Tag Archives: Peter Murray

Entheon Biomedical: Data and DMT among the keys to creating safe and effective treatments for patients battling addiction

Entheon Biomedical (CSE:ENBI) Chief Executive Officer Timothy Ko speaks passionately about his company and its objectives within the burgeoning psychedelics industry, not only because he heads one of the most dynamic teams in the space, but also because he credits psychedelics with saving his life.

Following a childhood of challenges that continued into his adult years, Ko ultimately found peace of mind after psychedelic intervention enabled him to look at life differently than he had been, repair important relationships and, as he puts it, “learn to love again.”

Ko’s experience defined what is now a life mission for him. This shined through in an eloquent and authoritative discussion with Canadian Securities Exchange Magazine in mid-September.

It would be difficult to come out of a conversation with Ko not believing that there is something to psychedelic treatments for those working to overcome mental illness. It’s no longer about masking or dulling symptoms, but rather probing the drivers of problematic behaviour and replacing closely held, harm-inducing beliefs with new, healthier ones.

The specifics are best conveyed in Ko’s own words.

Entheon is researching and developing products to help treat addiction. There are already products on the market that are used for this purpose. What are you trying to achieve with your treatments that existing alternatives do not?

I think before I answer that directly, we first have to look at the treatment landscape for addiction as it currently stands. When we assess treatment options available for various addictions – be it tobacco, alcohol, or things like opiates – we see a rather bleak landscape where many of the treatments, though widely available, are not particularly efficacious.

And looking at the population, it is estimated that, globally, over 2% of the population struggles with an alcohol or illicit drug addiction. In spite of the options currently available for addiction recovery we still see hundreds of thousands, if not millions, of people die every year as a result of tobacco, alcohol and opioid use disorder. The reality is that many people are rendered treatment-resistant over the course of multiple failed attempts to address their condition.

Entheon believes that we can provide better outcomes for people who have not been helped by previous types of treatment. In our estimation, the treatment-resistant form of addiction is more common than generally thought, and Entheon treatments are designed for people for whom other forms of treatment have failed.

Entheon focuses on a fast-acting hallucinogenic known widely as DMT. Does DMT have advantages over other psychedelics for addiction treatment?

It’s important to demystify what psychedelics do. A really important observation of ours with DMT is that there is a feature that is present in other psychedelic molecules called entropy. Psilocybin, LSD and DMT can induce a state of heightened entropy, or randomness.

That might sound like a bad thing, but when you look at people with pathological conditions, there is often a degree of tunnel vision. These pathologies make it such that a severely depressed person, or an addicted person, is unable to look outside their normal frame of reference. Their reactions to stimulus or experiences are pre-determined, so you have this immobile state where they cannot envision a life outside of the one they have already experienced.

What DMT and other psychedelics do is to promote a state of hyper-connectedness. They allow individuals undergoing psychedelic treatment to enter a highly neuroplastic state that enables them to have entirely new experiences. In combination with therapy, they are able to experience old traumas, belief systems and memories, and rather than go to their pre-defined pathological reaction set, they are able to have perceptions that reshape their experience in a more positive way.

Where DMT is different is that it is very well metabolized by the body, which means the experience is short. Psilocybin is a bit of an unwieldy type of molecule to work with, as it is very powerful and the length of engagement is six to eight hours or longer. That window of engagement is commercially difficult to manage. And because these are such powerful experiences and the individual is often dealing with inherently difficult subject matter, the risk of an overwhelming experience is amplified.

With DMT, we can still facilitate powerful transformational experiences, but you have the benefit of being able to limit them to 30, 60 or 90 minutes. If we need to, we can stop the experience altogether and that person can return to a functional baseline in 10 to 15 minutes. If a person is having a difficult time with psilocybin, however, they are on that rocket ship for as long as the rocket has fuel.

In a recent news release, you discussed treatment algorithms through the Entheon IQ program. What is a treatment algorithm exactly, and what work is required to make the technology widely available?

The way Entheon sees the industry evolving is that there is a broad array of psychiatric conditions, as well as a broad spectrum of individuals appropriate for psychedelic use.

Not everyone will respond the same to different drugs. Different phenotypes will respond differently to different therapies.

What we are doing with Entheon IQ is taking a data-focused approach to look at what individual factors make different drugs and different treatment types appropriate for different individuals. We have acquired a company that has a genetic test that looks at a variety of mental health risk factors based on genetics, as well as a function of metabolic factors that dictate whether a person is more or less likely to have a strong or weak response to drugs. We believe genetics is a very strong component of ensuring that appropriate treatments are prescribed to the right people.

We are also on the verge of launching a study with a partner in Texas looking at different biomarkers associated with the ketamine experience, and we’re also looking at biomarkers associated with DMT.

Without generalizing too much, Entheon IQ and Entheon DNA are working to create biomarkers to help predict and direct appropriate treatments for individuals across a broad spectrum of psychedelic molecules and psychiatric disorders.

Talk to us about your business model. At what point does monetization become a reality, and how do you scale the business?

I think that’s a question that the entirety of the psychedelic drug industry is looking at. The reality is that, as promising as the research is, in the interest of patient safety these development processes are bound to regulatory processes of governing bodies where we seek to commercialize.

We will need to make it through various stages of clinical validation, then have conversations with regulators and ensure our research is done in such a way that the data is irrefutable and highly understandable to the authorities that ensure these products are safe and effective.

The development timeline as it pertains to this approval process is five to 10 years, and we believe that we can have a timeline on the lower end of that range.

But in an earlier time frame, we think the development of tools to service the ketamine space should commercialize sooner.

You have a strong and growing advisory board of accomplished professionals in the addiction treatment space. Tell us how you choose new members for your team.

Our advisory board is among the best in the industry. It is populated by some of the most prominent and well-researched members in the psychedelic research space.

The psychedelic industry is under the general umbrella of science, yet it is highly specialized and the pioneers are limited to a very core group. When we started Entheon, we wanted to make sure we worked with minds that understood the unique properties of psychedelics better than other scientists.

Unlike other medicines that work in respect to brain chemistry, psychedelics take into account poorly understood features of the human psyche that are only now beginning to be characterized. We really wanted to select advisors with the most comprehensive understanding of the features of psychedelic medicine.

Let’s close with a look at the industry in general. Do you come across misconceptions in the broader audience that you feel need to be cleared up?

The stigma associated with psychedelics often unfairly highlights radicalism or esoteric belief systems. There was a comprehensive anti-drug policy in the 1960s and 1970s that sought to vilify psychedelic drugs as potentially catastrophic to society and having no therapeutic value.

Rather than us having to dispel these myths, I think the research is truly bearing out a rebuttal to the notion that there is no therapeutic value to psychedelics. With each passing month, we see more research that shows huge transformational capacity to help people with end-of-life anxiety, nicotine addiction, as well as major depressive disorders.

We exist within a very interesting moment where on a purely scientific basis, not only are these substances not addictive, harmful or detrimental, but they may actually be the molecules with the therapeutic potential to disrupt a system that has seen very little innovation in the past few decades.

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Entheon Biomedical at https://entheonbiomedical.com/

Ayr Wellness: Success is the outcome when everyone buys into a great strategy

Jonathan Sandelman, Chief Executive Officer of Ayr Wellness (CSE:AYR.A), takes interviews in a decidedly different direction than most CEOs. Rather than highlighting his company’s assets and achievements, Sandelman prefers to talk about the thing that, in his mind, most determines commercial success: corporate culture.

Ayr has big goals, and with nearly US$1.5 billion in assets on its balance sheet is well on its way to achieving them. The company expands organically thanks to exceptional product quality, and also through acquisitions, which can be tricky at the best of times.

But at the end of the day, if everyone at Ayr embraces Sandelman’s philosophy, and everyone pulls in the same direction, that’s the edge needed to come out on top. It’s an old saying in the investment industry, where Sandelman rose to become President of Bank of America Securities, that if you can’t tell someone what your edge is in just a few seconds, you don’t have one. Sandelman knew what Ayr’s edge was the day he established the company.

We connected with Sandelman in early July to discuss Ayr’s growth to date and the foundations of his confidence about its future.

Ayr has a very clear vision of where it is going and how it intends to get there. Talk to us about Ayr’s mission as a company and the corporate culture you need to make it a reality.

Our goal and mission statement at Ayr is to be the largest scale producer of high-quality flower in the United States. We don’t mean to insinuate that there aren’t smaller, boutique growers that grow really high-quality flower. But in the large MSO arena, we think one of the things that differentiates our company is our cultivation of high-quality flower at large scale.

