools and provide them with resource targets. These targets are going to need data augmentation and the pools will write a cheque to get Windfall Geotek to come back and do level-2 and level-3 analysis. It's going to be noisy, perhaps a couple of $M/year, but if the burn rate is only $100,000/month, that's all one needs to really focus on building up those portfolios and generating long-term returns, he stated.

He shared with us the details of his financial business model: He looks at gross margin, OPEX, quarter-over-quarter revenue growth - those are all the key measures. He doesn’t look at CAPEX expenditure on R&D and go, oh, that's something I should be proud of, because it doesn't generate cash-on-cash returns. He can't get the intrinsic value from the discounted cash flows. But at Windfall, they are building an asset base, and as long as the free cash flow from the asset base covers the cash burn then they don’t need to raise more money. From the shareholders’ perspective, if one doesn't need to raise more money, there is no dilution. That means the company stock becomes more and more valuable.

To find out more, go to the Windfall Geotek Website