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Letter from the Editor
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t the Canadian Securities Exchange, we occupy an unusually privileged vantage point on innovation. Not only do we get to witness firsthand the various paths that entrepreneurs of all stripes take to climb the mountain of success, we also engage with these entrepreneurs on a regular basis to hear about their pursuits and have the opportunity to share these stories with the broader public through a growing number of digital channels, including Public Entrepreneur magazine. As we find ourselves once again on the cusp of the Extraordinary Future conference in Vancouver, this edition of Public Entrepreneur, like this year’s conference, demonstrates the diversity of ways in which innovation and technology can shape the fortunes of growing companies, industries and even economies. Blockchain, for example, dominated the headlines for the better part of the past year. In that time, it has created a tsunami of economic activity and, in turn, accelerated its own innovation as wider adoption has spurred on further innovation. JAMES BLACK Perspectives in this issue from thought leaders at Northstar Venture Technologies, Editor-in-Chief Venzee Technologies and BIG Blockchain Intelligence Group (CSE:BIGG) underPublic Entrepreneur score how quickly the landscape is evolving and the opportunity for entrepreneurial firms to outcompete larger names operating in the space. Of course, powering this new technology has created all kinds of demands on electrical infrastructure that previously did not exist. Entrepreneurs across the supply chain of electricity generation, several of which are profiled in this issue, fundamentally believe that the need for everything from base metals to sophisticated power management systems, will only continue to generate opportunities for future growth. Pure play technology stories aren’t the only genesis of rapid technological innovation, however. Rapidly growing industries, such as the cannabis sector, have demonstrated that technology can help fan the flames of growth by introducing efficiencies into processes, analysis, distribution models and more. CSE-listed Cannvas MedTech (CSE:MTEC), for example, is looking to fuse cannabis and information technology to become the “Google of cannabis data.” As any “overnight success”story will attest to, there is often a long journey of hard work, missteps, learning and evolution that precede that first major hit. And while many people don’t see the work that goes into producing these hits, this journey is something that entrepreneurs are intimately familiar with. What keeps entrepreneurs and visionaries going in the face of long odds, a multitude of challenges and a long line of skeptics? Read on in this innovation issue of Public Entrepreneur to find out.
James Black Editor-in-Chief Public Entrepreneur
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By Katie Lewis
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lockchain is an ingenious invention. That much is clear. It’s distributed. Permissioned. Immutable. It has the potential to be one of the most disruptive forces in business in decades. Momentum is strong and changes are moving at a rapid pace. But how can blockchain actually be used in the future? Who is moving the space forward? Will the promise of it all be delivered? Public Entrepreneur spoke to three executives who are leaders in pushing the space forward.
Tell me a bit about your background. How did you get involved in this sector? SA: I am Executive Chairman of Blockchain Intelligence Group having gotten my start with mining cryptocurrency in 2012. Since that time, we’ve done a number of things in the bitcoin space: industrial bitcoin mining (for clients), and built out cryptocurrency technologies and bitcoin mining pool software. At the tail end of 2014, we started work on leveraging our knowledge of search/analytics as it applies to bitcoin. In 2015, we formulated our company, which focuses on cryptocurrency-agnostic search and analytics solutions. DS: I’ve been involved in the space since 2014, starting with working with friends doing mining out of a garage, and looking at models like a crypto-funded blockchain accelerator, and enabling rent payments with cryptocurrencies. It was quite early and we realized that the market was not quite there yet. I got heavily involved in working with data systems and integration, focusing on enterprise applications in things like health care. In 2017, BlockTech Ventures, now Northstar, was formally established to focus on the development, integration and commercialization of the core technology into existing markets. KH: I’m a self-taught software engineer. I started coding many years ago and
I’ve always had a fascination with technology. As bitcoin started to come into play in 2011/2012, that’s where it became very interesting. Probably about five years ago is when I understood the impact of what blockchain was really going to look like. For Venzee, we started looking at this in 2016. We focused more on what was the threat or the opportunity to our business and we realized quickly that our software was positioned perfectly.
What is blockchain and why is it important to the future? KH: At Venzee, we see blockchain as networks that are just a different type of database in our world. For me, blockchain isn’t actually new, it’s based on an architecture that’s been around for many, many years. It’s great to see it now being applied in a way that’s safer for accountability and transparency. SA: We’re really focused on cryptocurrencies, in our case bitcoin, which we
call the public blockchain. So, we don’t say: what is blockchain? We say: what is bitcoin? It’s a new trust layer of the Internet itself which you can think of as layer 8 to the 7-layer OSI stack. This is the missing component to the Internet that has not been available since its inception 30 years ago. Bitcoin is blockchain, blockchain is bitcoin. The two are connected in ways you cannot separate.
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DS: It’s a core foundational technology,
like the Internet, that holds all data in an open ledger that cannot be altered and allows for frictionless peer-to-peer transactions of value, replacing the costs and intermediaries that are commonplace in business and finance. It’s important because of what it can enable, but it takes time for technology to be understood and then adopted. In the future, without knowing it, you and the businesses and platforms you use on a daily basis will be functioning with this technology in one form or another.