Now, why is that important? First of all, in business you need to do something that differentiates your brand. In business school, we were taught about the unique selling proposition – what differentiates your brand from all other brands?

When we think about the industry and when we listen to our competitors, they talk a lot about branding, being a CPG (consumer packaged goods) company, and they are very focused on their box. “How does my box look?”

At Ayr, we tell our teammates, those in the marketplace, and our investors that it’s not about the box, but what’s inside the box. We believe that any time you underestimate the consumer, who has choice, who has multiple alternatives to consider – and for sure this industry is going to get more competitive – when you underestimate the consumer, I don’t care what business you’re in, you’re making a mistake. Because they know.

When I started my career as an investor, I typically bought into companies I thought had the best product in that category.

A lot of people in business want to be like Nike and Apple. I don’t buy Nike because it’s in an orange box. I buy it because I’ve been a marathoner and what’s inside the box is what motivates me to buy their product. When I think about Apple, while I think they have beautiful white boxes, I buy it because it’s the best laptop or phone. If it was simply an orange box or white box without being the best product, I wouldn’t buy it.

In Pennsylvania, we had our first harvest, our first flower for wholesale and our store shelves. The market tried our product and it sold out in a week. The consumer knows. We aimed to produce the highest quality flower in a market lacking high-quality product and it sold out in a week.

And then we recently introduced our Seven Hills flower brand. Again, consumers recognized the quality of our product and it sold out in a week. That’s why our focus is on growing the best quality flower.

Acquisitions are an important part of Ayr’s growth strategy. How do you assess potential acquisitions, and how do you successfully integrate acquired businesses?

We identify early on which states we want to build our businesses in. Then we have our M&A and strategy teams go into those markets and try to find the best assets. I’ve said from day one that the way I want to build this business is to cluster and penetrate. I like contiguous states so that when the consumer travels into a nearby market, they may not know the brands, but then they see the Ayr brand and they know what that stands for. They are going to buy Ayr even when they have other choices.

Equally important, that seller, who will remain with the company in most cases, must believe in our ethos. They must believe in honesty, integrity and transparency, and have values consistent with ours.

With talent, you win. For me, the companies that have the best culture, the best vision and the best talent pool win. The perfect transaction is one where we get a great asset as well as more team members.

Ayr was incorporated in July 2017, yet you have hundreds of millions in revenue and some US$1.5 billion in assets. How did the company grow so quickly?

I’ve been an investor and an operator for more than 30 years, with a deep understanding of the capital markets. I told my investors that Ayr would be EBITDA positive and cash flow positive from day one. That’s the disciplined way to act.

We would be disciplined because we understood that the public markets are cyclical. We thought we could be more aggressive when a correction happened and assets got cheaper because we were EBITDA and cash flow positive.

That’s exactly what you saw us do. We bought our initial companies, we paused for 13 months, the correction happened, and then we got aggressive about certain companies. It’s my belief that this once-in-a-lifetime opportunity to buy assets at bargain prices will eventually go away. There will be some form of federal legalization, and then what I call the “wall of money” will come in. It will flood the market and these multiples we are buying at today will trade even higher.

We are still aggressive about buying because I don’t think this will last even another year or two. That is the thought process behind what the future will bring for Ayr.

Given your background in finance and understanding of the cannabis industry, what is your outlook for the next five years and how does that shape Ayr’s business strategy?

I expect federal legalization of this industry because it is irrational that it’s not already legal. When almost every state in the US has some type of cannabis program, does it really make sense not to be federally legal?

For those who are uncertain about cannabis, I would vote for the SAFE Banking Act because it puts controls around the industry and creates insight and transparency that doesn’t really exist on the federal level. If you bank this industry, you know all the cash flows, from where the money is coming and where the money is going.

If you think about where alcohol is trading in terms of multiples, there is a lot of upside in our industry’s multiples and in individual stock multiples.

Ayr news often highlights acquisitions or new retail locations. Talk about the team and the dedication it takes to operate successfully at the pace you set.

I’m a believer in a culture of excellence. I’ve always had this philosophy that talent is free. That whatever I pay, or our shareholders pay, the rewards they are able to produce are just spectacular. Even when we were just a two-state operator, we had some of the best EBITDA and cash flow in the industry.

I think about the vision, what talents are required, what are the job functions, and then I think about who that type of individual would be.

It’s culture. You can’t just be the smartest person in your lane, you also have to be an extremely respectful person. When we’re in a meeting and I’m pushing you, you always understand that I am not pushing you to herd you, but to get you to think at a pace, at a level that you haven’t been able to in the past.

When I hire people, I always tell them my goal is for them to say to me a year from now that they’ve become the best version of themselves. There is something about this culture and this team that inspires them to do their best work and be the best person they have ever been in business.

I think our culture is the secret asset on our balance sheet. If the 1,500th person has the same vision as the people at the top, and we have 1,500 pairs of oars all rowing in the same direction, toward the same vision, then we win.

You are talking to me for this interview, but I am getting too much credit. I am the one talking, but it’s because we have a great team. We have built the best operating system and tech stack so we integrate these companies seamlessly. The people are so talented, and the systems and controls are so good, that we make it look easy. But it’s not.

Ayr is its people, and its dedication to its teammates, to its community, to its shareholders. That’s the ethos of this company.

This story was featured in the Canadian Securities Exchange magazine.

Learn more about Ayr Wellness at http://www.ayrwellness.com

Kuya Silver: Near-term production, exploration shape a game plan based on a proven path to the big leagues

When putting together the business plan for a new company, incorporating lessons from the leaders in your industry is always a good idea. David Stein worked as a mining analyst beginning in the early 2000s and was among the first to initiate coverage on marquee names such as First Majestic and Fortuna Silver. When he decided to establish an exploration company of his own, he understood the models that tended to position small companies to become billion-dollar players.

Focusing on high-grade silver projects with the potential for near-term production, Kuya Silver (CSE:KUYA), where Stein is Chief Executive Officer, is active in Peru and Canada, two of the world’s most prolific jurisdictions for precious metals production. With a healthy treasury, a balanced approach to its projects and a strong silver market, the company is ready to begin putting its plan into action. Stein shared his strategy of silver production and ongoing exploration with Public Entrepreneur in mid-February.

Kuya is obviously silver-focused. Before we get into your two projects and the outlook for each, tell us why you chose silver.

It really comes down to finding an exceptional project and it just happened to be a silver project. I found the Bethania Mine opportunity in 2017, and while my background is in all sorts of different minerals, precious metals are the main ones.

As I started looking more into the silver mining industry, I noticed there was a huge opportunity because many of the intermediate and large silver players from 10 or 15 years ago had diversified away from silver and more into gold. Now there is this sort of a void in the industry where if you want to invest in a primary silver mining company there are very few options. The opportunity to have this exceptional project and be able to get into production quickly made it all the more exciting. 

Your plans for Bethania call for putting a local mine back into production and at the same time doing exploration to help with mine planning and resource expansion. How did you come across Bethania, and can you talk about the thinking behind this two-part plan?

In terms of how I found it, I went out on my own after being in the industry on the investment side for 15 or 16 years and was looking for projects, mostly privately owned opportunities. During the bear market I had focused on private equity as a niche within the mining sector. Bethania was one of the projects that came up.

In terms of the business plan – restarting the mine, putting our own plant there and increasing production – that evolved over the course of negotiations with the former owners. Initially, they were really looking for someone to put a little money in for a minority interest and help them with some financial issues. It didn’t interest me as a minority investment, but if we could take control, there was a chance to do something special. I saw the potential to get enough silver production from this mine to make it into a meaningful public company one day.

I was a sell-side equities analyst in the early 2000s and one of the first analysts to cover some of the important silver companies. To me, this opportunity reminded me a lot of those: start with a high-grade silver mine with low capex that you could put into production quickly and easily. Then, by bringing better access to capital through the public markets, you could grow production, reduce costs, do more exploration – all those good things we plan to do.

If you look at the genesis of First Majestic or go back even further to the first projects that Pan American acquired in Peru, these very big and successful multi-billion-dollar companies all started with a single high-grade silver project. That was the beginning of the journey.

Peru has a long history of mining. What is the plan for community support and sharing the benefits with the people who live in the region where Bethania is located?

Peru is a very diverse country with different communities and types of environment. We are in the high Andes in central Peru, so we are in an area that is very accustomed to mining. As a recently producing mine, there is already acceptance of Bethania and a culture within the local community to support it. The community that has jurisdiction over the mining area is Poroche, and we are still in the process of working out what the people want to see over the longer term. The community has been very helpful, and I think they believe in the benefits of having more activity in the area and would prefer that the mine be operating.

