Canadian company EarthLabs is returning to a pure “money ball” mining investing focus with the planned C$30 million sale of its GoldSpot exploration technology and consulting business to global analytical and testing group ALS.
The deal, due to close by the end of the year, will leave EarthLabs with a pile of cash – nearly C$54 million in the bank – its mineral royalty portfolio and equity investments, and the Resource Quantamental, CEO.CA and DigiGeoData fintech assets expected to power its trading activities.
“We founded the company with the vision for a money ball approach to mining investing and with our recent acquisitions, we have a tremendous opportunity to deploy our model, with new tools and platforms we didn’t have before that will advance our offerings,” EarthLabs president and executive chair, Denis Laviolette said.
“The GoldSpot consultancy was originally formed to finance the development of in-house technologies, make discoveries, grow capital and acquire businesses.
“The sale of our ExplorTech consulting toolbox will accelerate the construction of our leaner, capital-light and more automatable product licensing portfolio with a significantly larger total addressable market.”
EarthLabs (formerly GoldSpot Discoveries) – formed in 2016 as a “first-of-its-kind quant shop and tech incubator” – acquired junior resource-stock investment trading platform CEO.CA for C$17 million last October and added SaaS-based digital mapping firm DigiGeoData (C$3m deal) earlier this year. The company sees integration with its Resource Quantamental AI-driven “investment decision model” delivering a “global financial trading and analysis platform, anchored in the mining space and powered through AI and big data”.
The fintech platform would use algorithms to “stake acreage, acquire projects and royalties, and invest in public vehicles to create a portfolio of assets with the greatest reward to risk ratio”.
EarthLabs also added Ridgeline Exploration and Geotic to its ExplorTech arm, which claims to have pioneered innovative geological and geostatistical workflows to create an exploration technology and consulting leader.
Selling that business to ALS would reduce its R&D and G&A costs by about 70% year over year, EarthLabs said.
Australian Securities Exchange-listed ALS, which has a current market value around A$5.4 billion, has more than 350 analytical and testing sites in 65 countries.
It has agreed to take on C$6 million of GoldSpot liabilities as well as paying $24m cash for the business.
EarthLabs’ share price was up more than 7% to 22c on Tuesday, capitalising the company at about C$30 million.