Categories: Base Metals / Precious Metals
Topics: General Base Metals / General Precious Metals

MineHub Technologies (TSX-V: MHUB)(OTC: MHUBF) Executive Chairman Vince Sorace on Being First-to-Market on a Digital Solution to the Multi-$Trillion Commodity Supply Chain Sector

 

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the executive chairman of a very, very unique opportunity — MineHub — Mr. Vince Sorace. 

Vince, it's great to have you on. I must admit, I saw a press release earlier that really caught my attention. And the reason it caught my attention is because most companies in the junior resource space will never, ever, ever turn a profit, make a dollar. Most companies in the junior resource space will never, ever, ever partner with the biggest names in the industry. And somehow, MineHub has figured out how to do both and has a business model that can scale that for years on end and potentially be an industry leader in what it does. 

Now, with all that being said, Vince, can you tell the folks listening and reading what it is that MineHub does? Because again, I think it's singular, I think it's unique, and I think you're positioned extremely well to lead this space.

Vince Sorace: Sure, and thanks for having me, Gerardo. Always love being here. So MineHub came about years ago as we were looking at opportunities within the mining industry and kind of technology solutions. 

And I think the mining industry has always been, call it, that dinosaur, to adopt new technologies and efficiencies. And so we saw this opportunity, and it really stemmed from the supply chain within the mining industry. 

And the supply chain in the mining industry involves, let's say, when a miner digs up his product and takes his commodities out of the ground and has to move it across the world through multiple different parties, multiple different jurisdictions, to smelters, to refined products, and get it to end users — so that's the mining supply chain.

What MineHub is and what MineHub has done is it has built a digital platform for supply chains in the commodities market. Believe it or not… but there is no standard solution that exists today that is a digital solution. The mining and the commodities industry still operates largely on telephones and paper and spreadsheets and emails. And this is an $11 trillion industry with no standard digital process or solution. 

And these supply chains are complex. They involve, as I said, so many interactions between parties, from sources of product, to logistics and transportation, international regulations, warehousing — and it doesn't take much for these to break down.

And we've heard, it's been headlines in the news in the past few years, the havoc around supply chain disruption and what it's caused to consumers, the economy, and its contribution to inflationary factors. 

So when somebody uses this — organizations on the MineHub platform — what do they get? Well, they get things like seamless order collaboration between all parties in that whole supply chain ecosystem. It allows companies to do things like forecast inventory levels better and understand where their product is at any point in time around the world as it's moving. Fraud, verify compliance, optimize operations, and track and report carbon emissions — which is a big one these days.

People want to know what that carbon emission footprint is from start to finish on products that they're selling. So ESG is a big, big component to what's happening in the world today. 

And here's where it gets interesting. So we built the solution, and, well, who's going to use it? We already have some of the largest corporations in the world using our platform. 

And to name a few, we've got BHP; they are essentially the largest natural resources company in the world. We've got Sumitomo Corp.; they are a global conglomerate involved in everything from resources to industrial products. We've got Southwire; they're one of the largest copper wire manufacturers in North America. And we just landed Codelco; they're the largest copper producer in the world. So that's a few and there are a lot more.

New solutions and platforms like MineHub rely on adoption. And this is where the opportunity exists today. We've been at this for a few years, and it's taken some time, but we're at this inflection point now for a few reasons. 

One, the industry is recognizing MineHub solutions as the market leader — the standard. Two, these large companies have massive ecosystems. So those ecosystems also need to operate on the platform for these large companies to realize the true benefits. And we're seeing that push now. We're seeing that network effect now — the virality from one large customer. 

So you sign the largest companies, you onboard their counterparties, everybody within their supply chain matrix, who then feed the sales pipeline and become paying customers, basically land and expand with existing accounts. The immediate addressable market to us is north of $7 billion.

Today, we announced our inaugural reporting of ARR, so annual recurring revenue. We've never done this before. And this is the first look into our, call it, financial performance. 