One noteworthy aspect of our relationship is that we were able to receive our environmental impact assessment approval for the new plant and tailings storage. In order to do that you essentially have to get approval from your local community before you submit your paperwork to the government. There are site visits and other aspects of a legislated process. So, you work with the local community and essentially earn its support before permits can be granted. I think that demonstrates we are on a strong footing.

Your other project is located in northeastern Ontario. It has some very nice silver numbers and some cobalt in the mix as well. What is your plan there?

There are two parts to that deal. There is a part where we are buying a section outright, which is the Kerr Project. It represents about 10% of the First Cobalt land package and is the most advanced part. It is where most of the historical drilling is.  We have most of the data, and most of the high-grade silver hits are in that area. We see that as the part we can potentially get into production first. The other 90% goes into a joint venture.

This means there are two strategies. With the Kerr Project, we are looking to follow up on historical high-grade silver intersections and look for extensions of some of the known mines. There have been more than 70 million ounces produced in the area we are buying. We would like to find potentially some new veins and get them into production, at a similar scale to what we are doing in Peru.

And that is the link for us from Peru to Ontario, that the history of the Cobalt Camp is this super high-grade mineralization mined at a small tonnage. We want to produce a lot of silver but not necessarily go through a lot of rock. And we feel we can do that in the Kerr area.

With the joint venture, the opportunity is to find another collection of veins. If you look at the whole camp, the 400 million or 500 million ounces produced historically from this part of northeastern Ontario is in clusters of 50 million to 100 million-plus ounces of silver. With the joint venture we want to find a new cluster.

Do you have any closing thoughts, perhaps something we’ve missed or a statement that encapsulates how investors should think about Kuya Silver?

I would highlight that we are very focused on restarting production and becoming a profitable silver mining company in Peru. But we also feel that we have exceptional exploration potential with our property there. In 2021 and beyond you’ll essentially see us on two parallel tracks: one will be mine development and getting into production, and the other will be drilling and working to find the resource that underlies production for another decade or more. And we think we can do that in the next year or two.

This story was featured in the Public Entrepreneur magazine.

Learn more about Kuya Silver
at https://www.kuyasilver.com/

The Very Good Food Company: The name says it all for this group taking veggie-based meat alternatives to a delicious new level

Investors in The Very Good Food Company (CSE:VERY) know a great opportunity when they see one. The stock keeps climbing to new all-time highs, at time of writing sitting some 340% above its debut price in June of this year. The Very Good Food Company has come to market just as plant-based foods are a hot topic, but this is no trend-follower. This is a leader, which the company’s product line (and a taste of some of those products) makes abundantly clear.

Lifelong vegetarian Mitchell Scott co-founded The Very Good Food Company in 2016, his marketing skills perfectly complementing the culinary talent of fellow co-founder James Davison. The rest, as they say, is history.

Scott spoke to Public Entrepreneur from his office in Victoria about the secrets to The Very Good Food Company’s success.

There have been plant-based meats on the market for many years, but you seem to be stepping it up a notch, with different product formulations and looks, and a wide product range. Walk us through the genesis of the company and its culture.

We got started in the summer of 2016. My business partner, James, was a classically trained French chef from England. He moved to Vancouver and began working in a plant-based restaurant, and that’s when he got turned on to the plant-based movement. He ended up moving to Denman Island, also on the West Coast, and went vegan around the same time.

When he got to Denman he realized there were not really any restaurants, so there was nowhere for him to cook. He decided to get entrepreneurial and start making his own meat alternatives. A lot of the products on the market at the time were over-processed and full of fillers and other ingredients he wasn’t comfortable with. He wanted to make something with great ingredients – beans, vegetables, herbs and spices.

The first two products were veggie burgers and English breakfast sausages. He took them to the local farmers market and sold out in the first hour. That summer, he and his wife spent the week making the products in the kitchen and then going to the market and selling out.

That’s when I got to try the product, at a family barbecue, actually, as we are distantly related. I had grown up vegetarian and eaten a lot of not-so-great veggie burgers over the years, and I was just blown away by the quality. My background was in business development and marketing, and I was ready for something new, so we teamed up.

Talk about the consumer landscape for your products. Vegetarians are obvious customers, but are you also trying to bring in non-vegetarians?

Vegetarians and vegans are our core customers. There traditionally have not been a lot of good vegetarian options, so when people find something they like they stay with it and share it with their friends.

Since day one, we have wanted to appeal to a broader audience, and that was one reason for the butcher shop angle, where you would expect to see an assortment of meats. We want products to be approachable. Not some strange vegan product, but a burger, a sausage, some pepperoni. We try to make the products similar to meat products in look, taste, flavour and texture so they can appeal to a broad range of people.

What are your personal favorites in the product line? Where should someone start if they are new to your brand?

My personal favourite is adzuki bean pepperoni. Our taco stuffer is super popular – it is like a lightly spiced ground round. Those are my two favourites.

As for the broader product range, we have six or seven in grocery stores because we make them on a larger scale, and these are two types of burgers, two types of sausage, the taco stuffer, pepperoni, and we are just launching a hot dog.

In total, we have 15 or so, and the others are smaller runs and available at our shop or online. Those would be ones like steak, ribs and a holiday season item called Stuffed Beast. More labour is required for those, and we haven’t had a chance to scale up yet.

Tell us about your supply chain. How healthy and local are the ingredients that go into your products?

We try to source as locally as possible, so all of our produce is coming from farms on Vancouver Island and BC’s Fraser Valley. For beans, we are going to the Prairies, so about 95% of our inputs are Canadian.

In terms of what’s in the products, it is primarily beans, veggies, herbs and spices, with a bit of wheat flour to bind it all together. Of those veggies, we are looking at onions, beets, celery, mushrooms, leeks – nothing super exotic.

You had strong revenue growth in the most recent quarter and a solid gross margin. A lot of your overall expenses are operating costs rather than product costs. Talk to us about costs and margins going forward.

Operating costs are fairly high because our production process is still quite manual. We used to roll sausages and press burgers by hand, for example, but now we have machines to help with that. Once we move to full-scale production we’ll have a line that outputs 10 or 20 times what a manual line does now.

We are hoping to have larger-scale production up and running in early February. Until then, we’ve got our Victoria production facility, where we’ve upped production to 5,000 kilograms per week, from 2,000 in the summer. The next big production step will cost a few million to get up and running. The big cost is equipment, but we can get that financed and pay it off over a five-year term.

How about three to five years out? Where do you see The Very Good Food Company?

Our major focus in the next one to two years is the North American market. We want to continue rolling out e-commerce and wholesale grocery store supply. And our butcher shop and restaurant we see as a flagship store concept, so perhaps set them up in Montreal, Toronto, Los Angeles – we’ll hopefully make money from them, but they are more brand-based marketing tools.

After North America we want to be in Europe, with a similar concept of setting up a flagship store and then local e-commerce and wholesale. And it would be the Asia Pacific region after that, so Australia and Asia.

Those are some big goals. One senses from your answers that there is still plenty of room for this industry to grow.

This market is really just getting started. It is not just a trend. All of the producers in the industry are running full out. Companies that have been around for 15 or 20 years are still experiencing double-digit or triple-digit growth.

Beyond Meat was the first pure-play meat alternative company to IPO, and we were the second. I think you will see more public company opportunities. But the market is growing at such a rate that there is still tons of upside potential for everyone.

This story was featured in the Public Entrepreneur magazine.

Learn more about The Very Good Food Company
at https://www.verygoodbutchers.com/

Sixth Wave Innovations: After taming mining, explosives and cannabis challenges, this PhD-filled team puts COVID-19 on notice

Almost everywhere you go these days, you come into contact with multiple products and services without knowing they are there. Some make life easier or more convenient, while others go so far as to keep you alive, or at least out of harm’s way. We don’t see these products because a non-expert would not even conceive of such things. But thank goodness some experts do, as some of these technologies are fueling the promise of overcoming COVID-19 and pandemics of the future.

Sixth Wave Innovations (CSE:SIXW) is one such group, where a highly accomplished team that includes seven full-time PhDs is adapting proprietary molecular identification technology to tackle COVID-19.

Sixth Wave’s COVID-19 research builds on its recent successes in partnering with the United States Department of Defense on explosives detection, as well as on its gold refining and its extraction of CBD and THC from cannabis. Its technology has consistently provided solutions to highly complex scientific challenges. Now, Sixth Wave is committed to successfully adapting its proprietary rapid-detection technology to the COVID-19 puzzle in time to make a difference.

