Abitibi Royalties Inc.
It looks as if Abitibi's hopes for a royalty flow from Canadian Malartic are being realized. This is a game changer.
VAL-D’OR, Québec, Jan. 16, 2019 (GLOBE NEWSWIRE) -- Abitibi Royalties Inc. (RZZ-TSX-V, ATBYF-OTC-Nasdaq Intl: “Abitibi Royalties” or the “Company”) is pleased to announce that production commenced at the end of Q4-2018 in the area covered by the Company’s 3% net smelter royalty (“NSR”) at the Canadian Malartic Mine near Val-d’Or Québec (Fig. 1). Canadian Malartic is the largest gold mine in Canada and is operated by Agnico Eagle Mines Limited and Yamana Gold Inc.
https://www.abitibiroyalties.com/news/2019/january16/
CO2 GRO
Recently, I contacted Sam Kanes, VP of Business Development, in order to learn more about the company's business model and its technology. By way of a follow-up to the conversation, he sent me three recently-posted documents:
CO2 Foliar Spray Executive Summary
CO2 GRO Foliar Spray Technology
CO2 GRO Inc. January 2019 Corporate Presentation
The documents can be accessed here:
Presentations January 2019
After some reflection, I was left with the following impressions:
- The company is making significant progress in demonstrating in a rigorous way, the benefits of its technology in real world situations.
- The technology provides a definitive, quantifiable benefit to commercial growers of high value crops.
- GROW's business model "de-risks" to a major degree, the uncertainties of adopting the technology - something which should hasten the rate of adoption by growers.
- The technology can be integrated easily with most existing overhead irrigation systems.
- GROW has narrowed its focus and is proceeding to develop agreements within major target markets.
- The technology is applicable to a variety of high value crops and growing situations (e.g. enclosed greenhouses, canopy-type greenhouses, open fields). This adaptability is a decided advantage as the company's future is not tethered to satisfying the needs of a narrow market.
- GROW is active in the U.S hemp industry
GROW is amenable to negotiating agreements with major equipment manufacturers and suppliers of CO2 for the use of its technology (Sam Kanes, personal communication, January 20, 2019). This is attractive as it could represent a significant value add to equipment manufacturers or suppliers of CO2 and add nicely to GROW's bottom line - a balance of mutual benefits.
GROW continues to make inroads into the greenhouse industry. This will take time as the agricultural community is understandably cautious about accepting new technologies. One of the reasons why the Civilian Conservation Corps was so successful in improving agricultural practices in the 1930's in the US was that it understood this "show me first" attitude and fielded many demonstration areas for farmers to see things for themselves. It appears that GROW understands this mindset. The power of story telling is underestimated ... and it involves far more than testimonials.
The cannabis industry may be a bit more open to adopting GROW's technology because it enhances desirable characteristics such as the THC and CBD content in buds and increases growth rates significantly in a high value crop, thereby increasing financial returns on a per unit area basis. Further, the technology is cheaper than traditional CO2 gassing, the current method used to enhance growth in cannabis operations in greenhouses.
The catalyst for this potential bonanza will be approval by Health Canada for the use of CO2 Foliar Spray on cannabis plants. Health Canada gave approval for it use on other plants for human consumption such as lettuce in Q3 2018. However, for political reasons, the agency is more cautious in its approach to cannabis. Apparently, the prohibition of CO2 Foliar Spray on vegetative and and flowering room growth applies only to Canada. Does this place Canadian producers at a competitive disadvantage or will it drive producers to other jurisdictions all things being equal? The heartening thing is that GROW's technology can be used anywhere.
Another catalyst could be Health Canada's approval for the use of CO2 Foliar Spray on plant cuttings to enhance root formation, starting in 2019.
Another market for GROW is the hemp industry. Recent federal legislation in the U.S. has eased restrictions on the growing of hemp provided the THC content is less than 0.3 percent. The legislation is subject to variation by state. Here is a synopsis:
State Industrial Hemp Statutes
For the more technically minded, here is the link to the US Patent Office for US Patent 6,209,855 Gas/liquid mixing apparatus and method, the core technology for GROW.
Potential Headwinds
GROW has great potential. However, there could be challenges:
- Difficulties with measures to protect its intellectual property
- The emergence of competitive technologies and applications
- Failure to secure regulatory approval for the use of CO2 Foliar Spray on cannabis plants in Canada - not a game ender as the technology can be used in other jurisdictions and for application on other high value crops
- It occupies a strategic sweet spot in an industry which is expanding rapidly.
- During "hard times" people are likely to continue with drinking and smoking weed.
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A Note about Innovation
Human ingenuity never fails to amaze me:
- the imagination and so-called "surprises" on the part of researchers which leads to new discoveries; and,
- the genius on the part of entrepreneurs for connecting these discoveries to practical applications and the building of businesses.
At one time, I was interested in developing and selling the "ultimate" outdoors shirt. I still feel that the current crop falls far short of the "ideal" garment. As part of my background research, I came across a wonderful source: TechLink
The Department of Defense has approximately 120 labs and research facilities nationwide, involving the Air Force, Army, Navy, and specialized agencies such as the National Security Agency. Defense TechLink has facilitated partnerships with most of these centers, linking them with private industry for technology licensing, transfer, and joint R&D. TechLink is a US Department of Defense Partnership Intermediary per Authority 15 USC 3715.
Companies of All Sizes
We assist companies ranging in size from one-person start-ups to Global 100 corporations. Most have fewer than 100 employees. Through TechLink-assisted partnerships, companies can access new DoD inventions, greatly leverage their R&D investments, and more successfully develop and commercialize new technologies.
About once a year, I visit the site to see what's on offer. It's a gold mine of ideas. And my bet is that getting rights to use the technology is far easier and faster than trying to wrestle with university commercialization offices and the politics of academia. I once heard that the reason why academics give no quarter in their debates is because the stakes are so low. Some have difficulty in leaving this mindset behind when confronted by the realities of the outside world, but this is changing quickly. Universities are now vital contributors to innovation. One need only check the distribution of new patents and new business formation. Overwhelmingly, they originate within cities and towns blessed with the presence of one or more universities. GROW is but one example.
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