EarthLabs: Deutsche Goldmesse Spring 2024 Presentation

0:09 We're starting off with a very interesting story actually. Earth Labs Inc. TicOsymbo is on the Venture Exchange in Toronto's SPOT, S-P-O-T. They also have a listing here in Frankfurt that'd be 8-E-K-O. I say an interesting story because, I'm not gonna say too much. I'll let the guys explain. CJ, you can come on and take it on.

0:30 Yeah, I'm not gonna say too much. I wanna say too much, though. Take it away. There we go. Hello, everyone. I'm CJ, Chief Business Officer of Earth Labs. We're an investment and technology issuer listed on the TSX Venture, under Spot, the OTCQX and more recently on the Frankfurt Exchange. So our company is a little bit different from the other issuers at this conference, but our mandate remains the same to provide the same growth profile that you see in the junior mining sector. But we also have other subs to hopefully try and mitigate some of the risk that comes in investing in our sector.

1:19 So where are we right now?

1:26 Is it loaded right now?

1:30 Okay, that's okay. I'll freestyle then. No loading? Okay. So we're essentially a Frankenstein. What we saw all the best parts in the sector or what the sector has to offer. And we provide shareholders maximum exposure to the junior mining sector with our 3 verticals. So we have an investment portfolio. We also have media assets. And we also have a royalty portfolio. So Earth Labs was formerly known as Gold Spot Discoveries. We were the pioneers of the use of AI in exploration. And we built this company beginning in 2016. However, we saw a much larger opportunity in building a company that would capture the new generation of resource investors, and we saw that this opportunity would provide significantly more upside than dealing solely with the explorers.

2:30 So the last 3 years, we saw the divestment of our exploration tech to ALS. We sold that for 30 million bucks and the key acquisition of several media assets in CEO.ca, the Northern Miner, Mining.com, DigiGeo and the Canadian Mining Journal. We're also the largest royalty holders in Newfoundland. We have a basket of royalties there, but we're anchored by our 0.2% NSR on Newfound Gold's Queenway. So that's our crown jewel and flagship royalty. So we're all here because hopefully we're on the cusp of another bull market supercycle. Since the venture's inception in the 1990s, we're essentially at its lowest point and hopefully we don't go any lower, but you know, who knows, but we're betting that we can't go any lower. So if you actually take out the bull run during COVID, we're mired in the longest bear market since the inception's history.

3:38 And this is despite the fact that key commodities in the venture have been moving. So we all know that gold is moving, silver is following, the supply overhang in copper is making mainstream news, and even uranium is having its day in the sun. However, we still have not seen the the spillover of capital into the junior market space, but we've built a company that when it does so, we're in a unique position to capture it.

4:22 So we're in a unique position because the new generation of investors are growingly turning to social media as a source of investment ideas. And they're coming to the table with a lot of money. And moreover, 80% of institutional investors are now using social media as part of their regular due diligence process. So they're not acting on the ideas, but they've incorporated it into their research. And the result of this is a new environment where stocks see surges of popularity and liquidity due to social media attention. And so we see this as the new paradigm of dissemination of information and how stocks will realize their true underlying value.

5:13 So we saw this. This is a fun case study chart of the euphoria we saw in select meme stocks during the last bull run or during COVID. So CEO.ca and our media distribution provides us with incredible insights on what people are looking at and what they're investing in. We have 12 and a half million unique users to the site, and this provides us with proprietary data, specifically sentiment data, that we can use to our advantage. So sentiment data is crucial investing now because it complements traditional analysis with important insights in market psychology. It helps with risk management, but more importantly, it is a proven source of alpha generation now.

6:04 So by understanding and leveraging sentiment trends, we can make more informed decisions to enhance our investment in outcomes. So this data is accompanied by our existing market data, insider data, and our drill data. We foresee this giving us a further edge than any other money manager out there. So as the new generation of investors enter a space, The typical entry is in individual stocks or ETFs. However, as the enthusiasm in the bull market continues, they make their way into more specialized funds or merchant banks that offer higher returns. So these vehicles not only offer greater torque but also the liquidity that individuals want as well. So during the last significant bull run from 2001 to 2007, the Venture gained 250% while more specialized funds, we use Pine Tree here, have absolute torque. They gained 11,000 during the same duration.