More on that shortly. But first, the basis of Sixth Wave’s business: molecularly imprinted polymers. Few people know what these are, as only a handful of companies in the world even work on furthering such technology. It truly is science at the cutting edge.

Most people think of plastic when they hear the word “polymers,” but these large molecules are far more ubiquitous. For example, wood is a polymer (a natural one), as is protein. To put it simply, a polymer is a material made of long repeating chains of molecules. Each has unique properties, dictated by the types of molecules in the chain and how they bond together. The basic molecules that serve as the links in a polymer chain are referred to as monomers, a defining feature being their capacity to form chemical bonds with other molecules.

At its most basic level, Sixth Wave’s technology identifies specific molecules by creating a polymer with qualities that first attract the molecule in question, then see if it fits. Imagine, for example, a complex magnetic puzzle missing a single piece. The magnetic field draws certain types of pieces with opposite magnetic charges toward the puzzle. When one fits, the puzzle signals to the user that it has found the missing piece.

When a Sixth Wave product identifies its target molecule, it triggers a specific chemical reaction embedded in the polymer by Sixth Wave scientists. In the COVID-19 example, it might cause a colour change to indicate that the person being tested carries COVID-19. The applications are endless.

“The doctors are telling us that water droplets are transmitting COVID-19 from our mouths,” says Dr. Jon Gluckman, Sixth Wave’s Chief Executive Officer. “Once developed, we think we can take the new polymer and embed it into a variety of testing devices, including in an N95 mask or a breathalyzer. You could arrive at an assisted living facility, for example, and be asked to put on a mask as you check in. If it changes colour after several breaths, they know you are carrying the virus. You could do the same thing at airports, train stations or ferry terminals. This would provide a way for everyone to be tested so that even if someone looks good and does not show symptoms, they don’t get beyond the point of inspection if they are carriers and risk infecting others.”

The key to the concept is the ease of testing. No machines or bloodied fingers. No swabs poking into your nasal cavity.

The idea is to embed the polymer in testing form factors that are inexpensive, easy to self-administer and allow for immediate results. “The earlier and more frequently you can test, the better,” says Gluckman. “We need something you can use every day, so you can show up for work, be tested, and if you don’t have it, you’re good to go, and everyone is safe and comfortable with their environment.”

As mentioned earlier, the Sixth Wave team – many of whom Gluckman has been working with for over 15 years – has a proven track record of commercializing molecularly imprinted polymers.

Explosives detection was the largest success, seeing Sixth Wave develop and sell wipes for military applications that could detect TNT, ammonium nitrate and other explosives at extremely low concentrations. “If you wiped a surface and there was a nanogram worth of explosives there, you would see the colour change,” explains Gluckman.

More recently, the team has developed products for the mining industry, conducting lab and field trials with some of the world’s top gold companies, the current focus being pilot plant testing with Kinross Gold Corporation.

“We moved into mining with a cheaper, more efficient and environmentally friendly way to conduct gold and silver extraction when companies use our polymer in place of activated carbon,” says Gluckman. One of the main advantages is that Sixth Wave’s IXOS product has been capturing more precious metals, and fewer of the unwanted minerals that come along with them, than when activated carbon is used.

Similar technology is used in another new Sixth Wave product called Affinity, which extracts CBD from hemp, or CBD and THC from cannabis. High efficiency and high purity are the selling points for Affinity, and Gluckman says the company is ready to start recognizing revenue in this segment during 2020.

“On the cannabis side, our development work is largely done, and we are finalizing supply agreements with our manufacturer. Affinity will also be manufactured at our facility in Lafayette, Louisiana,” Gluckman explains. Extensive test work was conducted with cannabis producers, and Sixth Wave is confident the demand is there.

“With mining as well, very little additional development is needed,” Gluckman continues. “We have already taken the production to commercial levels, and our focus now is getting the product to market. We see a lot more drive for innovation at gold mines, which leads us to have more customer opportunities.”

But it is a slow cycle. “A company might choose our technology but still be in the pre-feasibility stage,” Gluckman notes. It’s a market worth the wait, mind you, because a scenario assuming 10% adoption across global gold production suggests the potential for hundreds of millions of dollars in revenue to Sixth Wave annually, according to Gluckman.

With the scientists who develop the core polymers freed from having to do modifications and test work for the mining and cannabis markets, development resources are becoming more focused on COVID-19 detection. “The world has an immediate and dire need to manage COVID-19,” says Gluckman. “There will be more deaths and little economy left if we don’t figure this out as a society. We’re proud to do our part to help the world get healthy again.”

To that end, chemistry work on the COVID-19 product has begun. Importantly, Sixth Wave can use synthetic molecules for development so that it does not have to work with the live virus. This is another benefit of past product development – handling live explosives is equally undesirable when working on products that involve chemical reactions.

As for the timing of COVID-19-detection products, “I think we are about four or five months away from having particles that would have gone through some testing and internal verification,” says Gluckman. “We are putting together a team that will include external laboratories to provide testing with the live virus. We have several universities we are talking to, and they have access to what we would need to test with.”

Sixth Wave is also partnering with companies that could manufacture products featuring the polymers, including a producer of N95 masks. “I would think in a six-month time frame that we could have the first test units available for approval by the Canadian government, and we’d submit them for approval in the United States.”

At this point, it should be clear that Sixth Wave is not just some company jumping on the COVID bandwagon. It is using proven in-house technology to tackle the COVID-19 chemical structure in more or less the same way it has approached other complex scientific challenges that have continuously resulted in successful solutions.

“In the space of seven years, Sixth Wave has developed and sold millions of dollars of explosives detection products to the US military, and we have created markets for molecularly imprinted polymers in the mining and cannabis industries,” Gluckman concludes. “Our products all lead to lower costs, are easy to use and feature capabilities unavailable with any other technology. We are a young company, but we are solid. We are not in this for a quick buck. We want to make a positive difference in the world.”

This story was featured in the Public Entrepreneur magazine.

Learn more about Sixth Wave Innovations
at https://sixthwave.com/.

Blue Lagoon Resources: One of 2019’s hottest exploration stocks has quite the entrepreneur at its helm

What is the profile of a “typical CEO” in the mineral exploration industry?  There isn’t one really, though you often find a mix of geology and public markets experience that covers most of the bases.  Rana Vig, President and Chief Executive Officer of Blue Lagoon Resources (CSE:BLLG), is cut from a somewhat different cloth, though. He’s listed some of the biggest names in cannabis and runs a highly successful magazine, and that’s just scratching the surface of a very impressive entrepreneurial resumé.

Mining exploration is the outlier in Vig’s career. It’s the one and only sector where commitment and hard work has not resulted in major business success. He plans to do something about that with Blue Lagoon and is off to a good start, with shares in the company gaining 573 percent in 2019, following a July 4th trading debut. Public Entrepreneur shared lunch with Vig in Vancouver recently to learn about the company’s progress so far and what lies ahead.

Let’s begin with a little bit about your background. What brought you into the mining business? And what are some of the career experiences that led to the creation of Blue Lagoon?

Basically, I am an entrepreneur.  I have been in business for almost 35 years, and in those years I had five start-ups in different verticals – all private businesses and all family businesses. Around 2010, I connected with a very successful businessman who had made most of his money in mining. He recommended I try something different from the private business world and work with him in capital markets.

I was looking for a change. That 2008/2009 period had just happened when everything was collapsing. It was a dismal time in the business world. So, I got involved with him, invested well over $1 million, and in about six months, it was worth around $10,000, because the mining industry imploded.

Long story short, I don’t know all there is to know about mining, but my goal in every business I enter is to be the dumbest guy in the room, so to speak. I want to surround myself with very, very bright people.

I have a couple of strengths and one of them is executing plans.  When everything was collapsing in the public companies I’d become involved with, I took over as CEO and spent several years rebuilding them. Business doesn’t change. Business is business, whether you’re running a restaurant or a magazine, or whatever you are running. The fundamentals are the same. It’s a matter of assembling very smart people who are good at what they do.

I’ve been a CEO, a chairman; I’ve been on boards. To be honest, I’ve met some not so great people in the public company realm, which is something I wasn’t used to in my private business life, but I’ve also met some very good people and developed some meaningful relationships, and they are who I work with.

We will get into your projects in a moment, but first, take us through the concept behind Blue Lagoon. What is the strategy for building the company and creating value for shareholders? What makes Blue Lagoon different?

