Condor Resources is an explorer and project generator. Unlike junior exploration companies with a single project focus that ultimately determines the success or failure of the company, a project generator holds a large portfolio of projects at various stages with the goal of finding partners who will advance the projects. We currently have a portfolio of 12 projects, exclusively in Peru.
How a Project Generator Works
After developing a mineralization hypothesis, collecting data and compiling research, a project generator will stake claims or acquire mineral rights on promising prospects. A project generator then completes preliminary exploration work on the property through geological mapping, geochemistry and geophysics. At that point, we decide to advance the project ourselves, or work to secure an option agreement with a partner that will continue more advanced exploration. The option agreement typically gives the partner the right to earn a stated interest in the project, subject to completion of an agreed upon amount of exploration within a certain timeframe, and usually combined with annual cash payments. If the partner meets their obligations and earns an interest in the project, a joint venture is formed, and the both parties contribute to the next stage of exploration on the property. During the option stage, the partner may choose to discontinue with the project, and return the property to the project generator.
Benefits of a Project Generator
With over 2000 exploration companies listed on the TSX and TSX.V, there is no shortage of mining stories pining for investment dollars. While the rewards can be great, the risks for investors are high and the chances of a major discovery are small. With the project generator model, multiple land packages are staked and held in a large portfolio. The company then seeks joint ventures with larger mining companies to fund exploration advancements. The benefits to shareholders are twofold:
To fund exploration work, most junior mining companies rely on their shareholders for capital expenditures. This often results in share dilution, and if not managed properly, can create dismal returns for investors. In contrast, a project generator seeks partnerships with larger mining companies who agree to advance the projects forward under certain terms. This allows the project generator to access capital for exploration work while limiting share dilution or eliminating it altogether.
Investing in mining can be risky. The odds of finding a major discovery are small. Which is why seasoned investors know that a diversified exploration portfolio is a strategic way to reduce risk. Shareholders of a project generator own multiple projects, each with their own exploration upside. If one project fails, the project generator will not cease to exist, as it owns many other projects with viable discovery options.