>>This is my first time responding on SI. I worked in the computer field for many years, so maybe I can contribute something to this discussion<<
Welcome John, and I'm sure you can!
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>>It is software for a limited vertical market - mining. I suspect that there is some competition, but am not familiar with this market. My guess is that at this stage of computer evolution, there could be quite a few companies with excellent home grown software. Since these cos. have technical types on staff, surely this would be a project with a big payout and internal funding amongst at least the larger mining co's. This means that if there is enough potential to sell software in this market, there could be a number of these cos. ready to go to market, and be competition to GEMCOM. <<
Probably this is why Amanda Lang wrote that the partnership agreement with Teck would "change fortunes overnight". An analyst was reported saying " a similar evolution took place several years ago among petroleum companies which began buying their software from an outside source rather than developing it themselves". The bet here is that mining companies will be buying their software requirements from GCM rather than develop it themselves.
The software EQWin developed by Teck which GCM is now marketing can also be used by non-mining companies. "Any company concerned over the environment can make use of the software", said Mike Filion, Teck's vice president, "and it is a rapidly growing market for environmental products."
"EQWin can be used in any industry where environmental considerations are a factor. The City of Vancouver purchased the software to monitor activities at the Burns Bog landfill. As concern for environmental protection grows, so does the market for EQWin."
Teck chosed GCM as a partner because it was a customer of GCM and had first-hand experience of their commitment to quality in both their products and services. Together, the companies plan to capitalize on
the rapidly growing market for environmental products."
Also, GCM is growing by acquiring other related software companies. In January this year they bought Lynx do Brasil, a competing organization.
"A new majority-owned company, Gemcom do Brasil, will be formed to operate as a new sales and support office for Gemcom products. The Company anticipates this move will increase revenues by $300,000 in the first year and by $1 million five years out", reported in the press release.
"With the formation of this new company, Gemcom will have the largest installed base of exploration and mining software in Brazil," says Gemcom President and CEO Peter Franklin. "Having the largest market share will position us well for growth in the region. It will also enable Gemcom to immediately increase sales in Brazil, which currently has a vibrant and expanding mining industry."
In 1995, it bought a similarly related software company in Austraila.
>> Looking at the performance on the TSE chart, it is not impressive in spite of the recent run-up. I
don't think I would bet on it with the info so far - but then, I am not a day trader<<
GCM was previously trading on the VSE and only moved to the TSE on Nov/97 so there is relatively little data from its chart. I'm not sure what the old symbol is on the VSE and whether by combining the two charts, there could be more TA information available. I've drop them an email requesting for an investor's package, and I'll send them another to find out the old symbol.
3 things interest me so far to GCM: (1) their over 35% sales growth for last 3 years, (2) the association with Teck and (3) the stock price is around $1, which is the option exercisable point granted to the insiders (see their Mar 31/97 audited annual report). I'll get to know more when I receive the investor's package. I've asked them to send me any analysts reports that they have.
TTYL,
Denise |
