Got this email recently from Gemcom's IR:
Hi Brad,
Thank you for replying to my email. Sorry it took so long to get back to you, but I did not check the private emails on SI. I have noted your concern below and will try and give you a few reasons why we think there is potential for big return especially at current prices.
"My problem with Gemcom is that I can't see how a big return can come out of it, especially with the junior mining sector in the mess it is now. Does the software branch out into other industries?"
A more detailed report is below, but in a nutshell, GCM is the world leader in an industry that is starving for Information Technology that is compatible and targeted towards all mining companies engaged in all aspects of mining from exploration to production. GCM is striving to be to the mining industry what "Halliburton" and "Schlumberger" are to the oil & gas industry. Even though the junior mining sector has been a mess GCM has been able to grow. Their revenue from exploration software decreased by 40%, but their overall revenues increased by 27% last year. When the junior market turns around, this will make a major impact on the growth of GCM as their overall growth continues to grow despite the subdued junior market. The deal with DeBeers announced in December 1998 proves the effectiveness of GCM's new IRAMS product and the desire of the multinationals to align themselves wit GCM. Besides DeBeers's Venetia mine, they also have seven or eight other mines and GCM expects to receive orders from other large mining companies once the product is complete.
I hope this helps a bit. If yo have any other questions, just let me know. I have also added you to the email list. You may also get a little info on IGT:VSE (IGT Pharma Inc.) as we are following that company aswell.____________________________________________________________________________
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GEMCOM SOFTWARE INTERNATIONAL INC. (GCM:TSE)ANTICIPATES STRONG CALENDAR 1999
· 100% increase in revenue expected by calendar yearend 1999 through:
- strategic acquisitions;
- new product offerings; and
- recovery in commodity markets
Established Software Company - Leading global supplier of mineral exploration and mine design software. Gemcom has significant market share in many geographic territories around the world. Over 800 customers in 70+ countries. Current sales of approximately $6.5 million per annum.
Exploring for minerals and constructing mines are multi-million dollar
corporate endeavours. According to 1996 figures, the mining production industry generated
over $100 billion in revenues. Like other industries, the role of information technology in mineral exploration and mining is to gather, integrate, process and analyze data to make better decisions. Well-implemented information systems and software tools help mining companies decrease development time and significantly reduce extraction costs. Currently, it is estimated that only 1% - 2% of revenue in this $100 billion industry is spent on information technology. Company spending on information technology is expected to grow
25% a year over the next 3 to 5 years.
Unlike the petroleum industry, the mining industry does not have large, fully-integrated service companies like Schlumberger and Halliburton, which dominate information technology in the industry. Indeed, the use of information technology in the mining industry is fragmented and in many cases still embryonic - perhaps where the petroleum business was 10 years ago. On the demand side, faster microcomputers at cheaper prices are allowing small mining
companies to compete with the same information processing capabilities as large multinationals. Gemcom's goal is to meet ALL of the information technology requirements of its customers - from initial exploration to mine management - on an open Windows platform.
Growth in mineral exploration, the fragmented nature of the mining
information business, and a growing computing infrastructure spells opportunity. Gemcom, a software company operating for 13 years with a history of profitability, has an opportunity to become the dominant supplier of information technology in the global mining industry.
Gemcom's Opportunities and Strategy
Industry growth - Piggybacking on the 25% growth rate in the application of information technology to global mineral exploration and extraction;
Consolidation and Integration - Consolidating the industry sector by
acquiring competitors and integration by acquiring other complementary information technology companies;
New Products - Exploiting new technologies and developing software products that dramatically expand Gemcom's functional presence in the information technology industry. i.e.: Gemcom's recent agreement with De Beers Consolidated Mines to build an integrated mineral resource asset management system (IRAMS) for its flagship mine, the Venetia Mine, in South Africa. The Venetia Mine Project is expected to generate $1.5 million in revenue for Gemcom over the next 2 years. Gemcom expects to receive subsequent orders for additional mines
operated by De Beers and other international mining companies. Gemcom is currently investing approximately $150,000 per month from internally generated revenue on research and development.
Gemcom is well-positioned relative to its four principal competitors and is the recognized industry leader in technology. Customer satisfaction is high and the Company has accumulated the talent to deliver increasingly innovative products to the marketplace. The introduction of new products into untapped sectors of the information technology field will further establish Gemcom as a leader in its industry. Further, Gemcom is the only publicly traded company among its four principal competitors, allowing it faster access to equity capital if required.
For more information, please contact Tandem Capital at 800-370-4412 Cdn, 800-831-2956 US or 604-681-7210 direct. You can also email us at info@tandemcap.com or visit the Gemcom web page at <http://www.gemcom.bc.ca/>http://www.gemcom.bc.ca.
Regards,
Tandem Capital Group Inc.
____________________________________________________________________________
Doug McFaul - Tandem Capital Group dmcfaul@tandemcap.com
Tandem Capital Web Page tandemcap.com
For info contact: 604-681-7210 800-831-2956 US or 800-370-4412 Cdn |