This year, we will have probably over 130 companies on the platform and expect an acceleration of user growth and revenue throughout 2023. So this is the start of it. And this network effect, this acceleration effect, in these types of platforms — these SaaS type models — this is where the real opportunity exists. Because when they start, they go. And this is where you can see that hockey stick effect and that ramp up. 

I've been talking to you a lot about what we're seeing, and this is obviously my opinion and what we're witnessing. But if you really want confirmation about how industry leaders feel about digital solutions and MineHub, please go to our website and listen to the recent panel discussion from the world's largest copper conference a few weeks ago. 

The panel discussion involves executives from Sumitomo Corp., from Southwire, and from Codelco. Listen to what they have to say — it's pretty decisive.

Gerardo Del Real: I'm looking at the corporate presentation earlier today and yesterday. As I was digging into it, the MineHub platform provides solutions for contracts, inventories, logistics, shipments, documents, financing, and measures ESG compliance and metrics all in one platform?

Vince Sorace: Correct… and this doesn't exist today.

Gerardo Del Real: That's absolutely fascinating that it doesn't exist today. You mentioned it being an $11 trillion opportunity. What is MineHub's market cap right now?

Vince Sorace: MineHub's market cap right now is sub-C$20 million. I would say, very opportunistic.

Gerardo Del Real: Agreed. And again, I had to make sure that, in my interpretation of what the platform does, that I had all of that correct because I don't know of anyone else that's doing it. And I certainly don't know of anyone else that already has the kind of collaborations with some of the world's biggest end users of this platform anywhere in this space.

Vince Sorace: No, and I think it's now, as I mentioned, we're at this inflection point with revenue in the company, with revenue growth, we believe, coming through what I mentioned being this virality and these network effects that we're witnessing with every one of these customers. And I feel there's a big disconnect within our market cap and the real opportunity that's here.

And let's talk about the blue sky opportunities of everything we're talking about right now. I mean, we're currently facilitating the copper, aluminum, and steel markets moving into the concentrate market. But we will be expanding into things like iron ore, nickel, and lithium. 

I'll take it to the next level. Our solutions are easily suited to other industries like agriculture, chemicals, and industrial products. We will walk before we run with our go-to-market strategy in the commodities market. But there's massive potential even well beyond that, and it's going to be an interesting future for this company.

Gerardo Del Real: No, look… unique and singular are two of the adjectives that I used earlier. I really encourage everyone to go to the corporate presentation. 

Something that stuck out to me… you mentioned $5.5 billion in operational losses due to compliance fines, right, that were incurred by banks in the first half of 2020. And 20% of that $5.5 billion was caused by human error, which, obviously, MineHub and its platform would do away with that immediately. And that's just fines incurred by banks. That doesn't speak to all of the other potential opportunities that you highlighted. 

I think your timing is excellent for this. If anyone out there knows of a similar platform that has this type of scale, I would love to know about it because I just haven't seen it. I'm glad that you brought the opportunity to our attention. I'm glad that you're sharing it with our audience, Vince.

Vince Sorace: Always a pleasure, and I hope everybody out there sees the same opportunity we do.

Gerardo Del Real: What comes next? Obviously, you're looking to scale this out. You mentioned walking before running. What are the next steps for MineHub?

Vince Sorace: The next steps for MineHub are all going to be centered around expansion and revenue growth. There are additional opportunities to add additional services on the platform to capture additional revenue, as I mentioned, additional markets. 

So over the course of the next period, that's what everybody's going to see; customer growth, revenue growth, and expansion into different markets and different opportunities.

Gerardo Del Real: Fascinating space, fascinating opportunity. It's hard for me to believe that in 2023, you're the first-to-market on this scale with this solution. I'm looking forward to having you back on and looking forward to watching the company grow. Thanks again, Vince.

Vince Sorace: Thanks, Gerardo.

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