A couple of years ago, once I’d cleaned up the companies I was involved with, I decided to start fresh. I was very fortunate the last couple of years and brought two of the largest cannabis deals to market. I did a company called Curaleaf, taking them public, and it was the largest cannabis raise in history, at $520 million. I also did Harvest Health & Recreation, which at $300 million was the third largest.

I then had to consider what to do next, and cannabis was retracting.  I’ve had nothing but bad experiences in mining since I started in this business. But it has to come back at some point. I concluded that gold has to be the one, the safest place to start. And I launched an exploration company, and that’s Blue Lagoon.

I’m not a geologist or a mining engineer. First and foremost, always bring together real experts in their fields. Then, go out and find undervalued assets, something where I have the opportunity to add value, because that’s how you build value for your shareholders.

We listed Blue Lagoon on July 4th of 2019 at a little over $1 million in market cap, and here we are, seven months later, trading at over $50 million in market cap.

You have a deal with Mag One Products, whereby Blue Lagoon can earn as much as 70 percent in a joint venture by investing $5.25 million in stages. It is an interesting business and an interesting deal structure. Tell us more about how it benefits Blue Lagoon’s value creation effort.

Mag One has great technology that they can rapidly advance. All they need is the money. It is an attractive value proposition for me and my shareholders.

Why magnesium? People have pointed out that we are a gold company, so what are we doing in magnesium?  Well, that is the entrepreneur in me. I’m not necessarily trying to build a gold company. I am trying to build a mining exploration company and advance shareholder value. My first and foremost job as a CEO is to create value and make my shareholders happy, because they are coming along for the ride with me.

Magnesium is a great metal. It’s 35 percent lighter than aluminum and over 70 percent lighter than steel. With Tesla and all these electric cars, they want to get lighter. Same thing with planes.

The issue is that magnesium can’t compete with aluminum on price.  Enter Mag One. Their technology will compete with aluminum, and even more important is the environmental side. Right now, over 90 percent of the magnesium in the world is produced in China from something called the “Pidgeon process,” which is highly pollutive.  But Mag One is zero-emission. All that’s missing is the capital, and $5 million is not a lot of money. If we can supply them with that, it will advance the project.

I believe gold is going to do really well this year, but if it isn’t quite ready to break out yet, then I have this incredible technology that we can help advance. This company has access to 110 million tons of tailings with 23 percent magnesium, so there is no drilling involved. All we need to do is help them advance the science, and we could potentially change the world.

Gordon Lake is a property you optioned in the Northwest Territories. High-grade gold was found over significant widths by previous owners, and you recently announced steps toward conducting your own drilling. Tell us more about the plans and the timeline.

The reason we like the Gordon Lake property so much is that it is in an area known for gold production. The Discovery Mine did over 1 million ounces, the Con Mine did about 5 million ounces, and the Giant Mine did about 7 million ounces.

Being an entrepreneur, the deal is great. It made sense to acquire that to balance our portfolio for summer as well as winter. As for when we are going to start, we have already engaged local experts in the area, Aurora Geosciences. When it freezes, it gives you access to ice roads, which makes it very economical, as you don’t need helicopters. We hope to get started there later in February or early March.

A 43-101 report was released on your Pellaire project in December. There is no resource yet, but there was historical production in the area. Why do you like this one so much and what is the game plan?

Pellaire is a beautiful property a couple of hours southwest of Williams Lake, also in an area known for gold. It has 10 high-grade veins identified. The owners have been at it for years and circumstances brought it available for sale.

We took JDS Engineering, one of the best in what they do, and had them fly up with us and do some analysis.

One of the things that really attracted me to Pellaire is that there is 25,000 tons of crushed rock sitting right by the Number 3 vein. I had JDS help me with a back-of-the-envelope estimation and we believe there is significant value to be had from that, just by trucking it out. That, along with drilling, presents a great upside opportunity.

The precious metals sector has made a measured but undeniable comeback in the last few quarters. What is your outlook for the metals, and what are you hearing that those outside the business don’t know?

I don’t know if there is anything I hear other than what everyone is talking about. Many of these countries are in trouble and there’s currency problems. We know that, at some stage, gold is always the safe haven that people turn to.

If you look at the Indian community, it is a big consumer of gold.  I am Indian, and I can tell you that in India, a village will pool its money to buy a gram of gold – not an ounce but a gram. My point is that even the poorest of the poor must somehow acquire gold. That tells me something. It gives me insight about a very large country and its desire to own the metal. That has to come into play at some point, as these deposits are becoming harder and harder to find.

Blue Lagoon closed a financing last year at $1.00, and you just completed another at $1.50 in January.  A lot of CEOs would like to be in your shoes. What is the financing environment like for exploration companies? And have you had any feedback from existing or new shareholders that stands out in your mind?

The financing environment is still very tough. I was fortunate to be coming off of two big deals with a solid following of people who believe in me. People believe I have the ability to find the right projects and the right professionals to advance those projects.

We announced $1 million at $1.00 per share and closed $1.1 million – $300,000 of it from me, to show that I am right alongside everyone. The January financing was for $1 million as well, at $1.50.

I never want to be in a position where I am waiting to look for money. I wanted to make sure we had the money secured to advance our projects. We are sitting around $1.5 million in cash.

I also never want to be in a position where my geologist is looking at me and asking if I am going to advance the money to the drillers or not. Being an entrepreneur, one of my principles is that you must always pay your bills. My word is my bond. You can take it to the bank. If I don’t have the money in the bank, I am not going to contract you. I think that is one reason, actually, that I have a good following. Even if things are bad, it is not going to get better if I lie to you.

Let’s close with one of the indispensable lessons you’ve learned in your business career.

It is extremely important to look at who you are investing with.  You must believe that person has the ability to take your hard-earned money and grow it. I think you significantly reduce your risk if you sit with the person you are banking on. There are lots of people around the world with great ideas, but we never hear about them because they don’t have the ability to execute. I have the ability to listen, understand, and use my business skills to advance any project. If you are looking at a company to invest in, Blue Lagoon was one of the best performing companies in 2019 and we should at least be on your radar. I believe we have a lot of runway to execute what we are working on now, and what we may acquire in the future.

This story was featured in the Public Entrepreneur magazine.

Learn more about Blue Lagoon Resources at https://www.bluelagoonresources.com/.

XPhyto Therapeutics: Unique assets and a focus on Germany’s medical cannabis market set this opportunity apart

The art of successful investing is not about what is happening now, but rather figuring out what is on the horizon and set to emerge as the next big thing. Positioning oneself to make the most of that development is what gives competitors in any aspect of the business world an edge – the famed early-mover advantage.

Hugh Rogers and his team embraced this concept wholeheartedly when putting together XPhyto Therapeutics (CSE:XPHY), the company Rogers now leads as Chief Executive Officer, two years ago.

Armed with a legal background focused on corporate restructurings, plus experience in molecular biology from research work at the University of Toronto, Rogers agreed with his business partners that they wanted to participate in the burgeoning cannabis industry, yet not in the way everyone else seemed to be doing it.

Large-scale growing operations in the US and Canada did not interest the group. So, what was it that others were overlooking, something with greater potential than was to be found in the increasingly crowded North American arena?

“The vision for XPhyto was to foresee where the industry would be in two, four, and six years, and then position the company accordingly,” explains Rogers. “In the end, we decided that medical formulations and clinical validation in emerging European cannabis markets was the best place for us to be.”

That best place, to be precise, is Germany, where cannabis is legal for medical use and, according to XPhyto, not subject to the same stigma the drug suffers in North America and many other parts of the world.

“It’s a very open market in the sense that, in our experience, regulators at every level of government, and I would also say the medical community – physicians and pharmacists – are open to cannabis products,” says Rogers. “There is a history of botanical medicine in Germany where they are eager to learn but at the same time are looking for clinical validation.”

And no other entity, quite literally, is positioned in the German market the way XPhyto is to help cannabis achieve the level of formal validation that consumers expect of widely used pharmaceutical products. The company’s 100% owned German subsidiary, Bunker Pflanzenextrakte GmbH, possesses a German cannabis cultivation and extraction licence for scientific purposes issued by the German Federal Institute for Drugs and Medical Devices. To XPhyto’s knowledge, it is the only one in existence.

“We’re setting ourselves up to work with the government on the scientific side,” explains Rogers. “That means cultivation, extraction, remediation of oils, seed banks, tissue banks, clinical trials – all of the scientific knowledge.”

The XPhyto team has done an admirable job of building a company with top clinical talent both at the German operations and in Canada, including its recently announced cannabis research and development agreement with the Department of Biochemistry at the Technical University of Munich.

