Please read this transcript I prepared from the recent interview published by Insidexploration. This transcript is not sponsored content.
https://insidexploration.com/interview-with-dinesh-kandanchatha/
Mike Coyle: Hi, I'm Mike Coyle with Inside Exploration. I'm here with Dinesh Kandanchathafrom Albert Mining, listed on the TSX under AIIM. Thanks for taking the time with me today.
Dinesh Kandanchatha: Thanks very much Mike.
Mike Coyle: What piqued your interest to join the company in the first place, Dinesh?
Dinesh Kandanchatha: I'm a technologist. I spent 20 years developing technology companies, investing in technology companies, and building teams to execute on technology opportunities. Over the course of the last year, I've been thinking about other applications for artificial intelligence and machine learning -- an area where I have a fair bit of experience.
Dinesh Kandanchatha: In the early spring, some investors in Albert approached me and said, "This is a really interesting company, would you be interested in taking a look at it?" I spent a few months doing due diligence, meeting with the management team to really understand how the technology was going to apply. I don't know anything about mining, but I know a lot about technology. I really needed to understand what was the practical application -- how was this application going to impact the mining industry? The conclusion I came to was that this was highly disruptive. AI and machine learning, together, as technologies can transform how mining is done -- how exploration is done, particularly. Those applications are also there for the actual process of mining, in terms of operations, but we are focused particularly around exploration.
Dinesh Kandanchatha: I'm an investor and an entrepreneur. When I see an opportunity to get returns, I like to take advantage of those opportunities. I contacted Michel to express my interest and talk to him about what I thought could be done differently. This is a very successful company that's been around for a long time. I wanted to give some ideas and see see how they work. Through those conversations, he said "why don't we work closer together?" I said yes. Not only did I come on as Chairman, but I also made a significant investment in the business.
Mike Coyle: What was the thinking behind re-branding the company as technology company?
Dinesh Kandanchatha: Albert and Albert Mining as a name doesn't reflect to the marketplace the real opportunity that the business has. The mining is one sector and one potential application of the CARDS technology, but there are many other applications of that technology. The idea of rebranding to Windfall Geotek is to really reference the fact that we can find a lot of different things in the ground. There are many things of value -- minerals, of course -- but there's also things like oil and gas. There are things like water, land mines, and other military applications. What we really wanted to do was reflect, in our name and in our go-to-market strategy, the opportunity for both investors and customers so that we can attract the right attention, negotiate, and execute on our business plan.
Mike Coyle: What role does your background play for Albert Mining moving forward?
Dinesh Kandanchatha: A big part of what I think I can bring is a track record of scaling businesses up. Over the course of my 20-year career, I've generated over a billion dollars in shareholder value. I've had two 200 million dollar-plus exits. I know how this game is played and, most importantly, I've played it on the field in multiple industries -- telecommunications, healthcare, and software services. My hope is that the commitment to excellence, along with the experience I have, can augment the incredible experience Michel has around the mining sector. What he brings is that in-depth knowledge that can only come from being a prospector, walking the land, and working with geologists. I can complement that with the business experience, the financial connections, and capital markets experience.
Mike Coyle: Can you explain your new business model and how you've applied it to this new contract that you've released today?
Dinesh Kandanchatha: Sure. The biggest challenge in artificial intelligence, machine learning, or any technology play is the fact that the revenue is really structured immediately. You have to go and find lots and lots of new customers. As we know in the mining industry, there's a good number -- 30,000 junior mining companies. Last year, 1,685 companies did primary exploration to the tune of $10 billion dollars. It's a big market, but there's sixteen hundred companies. If we were to just go with a software play, the pricing would be very high. We would have to charge millions of dollars for our algorithm. It can generate those kinds of returns for our clients, but in today's capital environment where investments are just not as prevalent as they were in 2011, for example when $20 billion dollars went into the business. In 2019, it was $10 billion -- half of the money is around now. That means exploration companies need their software vendors to partner with them. This new model is all about dealing with that market reality. Generating short-term cash flow is critically important, as it as a junior public company. We need to generate cashflow so that we're not relying on investors' capital in order to operate the business. We also need to build-in long-term potential returns.
Dinesh Kandanchatha: What we did with Chilean Metals was we a $100k licensing fee and then a $100k placement. This would be a-typical for us. In this case, Michel had done the analysis on the project and he knew it was a high-potential project that could return a lot, potentially, to our investors. That's why we structured that deal that way, but we will have deals where we might charge $500,000 or a million dollars for the license. We might take no equity. We will always charge some minimum because we are operating a business and we have to be at a cash flow neutral or cash flow positive basis.
