Innovate or die
The real game-changer here is that this plug-in business model requires negligible up-front costs for the companies that own the deposits, Pekeski adds. This overcomes one of the two biggest hurdles faced by cash-flow-constrained companies that are chomping at the bit to get into production.
The other major barrier involves permitting, which is mostly a factor of meeting stringent environmental requirements. Fortunately, Equitorial’s technology negates any need for large amounts of water and associated tailings ponds. This risk-mitigating reality is what promises to simplify and accelerate this permitting process. (More on this in a moment).
Once ore and/or well-mineralized surface tailings are ready for processing (and permitting is in-place), the mineral extraction process can be facilitated inexpensively. And it can be up-and-running as soon as Equitorial’s modular technology is assembled, which is a process that takes no more than a few days.
Most importantly, this state-of-the-art technology allows for the generation of near-term cash flow, which in turn paves the way for a fast ROI (payback)—a huge value driver for any business model, especially in an industry where ROIs tend to be slow and can take up to a decade.
That’s going to be music to the ears of hundreds of mining juniors, for which this innovation represents a technological lifeline. Hence, Equitorial is only asking for a simple profit sharing arrangement with each mine’s owner after operating costs are deducted, he adds.
The big picture for Equitorial entails capitalizing on a very scalable, untapped marketplace one project at a time. This ultimately could involve commercializing as many as hundreds of smaller, languishing deposits, especially gold assets. Needless to say, this would eventually require the building of multiple ore processing/extraction units that could be transported by road from one mine site to the next.
Getting back to the topic of environmental stewardship, Equitorial’s technology limits environmental discharge and conserves water because it can operate with negligible water needs. This is achieved by recycling water through a clarification and purification process. Furthermore, the system reduces or eliminates the need for the use of toxic cyanide, mercury, or any other toxic chemicals. All of which are huge competitive advantages in near-term production opportunities.
Consequently, there is no need for tailings ponds and tailings dams (which pose perhaps the greatest risk to the environment, as illustrated by last year’s Mount Polley tailings dam collapse/disaster in northern British Columbia). In the wake of this man-made calamity, this water-sensitive solution for small-scale and high-grade mining is expected to go over well with gun-shy environmental regulators and mine operators, alike.
Among the gold deposits that are ideal for this unique business model are ones that are in remote, arid, or environmentally-sensitive areas. In which case, this technology can also be used for contamination and heavy mineral clean-up applications—a multi-billion dollar business worldwide. And because this processor/extractor is easily portable, it can be transported almost anywhere that has road access, including dirt tracks.
It’s also worth noting that this business application is not constrained by size. Even though it is ideally-suited to small deposits, it is very scalable and can take on bigger challenges if necessary. In this regard, it can ramp-up to as much as 2,000 tonnes of ore per day. Furthermore, ongoing field testing has shown that high-value concentrate can be generated with the form of gold extraction.
According to Bob Beaty, a longstanding stock market commentator and former investment advisor, Equitorial’s disruptive new technology is a great tonic for tough times—one that can breathe new life into struggling mining juniors.
“Immediate cash flow may reduce or negate the need for external financing as the funds from processing can be put back into mine development and production,” he says.
“That said, the operator's increased return on investment and production-based valuation metrics make it a much more attractive candidate for capital investment. Employing the funds from operations would of course be non-dilutive financing.”
In summary, the prospect of low Capex and operating costs, matched with near-term cash flow, high mineral recovery rates, as well as fast permitting due to a negligible environmental footprint, all make for a winning strategy. One that greatly improves a company’s risk/reward metrics for an increasingly risk-averse investment public.
To put this in better perspective, Pekeski says: "Our mandate is to reduce or negate the significant risks to both our shareholders, as well as those in the mining industry.”
Will the desperate economic imperatives facing today’s mining industry lead to the widespread adoption of this ‘green’ technology? Only time will tell. But as company treasuries continue to dwindle while mineral assets languish, time appears to be on Equitorial’s side. Which is why Pekeski looks forward to plenty of profit-sharing opportunities unfolding over the next year, and beyond.
A lifelong football fan, he regards this innovation as a Hail Mary pass to an industry that can no longer afford to fumble the ball in the end zone.
The principals of www.BNWnews.ca do not directly or indirectly own shares in any of the companies mentioned in this article.