All posts by Giles Gwinnett

West Red Lake Gold Mines going for gold in legendary Canadian district

Anyone who knows anything about Canadian gold mining will be familiar with the legendary Red Lake Gold District in Ontario.

It’s home to the Red Lake mine, one of the world’s most prolific mines owned by one of the biggest producers of the yellow metal: Goldcorp (TSX:G).

The district has produced over 30 million ounces of high-grade gold, and other major operations in the area include the Madsen and Starrett Olsen mines, owned by Pure Gold Mining (CVE:PGM), and Goldcorp’s Red Lake, Campbell, and Cochenour mines.

Well on the way to making its own mark in the district is junior explorer West Red Lake Gold Mines (CSE:RLG).

The company’s 3,100 hectare property hosts three former producing mines, lies just 20km from Goldcorp’s Red Lake mine and boasts a management team that is expert in bringing gold projects to the point where they are bought out by bigger producers.

“We explore and develop gold projects – outline a gold deposit or what could be an underground mine in the case of our present project,” explains president John Kontak.

“We would, say, take a company of $20 million market cap and develop the project for a transaction that could be worth a couple of hundred million dollars. That’s what we’ve done before and that’s what we’re working towards now,” he said, adding that it’s a two- to three-year strategy.

And this team certainly has form.

Entrepreneur Tom Meredith is Executive Chairman. He was formerly head of VG Gold, where he worked with West Red Lake’s exploration manager, Ken Guy, and took a $3 million market cap firm to the point where it was sold to Goldcorp founder Rob McEwen in a transaction valued at approximately $200 million.

Meanwhile, Kontak was formerly president of Victory Gold Mines, where Meredith and Guy were also involved. It owned a former open pit east of Timmins that was later sold and is now part of Osisko Mining (TSX:OSK).

The team (including Meredith, Guy and Kontak) took on West Red Lake in 2014 during the gold bear market, sorted out some legacy issues, and in February of 2016 filed a NI 43-101 inferred resource estimate for the Rowan mine target of 1.087 million ounces at 7.57 grams per tonne (g/t) gold.

West Red Lake has three former mines on the property – the Rowan, Red Summit and Mount Jamie mines. The latter two are owned 100% by the company, while Rowan is 40% owned by joint venture and funding partner Goldcorp.

Rowan is currently the focus of attention, where the company is operator and over 500 holes have been drilled to produce that NI 43-101 estimate.

The Rowan project consists of two main exploration targets. At the former mine, the goal is to significantly increase the resource to allow for a long mine life.

Then there’s blue-sky potential at another target, a structural intersection where two regional gold-bearing structures meet.

“That’s what happened to Goldcorp,” exclaims Kontak. “It found a zone and that took it from a junior to a multi-billion dollar company.”

It’s worth noting here that Goldcorp’s Red Lake mine produced a whopping 375,700 ounces of the precious metal in 2015 alone.

The geology of the Rowan mine is a fairly simple archean greenstone, Kontak explains, whereas the intersection target is more complicated, involving folding rocks.

However technological advancements in exploration nowadays means finding that “needle in the haystack” is increasingly plausible.

West Red Lake started drilling again at Rowan in January, having completed two programs last year, and plans to start a campaign every quarter while releasing assays from the preceding program.

The near-term aim is to expand the existing resource and in the future to upgrade into the higher-confidence “indicated” category.

The resource is open at depth and to the east and west, and there’s a 12km strike length so there is plenty of opportunity to work at increasing it, though there’s no specific time set for the release of the next estimate.

“This could be turned into an operating underground gold mine,” Kontak said of Rowan, pointing out there were many mills with spare capacity around in the area, along with good infrastructure and water.

The Red Lake region’s propensity to yield high-grade gold is also key to the story.

The 1.087 million ounces of inferred resource at 7.57 g/t was at a 3 g/t cut-off, and at a higher 5 g/t cut-off there were still 850,000 gold ounces inferred from just 2.5 million tonnes. The basic message is the higher the grade, the lower the costs.

Kontak explains: “You have to dig less rock out of the ground, you have to transport less rock to the mill and you have to crush less rock at the mill to get the gold.”

West Red Lake has a team in Toronto already trying to attract potential production companies who may be interested in buying the project in two to three years.

Financially, the company has around $1.5 million in the treasury, and is funded for its drill programs in the first and second quarters.

Management are significant shareholders, so they are obviously keen to see value enhanced.

With some attractive targets and apparent multi-million ounce potential, West Red Lake Gold Mines has it all to play for at a time of rising sentiment in the gold market.

This story was originally published at www.proactiveinvestors.com on Feb 14, 2017 and featured in The CSE Quarterly.

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Learn more about West Red Lake Gold Mines at http://www.westredlakegold.com/ and on the CSE website at http://thecse.com/en/listings/mining/west-red-lake-gold-mines-inc.

MOBI724 at the vanguard of payments and coupon revolution

We all know that shopping isn’t what it used to be since the arrival of smartphones and e-commerce.

What you might not be aware of is that the payments, promotions and coupon landscape is also undergoing a seismic shift due to emerging technology.

