At the AME Roundup Conference 2020 in Vancouver, BC, which is happening this week, the Innovation Stage had a panel of companies that offer technologies that can help mining companies. Stephen (Steve) De Jong, CEO of VRIFY Technology Inc. and Chairman of Integra Resources, led the panel discussion on Monday, Jan 20, 2020, on how technology is reshaping the industry. De Jong is an experienced front man, and, it may be said, spin doctor. After all, he is the man who launched the Integra Gold Challenge, a “crowd-sourced exploration data challenge that culminated in a Dragon’s Den-style finale” and in a recent article in CIM Magazine, he talks about the power of preparation and practice to master and present the perfect pitch. True, that. And he certainly can deliver a pitch.
How to communicate with investors
But De Jong was hard-pressed to keep his panellists to the subject at hand, and to get his point across. His angle was that technology (software and hardware) is not an end in itself, but simply a component of tools that can be used to communicate better with investors. He repeated this message at his presentation on Tuesday, Jan. 21, 2020, and re-emphasized the two key words: “communicate” and “investors”. If his presentations contained a thread common amongst the talks of the other speakers, exhibitors and moderators, it was that cash injections are difficult to get.
Active and passive investors
Many of the talks were about EFTs. Traditional exchange-traded funds (ETFs) are available in hundreds of varieties. But while passive trading is a popular strategy among ETF investors, it is largely a convenience for investors, not exploration companies, since it provides a low-cost way to implement indexing or passive management. Fact is, a mine or project owner cannot easily communicate with, or influence such an investor or group of investors. On the other hand, active trading means an actively managed fund in which traders track the direction of the market and trade accordingly. Fund managers can be very specific in what they track, and can benefit from communications from mining companies.
Let the experts get on with it
All on the panel agreed that communication with these potential active fund investors is crucial to a project or a mine’s success, to get funding for development and expansion. They also acknowledged that the usual way of presenting information, by news releases and Powerpoint presentations with captioned maps and diagrams, is not the best way to go about this because the general public and non-mining people just do not understand what they are reading or looking at. While the professionals – with decades of experience and armloads of qualifications – do their jobs with the advanced tools at their disposal, and should be left alone to get on with it – owners need less technical ways to interpret and present this information to investors when they pitch their projects.
Elephant and Slick
De Jong used a very telling example to demonstrate this. As a social experiment of sorts, he had created a fake company with its own booth. He called it “Elephant” and manned the booth with an actor who VRIFY calls “Slick”. Slick is the “mining guy” who talks strangely familiar-sounding twaddle in VRIFY’s award-winning and very funny (and true) video series called “School of Mining Promotion”. This really happened: Slick showed visitors a map with fake resources indicated on it, that looked like a real geological map, but wasn’t. It was a map of Mars, actually. De Jong said that he had expected that “95% of people that stopped by would think it was funny”. What happened was that “60% of the people left their business cards” for a follow-up. They had swallowed the story. Oops.
(Video from VRIFY starring “Slick”, produced by Pink Buffalo Films)
For him it proved that, to most non-mining people, the terminology used to pitch exploration projects just amounts to gobbledygook. “People don’t understand geophysics or geology. They are just a bunch of numbers on a map,” said De Jong. (Or else it’s a case of TLDR.)
*TLDR – Too long, didn’t read.
How to pitch your project better
De Jong’s VRIFY provides a solution – a platform on which information on a project can be viewed online in an interactive 3D model with 360° satellite images to highlight property boundaries, and photos, documents, video footage, plans and survey results integrated into one navigable model. It’s quite edgy. Subscribers can use one platform to set out their entire “investment thesis” to get those all-important active traders on board.
De Jong said that if there is one word for mining in 2020 it would be “divergence”. He predicts that this year the time will come when investors will be able to distinguish companies that have real assets from those that don’t. He used the example of when companies refer to a drill hole in a NI 43-101 report, the investor would not know the history of that drill hole. While the drill hole data in the report means that the report is compliant with the reporting standard, it is not understandable to non-technical people. The solution to this problem is greater transparency in communications – for instance, showing the historical drill hole data in news releases. And how do you get that done? By including the historical data in the interactive 3D model – as you can do with VRIFY. In that sense, exploration companies are held accountable for the accuracy and clarity of their results.
Pros and cons
VRIFY’s client base has grown to 120 clients in the past year, but De Jong is still, like a messenger, delivering news that, judging by their faces, people in the audience found unpalatable and in olden days would have gotten him dunked in the local pond. (Despite the fact that his presentation, of all those on the Innovation Platform, was the best designed and most effective.)
I have a couple of caveats on his arguments: Firstly, it seems that many people think that the state of investor communications is not a burning platform – “we have been doing it this way for years, why change now?” Indeed, if a system is not thoroughly broken, why fix it?
Secondly, it’s not that De Jong’s company is the only one that can do this type of information design – there are others – but VRIFY does offer a compelling combination of information and functions all together in one place. This way of communicating is now easily useable and available as an alternative to the ubiquitous wordy .pdf or slide show – the applications have moved beyond adoption by the innovators into the early majority.
Thirdly, De Jong may be underestimating the knowledge and skills of a great many people in the investor community. It is easy to use personal experience and anecdotal evidence as a basis for a business case – but I wonder if this could be proven with a proper study or assessment. As the demographic changes and new generations move into the field, there will eventually not be mining or investment people who do not know what it is to work in cloud-based apps and see everything in 3D.
Finally, though, considering the continuing scarcity of capital investments for mine development, once exploration companies and mine operators have exhausted all the other tactics and manoeuvres to get money, they might decide that the only thing left to do is to jack up their communications and move over to modern methods.