This is not your Grandparents' Exploration Company.
Greenfields aspires to be a listed incubator (or in North America, aka Project Generator). This business model benefits from a low cost, and captures the value of being a first-mover through collaboration and diversification. Exploration incubators focus on carrying out work that adds value to a project, before partnering with other companies that take the project through the next level of exploration/evaluation. An exploration incubator does not intend to become a miner, rather it maintains exposure to the upside by having a minority holding in a project. This allows the company to specialise, focus, and reduce the risk associated with exploration, while retaining exposure to the upside, and potential to build a divers portfolio project interests. The incubator epitomises the 80:20 rule and the KISS principle.
The Incubator model works! Over the last five years, the share price of a Canadian Project Generator substantially outperformed major mining companies like BHP, Rio Tinto, Teck, and First Quantum. By focusing on work that creates a large increase in value and then partnering or transacting on a project, it may be possible to monetise exploration assets that may otherwise take many years to generate cash. This virtuous circle also provides the shareholder with a reduced risk of dilution as future exploration programs may be internally funded.
The Greenfields variation on the Project Generator model is that it may also create new companies, in addition to collaborating with third parties. By listing value-added projects into Initial Public Offerings on stock exchanges, shareholders in Greenfields may benefit from in specie share distributions as well as cash dividends. This mechanism eliminates a reliance on having to find a collaboration partner, while bringing in new capital and taking the project to the next level.
Furthermore, Greenfields seeks to differentiate itself by forming collaborative relationships with government and academic institutions. In eastern Greenland, the company intends to use the consulting and contracting services of the Danish geological survey ('GEUS'). The company also intends to sponsor PhD students at the Centre for Exploration Targeting, which has long standing experience of working in Greenland and with GEUS. Through sponsoring PhD students, the company benefits not only from deep, focussed research, but gains access to the professorial supervisors and, conceptually, government grants.
Uncertainty is a necessary quality for exploration, for without it there can be no discovery! It is in uncertainty where great value is found. Greenfields embraces uncertainty with the knowledge that going where others have tread before is less likely to be rewarding for its investors. For this reason, Greenfields targets areas where there is little or no prior modern exploration, like eastern Greenland, where level of uncertainty can be rapidly decreased to create meaningful value for its investors.
Uncertainty becomes risk when you are exposed to it. In this case, uncertainty becomes risk when there is financial exposure. Greenfields tackles this risk by focusing on work that makes the project more appealing to the market, then collaborating or dealing with other entities to take it to the next level. For example, in our Greenland licenses, there is no regional geophysical data. The collection of geophysical data is key to generating targets for exploration drilling. Fortunately, such methods are very cost effective over large areas. Greenfields proposes to undertake airborne surveys to generate multiple targets, while keeping expenditure to a minimum, to create maximum value for our shareholders.
The strength of the Project Generator model is that it allows for a larger number of projects. Conventional exploration companies often have around six projects, and can generally only focus on one or two areas at a time. By collaborating with other companies, a Project Generator can have many projects that are simultaneously subject to deep focus by multiple teams. A Project Generator does not have to 'pick winners' within its portfolio. An additional benefit is that through collaborating with multiple teams, the Greenfields team benefits from a diversity of thinking to create wisdom in addition to knowledge. Greenfields aims to build value and strength through collaboration and diversification.