7:12 So Earth Labs, we want to position ourselves to capture similar alpha. However, unlike other investment issuers out there, or ETFs, or resource funds in general, we have other businesses that will not only help us gain these sorts of asymmetric gains, but also mitigate risk as well. So our media platforms are generating revenue for us right now through ad sales. We also have reoccurring revenue through the sales of our level 2 services, but we have a pipeline of other products and widgets that we want to start putting out there to gain that reoccurring revenue base. And you know, that helps mitigate risk, but we can, we're using that cash flow right now to reinvest into our platforms to take advantage of when the money does start coming back in and also further adding to our portfolio.

8:08 So currently we have a fairly strong share registry. We're essentially a closed-end fund, so we don't foresee any dilution in the future. Eric Sprott owns close to 18% of us and management and subsidiary leaders own another 18. So our value proposition right now, so if you remove the market speculation in general, we closed at $0.21 and 1 1⁄2. Our portfolio in itself, we have around 40 million in cash and securities right now. That's worth 29 cents. Book value of our media assets is 17 cents, and our royalty of 0.2% on Newfound Gold's Queenway.

8:55 I like using Great Bear's 2%, NSR as a natural comp. They were acquired for 200 million. So I think we offer around 60 cents in value right now when we're trading at 21 and a half and bias for value and hold on for the upside, I guess. So that's Earth Labs, Quick and dirty. Anybody got any questions? Questions? Tom. CJ, have you got a Chinese wall between your media assets and the fund? Yes, there is. Strict. We have a, we essentially have our own CIO that's managing the discretionary fund in Earth Labs proper.

9:46 That's correct. Yeah. Except the gold, what else is your portfolio? Our portfolio, we are more heavily weighted in precious metals right now. But we also have some base metals in there and 1 or 2 lithium companies. We don't disclose our investment portfolio, just being the ability to be nimble, especially in the micro cap space, is to our advantage, where we can trim positions and add to positions. That being said, we are trading at a discount to our nav because of that. But in the future, let's say we are in an actual market, we can decide then if we want to publish unaudited nav figures on a monthly basis, or we'll cross that bridge when we get there.

10:46 I also had a question, CJ. What do you call this company? When you go to a family reunion and say, I'm the chief business officer of EarthLabs, which is a dot, dot, dot. We don't want to be called. We never wanted to be painted with a brush, we didn't want to be put into a bucket. We're a Frankenstein in what we saw that the best of what this sector has to offer. And we felt it when we came out of the gates with AI and exploration, we're such an archaic sector and trying to convince old geologists that using a computer would benefit them was hard. And so it's kind of the same problem.

11:35 And, you know, we'll take that on. We'll do more of these conferences and take more investor meetings and whatnot. So we're a hybrid of everything. Okay. And then one last point. $40 million in cash. You're cheap, but everything else is cheap. What are you thinking, share buybacks, go look for other opportunities, something along those lines? Not right now. Like, I'd love to give back value to equity holders through share buybacks or even a dividend, but right now we're reinvesting everything back into the company. I guess if you want to compare us to a junior explorer, a good analogy is like they have a small producing asset and they're putting that back into the ground or something like that. Is there a breakdown that you can give us for the plan as to what percentage of that 40 million bucks goes where?

12:26 Like well, the 40 million is earmarked for equities and anything that the media asset spits out, it's put into the business. But it's like an 80-20 split or something like that? We're burning a little bit right now, but it's like the lion, like I can truly say the lion's share of the 40 million is earmarked for investing. Okay. Yeah. Good. Good. Well, thank you, CJ. Any other questions? Yes. Joanna. Just a question. I really love using the sentiment for, you know, the making your decisions, what to buy, especially if you're looking at entering with larger volumes, that's something. What are your thoughts about exiting? Because I think that's the challenge where the sites will fund in the sector. It's the entries, not the problem, but the exit, right? Because the volume is too big. Yeah, so what's cool, you can leverage sentiment on an exit strategy in that we have seen increased chatter which could potentially be an indicator of that some sort of liquidity event or some sort of promotional event is coming down the line or just chatter in general seems to indicate or correlate to future liquidity.

13:38 However, liquidity in general is one of the things that we also look at when we're buying into a stock. So we, However, we all know that liquidity can dry up pretty quickly, but we look at it first before we buy into a stock. Yeah. You kind of need 2 events, so that's your... It's not the golden bullet as well, right, but it definitely helps. Hopefully we're going into companies that are raising enough cash and have enough catalysts on the horizon where it is going to generate some sort of liquidity. But We have seen that sentiment does somewhat correlate. Any more questions? Thank you so much.

14:24 Thanks, guys. Thank you.