Dinesh Kandanchatha: Our goal is to generate, not only those short-term returns that a security play can do, but also give our investors the potential to really large exponential returns that only an exploration company can do.
Dinesh Kandanchatha: You just touched on it -- you're an exploration company. Is there any plans for the future to acquire your own land and do your own exploration on these properties, versus just working with other companies?
Dinesh Kandanchatha: This is one of the questions. When you have a bit of a magic bullet, it would be crazy not to use it yourself. If we can find the right projects at the right price point, of course we will absolutely look at it. Our focus is on our primary play, which is technology. But there are many under-funded projects out there that are stalled that have tons of data that our algorithm can use to potentially bring back to life. It really comes down to our operations team -- our geologists -- to bring those projects forward to the Board. The Board will evaluate them to see if we are able to identify targets using our technology, which we have an incredible amount of faith in. Are the conditions right in terms of the regulatory frameworks for the project or are there any potential friction in actually developing the project?
Dinesh Kandanchatha: Developing a mining project and developing technology company are different things. We need to be really clear on those projects that we invest in -- to what level, when do we sell on the project, and all of those kinds of things. We're not closing the door.
Dinesh Kandanchatha: In your opinion, what separates your technology from everybody else in the market? I know it's a small market, but what really separates you from your competitors?
Dinesh Kandanchatha: As part of my due diligence, I looked at what was available out there. One thing I've learned in my mid-sized career in technology is that there's two key things no amount of capital can influence. One is time. And the other is data.
Dinesh Kandanchatha: Albert has the benefit of time, being in the business for 15 years and over 70 projects means that they have had the time to optimize their algorithm to actually have it proven. You can have the smartest developers in the world, but until they hit the test of data and get the time to optimize it, it doesn't matter how smart they are! That's factor number one, time. It will make Albert, in my view, succeed. If you're one year or two years in, you still may need 13 years to catch up. It doesn't matter how smart your guys are, you need the time because it actually takes time to run those simulations.
Dinesh Kandanchatha: The second thing is data. The amount of data that Albert holds and that we have received from clients that we've worked with over those 15 years is in the terabytes or petabytes, I'm sure. Where do our competitors get access to that store of data to optimize their algorithm? It's very difficult. They would either have to grow at an exponential rate and be signing 50-60 projects a year -- find 70 projects in 12 months, which is very challenging! That leads me to believe we have a head-start on the technology side.
Dinesh Kandanchatha: Where we may need some more work and the main reason why I'm excited about the opportunity is we need to educate the market. I think Albert's, pardon the pun, a hidden gem. We absolutely need to educate the market on what the potential is and then we also need to get capitalized appropriately to the market opportunity. Once we get those two things resolved, I genuinely believe that we will be leading the market.
Mike Coyle: In your opinion, why should investors buy into Albert Mining?
Dinesh Kandanchatha: The reason I would have an investor invest is the same reason that I invested. When you invest in companies, you invest in fundamentals. The fundamentals of this business are, one, a very strong management team -- invest in managers, not in opportunities and technologies. Invest in managers because managers decide if that opportunity will actually be realized or not. Number one, I really believe that the management team is key. It's a bit easier because I'm on it, so I'm well positioned to execute on this opportunity.
Dinesh Kandanchatha: Number two, it's proven. I'm not looking to show that my technology works. I can go out and call 70 people who say, "Yeah, it worked for me." That's a big factor to me, as an investor.
Dinesh Kandanchatha: The third thins is the fact that, as a technology company, we are not limited to mining. If you are looking at a technology play, you want to know that technology has application across multiple markets. Mining is the first application. Military applications are potential second application. Oil and gas might be a third. Aquifers might be a fourth. We have the background and the data to be able to look at additional applications of the technology, which presents huge market upside for you as an investor.
Dinesh Kandanchatha: It also de-risks you because, as a technology play, you're not tied to any individual project succeeding. You get the reliability and the security of a pure-play software with the potential upside in ROI of an exploration play or a security play or an energy play. This is the reason.
Dinesh Kandanchatha: We're still in very early days. We have a lot to do, a lot to execute on to build investor confidence, but my view is that the fundamentals are there. It's about execution and good news. I know how to execute well.
Mike Coyle: I really appreciate you taking the time with to meet with me today and look forward to doing this again with you soon.
Dinesh Kandanchatha: Thank you very much, I really appreciate your interest.
Mike Coyle: Thanks so much, Dinesh.