Soon to follow in Germany is a 10,000 square foot facility, half of which will house small-scale cultivation rooms, with the other half being for storage, manufacturing, and distribution. The company estimates it will be up and running with plants under cultivation in the first quarter of 2020.

Expect security levels to be high, given the structure that aptly named Bunker is renovating was once a military command centre. Bunker founder, and now XPhyto Vice President of European Corporate Development, Robert Barth will oversee the renovations. It was also Barth who brought the Technical University of Munich into the fold.

The German research bandwidth is augmented by two exclusive five-year engagements XPhyto has with the Faculty of Pharmacy at the University of Alberta. “Our primary goal in Canada is to focus on clinical validation,” says Rogers. “We have an ISO-certified clean room for our new extraction equipment for production of cannabinoid extracts and isolates. I think the first formula we’ll clinically study will be for topical dermatology followed by oncology pain management. Our expertise at the university is drug delivery and we have some unique applications for cannabis products.”

Clearly, the company’s main objective is clinical testing, and ultimately clinical trials, designed to provide the medical community with the same standard of product understanding and trust that many other prescribed treatments currently enjoy. In this way, doctors will know exactly what type of cannabis, or cannabis-derived product, to prescribe for a given condition, in what dose and for how long.

But investors and others new to the company shouldn’t conclude that the validation theme at the core of XPhyto’s model means that cash flow is something far off in the future. The supply/demand balance in Germany’s medical cannabis market features more of the latter than the former, and XPhyto is positioned to help.

“The German market is large and domestic production expected to come online in 2020 will meet only a small fraction of total demand. There is a deficit that will be made up through imports and that is an opportunity we are rapidly pursuing,” remarks Rogers.

“We are working to secure supply of ultra-premium flower in Canada,” he says in beginning to explain the import strategy. “The best premium growers are in Canada and the US. We are focused on Canada and are working with a number of great growers to source product.”

The XPhyto team believes that providing the best experience for patients must embrace testing for pesticides, heavy metals, and offering products in optimal packaging. If everything goes according to plan, product will be ready for shipping by Q1 2020.

Advancing this strategy on multiple fronts is the acquisition, announced in late August, of Vektor Pharma TF GmbH, which holds permits for cannabis importation and narcotics product manufacturing, among others. And in a possible sign of things to come, Vektor also has established itself in the research and manufacturing of thin-film strips for drug delivery, including transdermal patches and oral strips.

Said Rogers at the time of the acquisition’s announcement, “We believe that Vektor will add significant long-term value at every level of our business, from clinical trial expertise and drug manufacturing capability to their German cannabis and narcotics import licences and strong relationships with the German health authority.”

XPhyto’s strengthening German presence will be a source of many things, boots-on-the-ground intelligence being one that should enable the company to smoothly blend into the German supply scene with the long term in mind.

As an example, Rogers explains that if XPhyto has a certain volume of cannabis ready to sell it won’t necessarily put it all on the market as fast as possible. “What we want to do is build our distribution and demand through consistent supply so the physician knows when they prescribe our product that there is availability for three to six months. We would rather build our patient base slowly and steadily than flood the market – here is a whole bunch of supply and then, oops, it is not available next month. The end result when you take that approach is that physicians are less likely to prescribe your product.”

Having only made its trading debut on the Canadian Securities Exchange in August, XPhyto is a newcomer to the public markets. But asked why investors should be interested, Rogers is clear as to what sets the XPhyto opportunity apart. “It is important to understand that the cannabis industry is here to stay,” he concludes. “But at the same time, you must carefully consider where to allocate your investments. We have gone 100% into opportunities that were on the sidelines for a long time, and I think you are going to see medical applications, clinical validation, and European opportunities come to the forefront over the next two years. And that is exactly where XPhyto is positioned.”

This story was featured in the Public Entrepreneur magazine.

Learn more about Xphyto Therapeutics at https://www.xphyto.com/.

Irving Resources: Steady progress on gold projects in Japan serving investors in this explorer well

When the Canadian Securities Exchange featured Irving Resources (CSE:IRV) in its quarterly magazine two years ago, the company had assembled a portfolio of attractive projects in Japan and done some early groundwork.

At the time, President and Chief Executive Officer Akiko Levinson and director (and chief geologist on Irving’s projects) Quinton Hennigh spoke of a commitment to exploring methodically and at a measured pace. It was as if they knew they had something special. No need to rush.

Fast-forward to the first quarter of 2019 and their thesis is proving right. With samples up to 480 grams per ton gold and 9,660 grams per ton silver, permits in hand and targets ready for drill-testing, progress to date shows that not only are there excellent projects in Japan, but that exploration can indeed be conducted in an efficient manner.

The market clearly agrees, having boosted Irving’s share price in the past two years by over 100%. This increase in valuation is even more impressive given that many precious metals exploration companies have seen their share prices implode during that period.

Public Entrepreneur spoke with Levinson and Hennigh in February 2019 to get the latest on achievements to date and what investors can look forward to over the balance of the year.

Why did you choose Japan as the focus for Irving’s exploration work? What initially attracted you and why is Japan a good place to explore?

AL: The idea of exploring in Japan began making sense when Quinton and I went there in 2012 and visited the Hishikari mine, which is one of the richest gold mines in the world.  Quinton said, “Look, there can’t be just one of these.” So, we started looking for a way of exploring in the country ourselves. That opportunity came in 2015.

QH: Japan has not had any exploration conducted for perhaps 30 years.  The last major discovery was the Hishikari mine Akiko just mentioned.

Japan has been perceived as a country that is difficult to explore in, but when we looked into it we found the situation to be the opposite.  Japan is actually quite straightforward to explore in, and now here we are, looking for the country’s next high-grade gold deposit.

Talk to us about the regulatory environment. What is the permitting process like? How does it differ from that in countries such as Canada or the US?

QH: I would say that the regulatory framework is actually not all that different from in Canada, the US or Australia.  It is fairly predictable in terms of the expectations placed on companies. It is straightforward to get permits and so forth.

I think the biggest challenge was that some of the people overseeing the permitting process had not really encountered much in the way of mineral exploration for many years, so there was somewhat of a learning curve as they worked on our permits because they simply were not familiar with some of the processes involved. But I think we are past that now and the whole structure is working quite well.

AL: When we started this three years ago, this was new to everybody – to METI (Ministry of Economy, Trade and Industry), to Irving, and to the people who help move us through the permitting process.

But Quinton says all the time that there really are no surprises.  It is very predictable if you go through the process and if you do it diligently.  I think that because of Irving and others who are trying to do similar work in Japan, the regulatory system has a better understanding of this process. It is becoming faster.

Japan is a highly seismic area – explain how this influences the types of deposits found in the country and how it influences your exploration strategy.

QH: The seismic activity is related to the fact that Japan sits on the Ring of Fire. It is part of the Circum-Pacific Belt associated with volcanism and earthquakes as the plates collide.  You have the Oceanic Plate under the Pacific Ocean, and the Continental Plates. In this case you have the Eurasian Plate. As those two converge, you generate quite a bit of magma down deep that then rises to the surface and can produce volcanoes – there are numerous volcanoes up and down the Japanese archipelago. That volcanism is actually what leads to the formation of a lot of these gold deposits. The heat associated with the process is very near surface and heats the groundwaters. Those waters carry minerals, including gold, and redeposit them as they come to surface and emerge as hot springs.

Japan is well endowed with this environment – there are hot springs from one end to the other. This has been the case for many millions of years. So, Japan has seen a long history of hot spring formation, and we are looking for paleo hot springs – basically old hot springs that would have carried gold up to surface.

As a result, deposits in Japan are relatively shallow. Usually when you find an old hot spring, at surface what you see is a terrace of silica, a silica sinter. It is kind of a flat body of silica deposited by the hot springs. From the feeder below, cracks in the ground fed the hot spring water through, and that’s where the gold forms. These deposits are present within a couple of hundred meters of the surface.

We’re interested to know about your top projects and why you chose them as the focus of your exploration.

QH: The Omu Project is in northern Hokkaido.  Omu is centered on a volcanic system that was active about 12 million years ago.  We have a history on the property of not only volcanism but extensive hot springs.  There are at least three major centers where hot spring waters have surfaced. One of them is at the Omui mine, which is an historic mine that produced maybe a ton of gold in the 1920s.  It was very high grade and has seen little, if any, exploration since.

The second area we are focused on is the Omu sinter.  This is a new discovery that we made a few kilometers due north of the Omui mine. The system is intact, basically preserved in its entirety. The silica sinter is on top and we believe there is potential to find high-grade veins underneath like we see at the Omui mine. It has never been drilled or tested and is thus a brand new exploration target.

