Mining
Project Generators: Exploration Risk for a Lower Cost
Project Generators: Exploration Risk for a Lower Cost
Sponsored by: Altus Strategies
In a bear market for junior miners, exploration capital can be hard to come by. However, one type of company strategy does its best to bypass this risk and fund multiple projects without having to constantly raise capital through equity.
Enter the Project Generator model. How does it work? Basically, a company gets more established companies with substantial capital to joint venture on its wide portfolio of properties. The funding companies have the money to spend and may not have a depth of exploration projects themselves. Therefore, it can be a perfect match for both parties.
The downside of this model is that shareholders of the project generator do not get all of the discovery upside, but the benefits are still quite numerous. First, it decreases dilution risk by having much of the exploration capital provided by majors and midtiers. Also, it spreads the odds of making a discovery to a portfolio of multiple properties and commodities, rather than just focusing on one which may or may not work out. Last, by having the big boys come in on projects, shareholders have reassurance of the technical validity and due diligence of prospects.
There is some very supportive data for the model as well. Over the last five years, shares in project generators are up 121% while shares in listed juniors (under $50 million market cap) are down -55%. Project generators also have more skin in the game (11.0% vs. 7.6%) and are able to secure more overall funding on average.
Energy
Visualizing U.S. Consumption of Fuel and Materials per Capita
Wealthy countries consume large amounts of natural resources per capita, and the U.S. is no exception. See how much is used per person.

Visualizing U.S. Consumption of Fuel and Materials per Capita
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Wealthy countries consume massive amounts of natural resources per capita, and the United States is no exception.
According to data from the National Mining Association, each American needs more than 39,000 pounds (17,700 kg) of minerals and fossil fuels annually to maintain their standard of living.
Materials We Need to Build
Every building around us and every sidewalk we walk on is made of sand, steel, and cement.
As a result, these materials lead consumption per capita in the United States. On average, each person in America drives the demand of over 10,000 lbs of stone and around 7,000 lbs of sand and gravel per year.
Material/Fossil Fuel | Pounds Per Person |
---|---|
Stone | 10,643 |
Natural Gas | 9,456 |
Sand, Gravel | 7,088 |
Petroleum Products | 6,527 |
Coal | 3,290 |
Cement | 724 |
Other Nonmetals | 569 |
Salt | 359 |
Iron Ore | 239 |
Phosphate Rock | 166 |
Sulfur | 66 |
Potash | 49 |
Soda Ash | 36 |
Bauxite (Aluminum) | 24 |
Other Metals | 21 |
Copper | 13 |
Lead | 11 |
Zinc | 6 |
Manganese | 4 |
Total | 39,291 |
The construction industry is a major contributor to the U.S. economy.
Crushed stone, sand, gravel, and other construction aggregates represent half of the industrial minerals produced in the country, resulting in $29 billion in revenue per year.
Also on the list are crucial hard metals such as copper, aluminum, iron ore, and of course many rarer metals used in smaller quantities each year. These rarer metals can make a big economic difference even when their uses are more concentrated and isolated—for example, palladium (primarily used in catalytic converters) costs $54 million per tonne.
Fuels Powering our Lives
Despite ongoing efforts to fight climate change and reduce carbon emissions, each person in the U.S. uses over 19,000 lbs of fossil fuels per year.
Gasoline is the most consumed petroleum product in the United States.
In 2021, finished motor gasoline consumption averaged about 369 million gallons per day, equal to about 44% of total U.S. petroleum use. Distillate fuel oil (20%), hydrocarbon gas liquids (17%), and jet fuel (7%) were the next most important uses.
Reliance on Other Countries
Over the past three decades, the United States has become reliant on foreign sources to meet domestic demand for minerals and fossil fuels. Today, the country is 100% import-reliant for 17 mineral commodities and at least 50% for 30 others.
In order to reduce the dependency on other countries, namely China, the Biden administration has been working to diversify supply chains in critical minerals. This includes strengthening alliances with other countries such as Australia, India, and Japan.
However, questions still remain about how soon these policies can make an impact, and the degree to which they can ultimately help localize and diversify supply chains.
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