It was great to hear from my good friend, Frank Holmes, once again.
This time, he had some very exciting news about his involvement in one of the more lucrative fields in high tech today.
But first, you may recall that when we spoke last Dec. 7, I noted that I have followed Frank’s career for many years because he ranks as one world’s leading experts on anything involving metals and mining.
He serves as the CEO and chief investment officer at U.S. Global Investors (Nasdaq:GROW). It’s a boutique investment management firm, specializing in actively managed equity and bond strategies.
As impressive as his title is, it only scratches the surface of why I think he is a visionary leader.
Frank also ranks as a leading expert on high tech. And his latest venture combines those two parts of his personality with the promise of huge payouts for investors.
Indeed, Frank has just become the chairman of a fast-moving nano-cap that is using artificial intelligence (AI) to disrupt the centuries-old mining sector.
A Compelling Penny Stock
I don’t ordinarily talk with you about penny stocks or those that are traded outside the U.S. But Frank’s involvement in Goldspot Discoveries Corp. (TSXV:SPOT.V) is just too compelling to leave sitting on the sidelines.
Here’s the thing. I believe Frank is really onto something big. And I can give you two proofs that I’m not the only one who thinks so.
First, the big picture…
Accenture says that by 2035, AI can double economic growth across the board in the 12 most advanced economies that now have a total value of $61 trillion.
In fact, we talk about this all the time at Strategic Tech Investor. AI is cutting-edge technology in more ways than one. My friend and colleague, Money Morning’s Tom Gentile, has found a way to get the most lucrative trades by incorporating AI. In fact, he’s designed a supercomputer that’s part-trading-algorithm and part AI-technology that delivers 250 money-doubling trades every year.
Check it out by clicking here.
Second, Goldspot has attracted some very respected hitters from mining. We’re talking the likes of Hochschild Mining, Sprott Mining Inc. and Yamana Gold Inc. They’re not just using Goldspot’s AI to find new discoveries, they also have invested in the aggressive young company.
And that actually brings up another key point here. Frank also has put his own money into Goldspot, and now owns close to 10% of the firm. In other words, the chairman of this nano-cap company has his interests aligned with ours.
The Future of Mining
Gold mining is one of the world’s oldest industries. We’re talking about more than five thousand years of history.
And while other resource industries such as oil and gas exploration have harnessed the power of fracking and other technologies, gold mining simply hasn’t seen much of a change.
Until now. Frank Holmes says that the use of AI is ushering in a new era of “peak discovery.”
AI will let miners harness vast troves of global mining data, and can identify patterns necessary to seek out where the richest veins of gold lay untapped.
Frank says that there is a much bigger tech push underway here than most realize.
“Advances in AI, cloud computing, open source algorithms, machine learning and other technologies have made it possible for us to aggregate all this data and accurately target where the best spots are to explore,” he said.
Geologist Denis Laviolette, who serves as CEO, made a huge breakthrough here. He launched this first-of-its-kind computing firm that aims to use AI and machine learning to revolutionize the mineral exploration business.
Since then, Laviolette has built a world class team of PhDs and experts in geology, physics, data science and other fields.
Laviolette and his team first proved this technology’s might two years ago when he showed a 3D geological model that correctly identified several target zones with the highest potential for gold.
As I said, Goldspot has already caught the industry’s attention. The firm is helping mining firms to cut costs and risks that come with early-stage mining exploration.
An Industry Investor as Well
Here’s the genius of the Goldspot business model…
Not only is the firm selling its technology to top-tier global miners. It’s also taking stakes in its own gold mines, finding the perfect locations for the advanced exploration tech tools.
The firm stands to collect royalties once these mines start to produce gold, a lucrative investing approach already taken by firms such as Franco-Nevada, Wheaton Precious Minerals, Royal Gold and others.
“The difference, though, is that Goldspot has developed an AI-powered screening platform to identify the very best and potentially most profitable investment opportunities,” notes Holmes. “The best way it was explained to me is that the great geologists can only overlap 4 maps, 4 different types of science maps at the same time to find a sweet spot to drill.
“Goldspot can do 50. It takes away a lot of the sort of gambling and exploring for gold. They use machine learning as an extensive geological brain power to unlock.”
The timing is perfect here, as gold miners have found it harder to find fresh seams of gold at a low cost. In 2006, there were 18 major new gold mining discoveries made across the globe.
Yet in recent years, very few new mines have been discovered. The industry has cut spending on global exploration from around $6 billion in 2012 to around $2 billion today.
Tapping Goldpsot’s AI platform will help miners ensure that they get the most bang for their buck for their exploration spending.
A Safety Play
Let me be clear on this. I believe in Frank Holmes and the vision he has laid out for Goldspot.
However, it’s a penny stock traded out of Canada, and only recently went public. That means it really only works for the high-risk portion of a tech investor’s portfolio.
It’s a great company, but by definition, new stocks like these can be too volatile for the average retail investor.
That’s why I think the Global X Robotics & Artificial Intelligence ETF (Nasdaq:BOTZ) is a great way to play the exciting AI field. The fund is based on an index that tracks the most dynamic firms in those two emerging tech industries.
Here you’ll find the globe’s top robotics firms, such as Fanuc Corp. (OTC:FANUY), AeroVironment Inc. (Nasdaq:AVAV) and iRobot Corp. (Nasdaq:IRBT), along with major industrial firms that are using AI and robotics in their factories. We’re talking about firms like Mitsubishi Electric and ABB Ltd. (NYSE:ABB).
Japan is a strong player in these fields, which explains why nearly half of the fund’s assets are invested in that country, with the U.S. accounting for another 30% of the portfolio.
And as the fund’s portfolio shows, a broad range of industries are being impacted by AI and robotics. In fact, robotic surgical device firm Intuitive Surgical Inc. (Nasdaq:ISRG) is the fund’s top holding.
This ETF has been trading a little less than three years, and in that time, has already outgunned the S&P 500. The future-focused holdings in this fund tell me that outperformance should be even greater in the future.
In other words, this ETF is the kind of stable performer you can count on for the long haul.
It’s great by itself, or as ballast for a cutting edge stock like Goldspot.
Cheers and good investing,
Michael A. Robinson