The third area is in the western part of the Omu property.  It is called Hokuryu. Like Omui, it is an historic mine and produced a few tons of gold. It was shut down during the Second World War, well before its resources were mined out. We are a little deeper into the system, as the sinter has weathered away – we are down into the vein system beneath it. There are pieces of vein at surface with an average grade of 50 grams per ton gold and 500 grams per ton silver. It is a very rich and promising new target.

I love the story you told once about finding a project after noticing interesting rocks in a local garden. Can you each share with us a favorite story about your exploration work in Japan?

AL: Those rocks were actually being used at a kindergarten in an ornamental fence.  Our team went to the school and asked where they’d found them. They guided us to the location and that is how we located the sinter.  The town wanted to get rid of the rocks because they planned to build something else. They put up a poster saying, “Anyone who wants these, please take them.”  We said, ”Yes, we’ll take them!” And now some of them are in our office. They were just going to throw them away.

QH: I usually judge geologists by comparing what they talk about to what you see in the field.  In other words, if they say, “This is the biggest thing since Ben Hur,” and then you get into the field and it’s disappointing, you know they embellish.  Then there are geologists who are low key. They’ll say, “Oh, there is something kind of interesting,” but then you get out in the field and it’s the biggest thing ever.

One of our advisors is a gentleman by the name of Hidetoshi Takaoka.  Two years ago, we went to Sado Island to visit a historic mine. The mine has a tourist shop in front with a box of rocks you can buy as souvenirs.  I picked one up and Mr. Takaoka said, “We can find one better than that. There is a creek near the mine and pieces of ore have washed down the hill over the years.”  We crawled down this steep valley just in front of the mine, and after about five minutes at the creek, Mr. Takaoka reaches down and picks a rock out. We crack it open and it is literally full of gold.  I knew then that he tends to understate things. It is one of the nicest specimens of epithermal vein I have ever seen.

You have tremendous partners in Japan. Tell us about them and how they have contributed to your success.

AL: How Irving started was that Quinton and I worked for a company called Gold Canyon and that merged with another company. What was left in Gold Canyon was a joint venture in Africa with the Japanese government mineral agency called JOGMEC. We worked in Africa with Mitsui Mineral Development Engineering Co. (MINDECO). They are probably the top engineers in Japan for mining and exploration. We had already worked together for about 10 years, and when Quinton and I asked MINDECO engineers if they could help us if we did work in Japan, they said they’d assist in any way they could. It has been amazing to have a built-in team from the beginning that is likely the best in Japan.

And previously Quinton mentioned Hidetoshi Takaoka. He is the one who recommended we look into the Omu project. He was chief geologist for Sumitomo Metal Mining and found the Pogo mine in Alaska for Sumitomo.

If Irving puts projects into production, your plan is not to build a mill or facility onsite yourself, but rather to supply smelters, is that correct?

QH: The rock is rich in silica, and silica is needed by smelters as an agent called flux.  Flux is added to copper, zinc or other concentrates and it helps retain heat in the furnace – it acts as an insulator to keep heat in the molten material.  It also extracts some of the nastier elements – it takes out iron and other things. So, silica is very important to the smelting process.

In Japan, they use perhaps a couple of million tons per year. Traditionally, Japanese gold mines have supplied the sinter for smelters, but as gold mines have diminished in Japan, this has become less and less so.

When the ore is added to the furnace as flux, gold and silver come straight out into the copper matte, and they recover them through further refining in the smelter – they are a byproduct of the smelting process.

We thus saw a huge opportunity.  If we find a high-grade deposit we feel it is easy for us to integrate into the smelter flux market in Japan. It saves us from building a mill, which is capital intensive and requires more permitting.

AL: When Omui was in production they shipped ore to the Kosaka smelter back in the 1920s.  Kosaka remains a large smelter today in full operation. When we spoke to them two years ago, they said that if we were to make a discovery they would welcome our supply.

You have a busy 2019 planned – tell us about the first half of the year and how it sets up the activity in the second half.

QH: For this year, we are working on getting our drill program lined up in Omu. We brought a drill rig from Canada and a drilling company we worked with in the past is seeking visas for some of its drillers.  Once we get those, we can start drilling, I suspect some time in March. The drill program should last most of the year, say from March to October. We will probably test the Omu sinter first and the Omui mine second.

We are also going to conduct trenching and bulk sampling at the Omui mine site. We plan to open up some of the veins with excavators and not only study the geology but extract a bulk sample, say up to 1,500 tons.  The plan is to ship the material to the Kushikino mine and smelting complex in Kyushu. They are prepared to handle our material and we are planning on selling it to them directly.

Other than that, our focus will be earlier-stage exploration on Hokuryu, which is on the Omu property, and we are also going to undertake greenfield prospecting and mapping on our other projects in Hokkaido.

Is there anything we have missed?

QH: We are one of a handful of exploration companies that have waded into Japan recently, but I would put us at the head of the pack because we have very good relations with the entire Japanese mining community – government, the mining companies, regulators, the towns.  We built this company purely to operate in Japan. We have a good Japanese team. I think we are in the best position to make a discovery in Japan.

This story was originally published at www.proactiveinvestors.com on March 3, 2019 and featured in the Public Entrepreneur magazine.

Learn more about Irving Resources at https://www.irvresources.com/.

Nerds On Site: Clever solution for small business computing needs drives fast growth in highly fractured market

In today’s global connected environment, with laptops, servers, mobile devices, and other digital equipment collectively running millions of different software applications, in-house IT and network security work is no joke. A single IT professional cannot cover all aspects of this vast technological universe and be up to date on every topic, as things change every day.

In recent years, network intrusion, ransomware attacks and other black-hat activity has reached such proportions that it’s no longer random bad luck when it hits someone. Internet vulnerability is day-to-day reality for companies of all sizes.

If you work at a large company, you’re in luck relatively speaking, as there is likely in-house help to lean on if you have an issue.

For small companies, however, external support is often the only place to turn. There goes the rest of the day, for starters.

Nerds On Site (CSE:NERD) is a practical solution for small and medium-sized enterprises to consider. The company has a large team of carefully chosen technology specialists ready to visit your home or place of work to diagnose problems on the spot and offer ongoing managed solutions to prevent problems occurring in the first place.

Oftentimes, a fix will be at hand and the team member will be able to find and implement solutions before leaving. If software, parts, or a security installation is required, Nerds On Site works closely with suppliers to get things fast and at fair prices.

When it comes to software, Nerds On Site also has the ability to develop unique, state-of-the-art solutions through third-party developers. Examples include electronic records processing and security applications. It’s kind of like having your own IT department without needing to be a large company.

Eugene Konaryev is a director at Nerds On Site and did much of the necessary financial work leading up to the listing of the company on the Canadian Securities Exchange in late November. Sporting a computer science degree from the University of Toronto, he immediately understood Nerds On Site’s capabilities and the concept of addressing its large market when he first met CEO (Capability Expansion Orchestrator) Charlie Regan in 2014.

“What the company does is mobile IT services to small and medium-sized business,” says Konaryev. “We still have a small portion of residential customers, but what we really do is enable SMEs to enjoy high-quality IT service and support without the need for high-priced contracts.”

It is not just hardware and software the company helps with, mind you. Once hired, Nerds On Site provides round the clock network and device monitoring options, on-site and remote support, IT asset management and much more. “We take care of pretty much everything there is in SME IT,” says Konaryev.

Nerds On Site was founded in 1996 and has established a solid presence in 10 major cities across Canada. One way to explain its scale is to refer to the number of Nerds in the network. At present, there are 125, the largest concentration being in Ontario, and specifically Toronto.

Clients include a large number of Canadian Tire locations, with a broader corporate relationship in the works.  Importantly, Nerds on Site has also been named an Apple mobility partner.

When entering a new city, the game plan is to have at least five Nerds, and preferably 10. For example, the planned expansion into 10 US cities entails 100 Nerds – 10 in each city. The company uses a subcontractor model and is starting to use franchising as well in the United States.

“When you enter a new urban market, a sophisticated Nerd force makes a difference,” says Konaryev. “Talent is very important. They call one another ‘enterprise nerds’ in a positive way.” He explains that set-up expenses for the company when it enters a new urban market are around $250,000 for a 10-person team, a pittance compared to almost any other type of business with 10 highly motivated employees serving an entire city.

