BC Business
Up 20 percent so far this year, penny stock MineHub just forged an important strategic alliance
The stock: As industries go, the mining and commodities sector can be somewhat averse to change. That makes this corner of the economy fertile ground for digitization, which was the thinking behind the founding of Vancouver-based MineHub Technologies (TSXV:MHUB) in 2018. Since then, the supply-chain disruptions that triggered the global inflation surge in the wake of the COVID-19 pandemic further underlined the need for better operational and market intelligence of a kind that MineHub’s software platform promises.
The drivers: On Monday (November 18), MineHub announced a deepened partnership with Abaxx Technologies (NEO:ABXX), which indirectly owns a commodity market operator and clearing house in Singapore. Under the deal, Abaxx is paying just over $3 million (35 cents a share) to increase its stake in MineHub to 20 percent from 10.8 percent. The companies will also integrate some of their digital tools.
The partnership opens the door to applying MineHub’s software to a range of materials beyond the copper and aluminum it mostly helps move today. The company sees itself not only greasing the supply chain but also helping commodity market players prevent fraud, secure data and comply with trade law, international sanctions and environmental, social and governance (ESG) commitments. MineHub’s platform is already used by large commodity producers, traders and financiers including Sumitomo Corp., BHP, Codelco and Southwire.
The company is still a long way from profitability, however. (And its revenue model, linked to bulk trade volumes, will take a long time to ramp up.) In the three months to July 31, it posted a $1.5-million loss on revenues of $455,566. Its shares closed at 32 cents on Tuesday (November 19) on the TSX Venture exchange, up 20 percent year to date.
Word on the street: “With a growing, global footprint, MHUB is an early mover in a mining industry ripe for digitization and, despite its early days, has secured notable contracts with Tier 1 [clients]. The partnership with Abaxx may broaden its total addressable market and potentially alleviates near-term balance-sheet risk,” Haywood Capital Markets analyst Gianluca Tucci wrote in an “uncovered radar flash” on November 18.
Coming and going: While others in the cryptocurrency universe were still celebrating the election of Donald Trump as U.S. president on November 7, Dean Skurka, CEO of Vancouver-based WonderFi Technologies(TSX:WNDR), was reportedly abducted in Toronto and briefly held for ransom before being found unharmed 23 kilometres away in Etobicoke, Ont.