At the vanguard of this revolution is rapidly growing fintech (financial technology) company MOBI724 Global Solutions Inc. (CSE:MOS), which provides consumer services that weren’t available as recently as two years ago and is participating in an expanding global market that this year has an estimated worth of $10 billion.

Specialising in card payments

The company specialises in card payments and its core business, explained Chief Executive Officer Marcel Vienneau, is its card-linked platform, which when combined with digital marketing represents a new ecosystem allowing banks, merchants and customers to transact more efficiently with each other.

Card-linked technology is transformative for credit card points programs, and in addition enables card users to receive a tailored stream of offers and promotions on their smart devices.

To give a sense of scale, the company’s website says there will be just over 1 billion mobile coupon users by 2019, up from just under 560 million this year.

MOBI724 also offers digital payments solutions.

“This type of technology simply didn’t exist two years ago,” said Vienneau. “We are selling our solutions primarily to card issuers or banks in different countries,” he adds, pointing out that the company has customers in Canada, Asia Pacific and Latin America. In the Canadian market alone it has 400 customers.

“Most banks, anywhere in the world, have points programs where they issue points when you spend with their cards. Most of these cards enable customers to redeem points and get a reward,” he said.

Reinventing the technology

Perhaps the most significant aspect of MOBI724’s technology is that it has reinvented a clumsy, 20-year-old cost and payment structure, and thereby helps banks to make more money from card transactions.

Vienneau offers some examples of how the system worked in the past and how MOBI724’s better approach makes a difference.

A credit card customer has been awarded 25,000 points for using his or her card and can therefore buy a product with a $250 gift card. The card-issuing bank bears the cost of producing a rewards catalogue and the shipping costs of any product bought.

Now, say that a customer goes to an actual store and wants to buy a gift for $400 and include the $250 gift card value as partial payment. The current system is disjointed and the balance can be made up from cash, or another credit card, which might not be linked to the points system. Obviously, the customer doesn’t get the benefit of gaining more points.

MOBI724 simplifies the process by bringing all the strands together. It links the credit card, which issued the points, with the gift card. A customer can make a payment with an app and it both acknowledges that the gift card has been used and applies the balance owing to the credit card that earns points.

Similarly, when someone is in a store MOBI724 can send a coupon based on location or the customer’s profile, then the coupon can be used moments later at the cash register. The system can also send offers directly to a smartphone at any time, regardless of whether the shopper happens to be at a store or not.

In the preceding case of the $400 purchase, the bank charges a percentage of the transaction value when the points are redeemed, and so does MOBI724. The bank also wins by avoiding the necessity of having to pay for catalogues and product shipping.

“This is a new way to transfer a cost structure into a revenue-driven model, and it is seamless for the user and the bank,” said Vienneau.

It also taps into the way people engage with their banks and financial institutions nowadays – namely, instead of going into branches and using ATMs, people are putting “plastic into phones” and want more personalised interaction.

“Banks are losing their branding abilities but this gives them more channel opportunities,” Vienneau explained.

MOBI724 has invested considerably in its “business intelligence” capabilities, which allow it to map out people’s past purchases, social media interests and other distinguishing characteristics so that it can target them with specific coupons and offers.

“We are not just throwing everything at them,” said Vienneau.

The digital marketing aspect of MOBI724’s technology should also be of interest to advertisers, he points out, as it reveals consumer spending habits and other tendencies.

To that end, the company has struck strategic alliances with several agencies to help further grow the business.

Sales projected to reach $2.75mln for 2016

And growing it certainly is. Two years ago,annual revenue at MOBI724 was just over $100,000, and last year came in at $450,000. For 2016, sales are projected to reach $2.75 million.

Vienneau, a tech entrepreneur who became Chief Executive Officer when the group listed on the Canadian Securities Exchange in February 2015, expects to double revenue in 2017, along with crossing the line into positive EBITDA territory around mid-year.

In the next 36 months, the aim is to have $50 million in annual revenue and an expanding sales pipeline.

Vienneau designed the card-linked technology himself, planning the concept on a single sheet of paper four years ago.

The digital coupon market is projected to be worth $50 billion in the next three years and he reckons MOBI724 is well positioned to win a meaningful piece of this.

The group already has a respected backer in the form of institutional investor Fidelity, which has been involved in four rounds of funding, the latest for a $1.5 million convertible debenture.

MOBI724 announced plans to raise $5 million in July, around half of which has already been obtained. The money will be used to drive growth, as the research and development phase is over and the various technology solutions are fully functional.

Significantly, MOBI724 owns all the intellectual property supporting its platform and has a patent pending.

Vienneau reckons that at a market cap of approximately $5 million, or around twice projected 2016 revenue, the share price offers good value to new investors. “The challenge for us is to go out there and tell our story,” he said. “In time, this should lead to the market understanding our huge potential.”

This story was originally published at www.proactiveinvestors.com on Nov 24, 2016 and featured in The CSE Quarterly.

Learn more about Mobi724 Global Solutions Inc. at http://www.mobi724.com/ and on the CSE website at http://thecse.com/en/listings/technology/mobi724-global-solutions-inc.