Underlying the growth opportunity for Nerds On Site is that it operates in a highly fragmented market with the majority of companies in the space being small and short-lived, according to Konaryev. The big IT service companies focus on large enterprises and charge such high fees to their well-heeled corporate clients that catering to the SME market does not make sense for them.

Even though the SME market is largely there for the taking, no company has established itself as the segment leader on a national scale, although there are good local and regional players both in the US and Canada. Nerds On Site sees them as potential M&A opportunities.

“When someone asks who our biggest competitor is, I can’t even give them a name,” says Konaryev. “There are small IT shops in cities and often when you need help, there is nobody available to answer the phone, or you call and they have gone out of business.  That’s why this is such a great opportunity.”

The strategy for the coming year involves an aggressive rollout into the 10 fastest-growing cities in the US, most of them in Arizona and Florida. The plan is to launch in the first 10 US cities in 12-16 months.

“We have the capital to launch Nerdmobiles in these cities thanks to the funds raised during the IPO,” says Konaryev. “And then it’s all about finding talent, and fortunately, talent is in abundance if you know where to look. For example, we did a small campaign about six weeks ago to attract prospective Nerds in Florida and in one week we received over 400 applications.”

The follow-on expansion phase is slated at 50 cities, after which would come a 100-city expansion, the ultimate goal being to offer national coverage in the US. Continued expansion in Canada is also part of the plan.

When it comes to choosing Nerds, applicants need not only IT education and appropriate practical experience, but also the self-starter attitude that all successful entrepreneurs possess. The initial telephone interview has a pass rate of only about 50%, with those making the first cut moving on to a video interview, and then an interview in person with a local team leader.

Qualified applicants get about a month of training at Nerds on Site headquarters in London, Ontario. For US Nerds, training would take place on site in Florida.

Typically, for every 10 applicants, only one or two make it through the process. Once qualified, Nerds get access to competitively priced lease or buy options for a Nerdmobile, a network of other Nerds that is always there to help, a local customer database, low-cost inventory, and any other support they might need from the broader Nerds on Site team.

“We promote a collegial network where knowledge is shared and if someone does not know something, they can reach out to a colleague through IAAN (the company’s ‘I am A Nerd’ tablet-based control system), and the helper can share in the revenue because of their contribution,” Konaryev says.

Nerds On Site raised $4.7 million through its IPO.  Revenue in fiscal 2017 was around $8.3 million. Fees related to the listing are weighing on earnings, but the company would have been profitable had those one-time fees not been incurred, says Konaryev. The 10-city US rollout will use a significant portion of the capital but once that is complete Konaryev says the company anticipates being in the black.

Konaryev recalls that when Charlie Regan joined the company and the team considered how best to scale, they called as many IT specialists as they could identify and found that 80% did not answer. “From our experience, about 95% of SMEs are massively underserviced,” says Konaryev. Slowly but surely, Nerds On Site seeks to make this a problem of the past.

This story was originally published at www.proactiveinvestors.com on January 30, 2019 and featured in the Public Entrepreneur magazine.

Learn more about Nerds On Site at https://www.nerdsonsite.com/.

VirtualArmour International: Keeping the bad guys at bay with customized network security solutions

Every week, it seems, brings another concerning story about hackers infiltrating a commercial or government network and making off with highly sensitive information.  One would think that with the threat having been clear for so long, entities with significant exposure would have devoted appropriate resources to figuring out how to protect themselves properly. Alas, all too often this seems not to be the case.

VirtualArmour International (CSE:VAI) has a solution to this problem, or to put it more accurately, a tailored solution that precisely fits each customer’s risk profile and particular set of network vulnerabilities. Boasting a 100% retention rate across a very broad customer base, the company is obviously doing something right.

Public Entrepreneur spoke recently with VirtualArmour chief executive officer Russ Armbrust about the state of cybersecurity and what his company does to help organizations stay ahead of the curve.

Cyberattacks make the news regularly and the loss of confidence a compromised company suffers can be quite serious. Can you give us your view on the state both of attempts to infiltrate corporate and other networks, and the quality and consistency of efforts being made to counter them?

There are constantly new tactics and techniques being developed to compromise IT assets for valuable information. Considering these tactics are continuously evolving, we make it a point to partner with what we consider the best-in-class technology providers who have proven track records of constantly improving their solutions to stay ahead of this evolution.

The response landscape of cyberattacks has shifted to a proactive approach, looking for behaviour-based activity as opposed to the signature-based approach. Utilizing emerging technologies like artificial intelligence to maintain a proactive stance against hackers will continue to improve and aid in keeping pace with the way we respond to these threats.

As far as the quality and consistency of counterefforts, I would say that 90% of companies are very immature at this right now. That is the reason for the growth of our company. Most of the companies we talk to don’t know what they don’t know. It is a comprehensive process with each of the companies to get them up to the cyber posture they need.

Let’s look several years down the road – what do you project as far as the evolution of network security is concerned?

The traditional model of network security is being challenged and new technologies are becoming commonplace. Everything soon will be connected to the Internet in some way or another, be it wireless, cellular, Bluetooth or something new. We see that each and every day in commercial advertisements. Now your refrigerator is connected, your oven is connected. With nearly everything expected to be connected, this will produce new attack vectors and require constant development of defense mechanisms and techniques, both proactive and reactive.

Walk us through VirtualArmour’s approach to the problem.  What are your competitive advantages – what makes you better? And how does the company keep pace with the constantly changing cybersecurity landscape?

We focus on customer experience. Everyone’s cyber posture is unique, so our goal is to understand the potential cyber gaps of each customer.  We focus on becoming a true partnership and acting as an extension of their team. In today’s world, the new modern MSSP (Managed Security Service Provider) should help a customer solve problems, not just send alerts. And that is our true differentiator.

As to how we keep pace, we believe that we have hired some of the best engineers in the business. With such a broad range of customers in so many industries, as well as interacting with our customers’ highly skilled engineers, it enables our engineers to constantly evaluate and stay on top of this ever-changing cyber landscape.

Where do you find the majority of cyberattacks are coming from? Are they just people seeing if they can penetrate networks for the challenge of it, or is it cybercriminals seeing if they can enter networks to obtain information and use that to generate profit in some way? Who is who in the zoo out there attacking these networks?

It is all across the board. We see attacks coming from the outside to gather information, and we see attacks coming from inside of corporations. It is literally all across the board in terms of how people are trying to penetrate networks.

What types of companies choose VirtualArmour to protect them?

They don’t necessarily come from any specific industry, but they do have common traits. They typically are highly regulated and lack the proper resources or skillset to deliver what is required on any security practice.

We have customers in health care, retail, financial, oil and gas, mining and many others. With the customer service we provide we have been able to maintain a 100% retention rate to date with our customer base. And what is really exciting about that is our typical contract ranges anywhere from one to three years.

Our business is built solely around services. Professional services are helping with architecture and projects. And then managed services is where we are the eyes and ears to a company’s network and security. We are monitoring 24/7. We are not just alerting but we are helping with a customer’s entire network.

Where you do stand right now in terms of revenue and what is the outlook?

As of our reported results for Q2 2018, our managed and professional services increased 78% to a record US$1.2 million versus the same year-ago quarter, and total revenue increased 50% to a record US$4 million. And with our current growth, we are well on track to continue at this tremendous pace.

Looking at our margins, you can see our business continues to grow and a favorable shift to our higher margin, managed and professional services business.

Are there any industry dynamics people are unaware of right now that you think have the potential to drive more business to VirtualArmour in the long term?

Cybercrime is expected to hit US$6 trillion annually by 2021.  Due to these numbers they are also expecting cybersecurity jobs to more than triple. This talent pool will remain flat, which is going to create a shortage of talent and make it more difficult for customers to maintain their existing talent. And that will drive customers to sign with companies like VirtualArmour to deliver on all these services.

And to wrap things up, how about some client feedback or observations from your team on making sure the companies you serve want to continue working with VirtualArmour. What’s the secret there?

I’d point out that we typically come across the same competitors when we compete for an opportunity. What’s really been exciting for us is that we have been coming out on top and it is due to the customer service experience.

When we win a new client, I always like to ask them why they chose VirtualArmour and we get the same answer over and over. We truly do take a different approach. We are more customer-focused. We provide playbooks around their business needs rather than telling them they have to do things a certain way. When they meet our engineers during the sales cycle, they come to believe they are some of the best in the business and that makes them comfortable about the services they are going to receive.

This story was originally published at proactiveinvestors.com on January 3, 2019 and featured in the Public Entrepreneur magazine.

Learn more about VirtualArmour International at https://www.virtualarmour.com/.