Pampa Metals Corp C.PM

HOW VERAI’S PARTNERSHIPS SKIP STRAIGHT TO THE TARGETS

[yukon_gold]

 

11 March, 2022

 

Using AI and ML to build a profile-library for prospective deposits under cover.

Boston-based asset generator VerAI Discoveries gave the first public inkling of its novel business model in February, when it announced a partnership with Pampa Metals (CSE: PM).

VerAI has its own portfolio of claims in Chile, and has done the groundwork to pinpoint targets, so in effect it is outsourcing drilling – and confirmation of the targets – to Pampa Metals, which in return will have the option to become a majority partner in whichever projects prove fruitful.

As the company’s name implies, Artificial Intelligence (AI) – or Machine Learning more specifically – plays an important role in identifying the targets. Co-founders Yair Frastai (CEO) and Amitai Axelrod (COO) both have backgrounds in defence intelligence and for several years have been applying the “search and find” techniques learned in that environment to exploration R&D.

The key component is an AI platform that learns and discriminates the unique geophysical signature of existing mineral deposits, and then searches for similar signatures in data amassed across mining jurisdictions where undiscovered deposits are likely.

Traditionally, exploration geologists looking at areas with a lot of cover have been searching for conditions and proxies such as hydrothermal alterations and local lithology or geophysical anomalies, which is an ineffective and subjective approach, often varying according to the experience of the geologist involved, Frastai explained to Chile Explore Report.

However, VerAI’s approach is systematic, objective and measurable. The search object is the profile of a known, economically viable deposit, based on geophysical surveys set at the specific resolution required, he noted, adding that VerAI has profiles for high- and low-sulphidation gold systems as well as porphyry copper, skarn, IOCG and zinc deposits.

For example, deploying a blind test in Arizona the firm’s targeting platform “rediscovered” more than 70% of the existing copper and zinc mineral deposits in the area, with a false-positive rate of 1:5.

VerAI COO Amitai Axelrod (L) and CEO Yair Frastai (R)

In this way, targets can be identified in as little as two months and the targeting cost reduced by more than 80%, compared to traditional exploration programs that can take years, and consume several millions of dollars. The company expects 10% of tested areas to deliver discoveries, rather than the industry’s typical rate of at least 1:1000.

Thus, the deal with Pampa Metals covers targets that lie across eight property blocks 100% owned by VerAI and totalling about 18,700Ha in the Paleocene (or Central) mineral belt of northern Chile. VerAI is betting that its partner will commit to at least one of the properties as a designated project within six months.

If Pampa Metals confirms a designated project, it has the option to acquire 51% of the project, subject to a further exploration investment of US$1mn over two years, and 75% by completing a PEA.

Pampa Metals in action at one of its own projects

Frastai and Axelrod stress that VerAI has no interest in a business model based on offering its technology as a service to third parties. The idea is to offer verified targets, have a partner develop them, and subsequently earn purely through royalties and minority equity.

REPLICATING THE MODEL

VerAI has four other property portfolios, targeting Nevada, Arizona, Peru and the Domeyko Cordillera in Chile, and expects to have secured partners for all five portfolios by year-end. Frastai expects to announce a partner in Peru shortly, and talks are ongoing with potential partners for Nevada and Arizona.

To start a portfolio, Frastai and Axelrod draw on their years of assisting the exploration industry and the expert contacts they have accumulated, first deciding which commodity to work with, then settling on a jurisdiction known for that commodity. They then seek out the relevant datasets from public and private sources. Often, in economies that depend heavily on mining there are national mapping projects that have large quantities of high-resolution data, Frastai pointed out.

While the core VerAI model relies on partnering with an exploration firm that is competent in drilling and testing, part of the work of assessing a jurisdiction includes the study of mining firms already active in the area. These could be obvious partners if their ore reserves are getting low, and VerAI has indeed been talking with majors to help specifically with porphyry copper exploration in Arizona and gold exploration in Nevada.

It’s not a business model based on offering the technology as a service; theend-game is revenue through royalties.

Then there is the task of scanning the data for likely matches and purchasing the target areas. There is no need to acquire large tracts of land and the research can be done remotely, which greatly lowers VerAI’s funding requirements. This approach also keeps the carbon footprint low and allows VerAI to pivot rapidly if necessary.

Compared to a traditional project generator that spends three to four years building a portfolio in a selected jurisdiction, VerAI can have an asset portfolio in hand in a couple of months, spending less than a tenth of the amount its peers spend.

As an example of pivoting, the firm is thinking of scaling its North American operations more to battery metals in 2023 and views the inclusion of precious metals in Nevada and Chile as a long-term risk-mitigator in the portfolio.

VerAI has its shareholders’ interests in mind with a model built on relatively low upfront investment, but at the same time it is aware of the need to continue investing in the technology in order to improve its ability to discover different commodities, as well as improving the ability to test the quality of a confirmed system.