How is the market for blockchain solutions doing? IBM has a big unit and there are lots of smaller companies with various solutions. DS: The market for blockchain solutions
is immense and global and is the key area of focus for Northstar. The reason is, industry knows the technology holds immense value. The challenge is in identifying the opportunities, then being able to build, test and integrate the new technology into existing systems. Commonly, companies are engaging with Ethereum, IBM’s blockchain protocol, or Hyperledger (Linux Foundation). If you look at who is engaging with the technology in a meaningful way, from the Fortune 500 level it’s easier to create a short list of the companies not engaging with it than to describe who is. This is increasing at an incredible pace. SA: It’s still early. IBM is one company leading the charge. I don’t think we’ve quite seen who has the mantel yet, but I do believe the open-source movement will lead it.
In your view, what will the market respond to in the next year?
compliance issues. When you look at the amount of money these cryptocurrency exchanges are making, it’s a given. Companies have to play in this field or they will lose their edge. That fact is clear. KH: At Venzee, we work with a range of clients, from huge retailers (Walmart, New Balance) on down. We’re having a lot of conversations about how blockchain is definitely of interest on an enterprise level. The industry is really starting to think about it—not necessarily implementing it—but they are finding that they are going to have a strategy or a use for this within the next three to five years.
ing into the pure cryptocurrency market. Companies like ours will help them get through the anti-money-laundering 10 | PUBLICENTREPRENEUR • Issue 3
I know I’ve missed something. What have I missed? What are you excited about? KH: In terms of Canada, I think it’s great
DS: In the next year, we will see contin-
ued adoption, understanding, and the market generally understand more about the technology and what it means for industry. Less hype and initial euphoria, and more examples and use cases we can refer to. The technology itself will continue to advance, as it needs to, and we’ll see things like regulation that will come in and really bolster new innovation and capital markets participation in a whole new way.
to see the CSE moving up and paying attention to blockchain. Canada has the potential to really be a leader in the space. I was talking to someone recently that out of the 15 known cryptocurrency billionaires in the world, five of them are Canadian. That’s incredible. A lot of that innovation is coming out of Canada and we’ve got an opportunity here as a country to grab onto this industry and move it forward. DS: We’re excited for a number of things.
The industry went through a profile and funding frenzy in the latter part of 2017 but has since gone relatively quiet. What takes us out of the quiet period? DS: Further to what I just mentioned; reality, regulation, understanding and a simple precedent for what the technology is doing in the real world. All new technology has this initial “innovation trigger” followed by speculation, and a pullback. That’s where we are, and what was needed. Now we’re in a very exciting time where the tree has been shaken, and the market is in a place to allow for sustainable and pragmatic growth based on more factors than speculation. SA: Technology is taking a bit of time,
SA: I think you’ll see more majors mov-
something that’s never been done before it will take you three times as long and three times the cost. People don’t understand the mechanics of how everything is being built. From a fundamental standpoint, a lot will change and certainly, from a market standpoint, more money is going to come in, but regardless, the technology and the network is growing and people will continue to latch onto it.
which makes sense, particularly when you’re dealing with cutting-edge technology. There’s only value in solving difficult issues. If you’re looking to do
We’re excited to see this technology continue to evolve and advance, making its way into the businesses and platforms we all use. We’re excited to see baseless ICOs (Initial Coin Offerings) disappear into memory. For regulation, which will open up this new asset class, namely security tokens (real equity, real assets) to the capital markets in a way never before done. To continue building real solutions for industry, helping advance the sector at large. SA: Investors want to be able to draw the line between “what’s this technology”to actual real-world use cases. The CSE has been doing a ton of work on this and I think investors are going to be able to wrap their heads around this soon. That’s starting to come. The foundations are being laid. So, what will the next era bring? It creates an incredible opportunity for investors and for entrepreneurs as the new era marches forward.
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echnology is changing the lives of every living thing on our planet and at a speed difficult to grasp. Then there is the question of direction—where is the tech world taking us, and to what end? To begin understanding these issues, it helps to have insight from someone who lives and breathes technology, but at the same time is not so consumed by it that they lose touch with everyday realities. Someone driven by the outcome of their efforts for human beings, rather than the pursuit of technology for its own sake. Shafin Diamond Tejani, CEO of Victory Square Technologies (CSE:VST), is firmly in the former group. With a vision for his company built around clear opinions on future trends, he speaks sincerely about both increasing shareholder value and the positive influence he and his team can have on local communities…and those not so local. At the end of the day, Tejani believes the benefits are there for all of us to share. Public Entrepreneur visited Victory Square headquarters in Vancouver recently for an in-depth discussion of Tejani’s philosophies and thoughts on where technology is headed. Investors and entrepreneurs alike could learn much from one of the city’s leading lights in technology investing and helping entrepreneurs realize their business and personal goals. Victory Square invests in companies that are shaping the future, and that means you have some precise views on where technology, and the world in general, is going. Can you share that outlook with us? What are you focused on and what do you see for the future that some people might not? Human nature is very predictable, and history is very cyclical. If you look at the past few decades you see very clear patterns. Our focus recently has been on new emerging technologies, which are disrupting established technology and creating completely new industries. We are seeing things like decentralization, artificial intelligence, Internet of Things, and virtual and augmented reality being the next big movements. I started my first company during the early dotcom boom of the mid-1990s. The Internet and the Web democratized access to information and connected people from all over the world. We have seen that impact every walk of our lives on a global scale, and it accelerated further with the explosion of mobile phones and smartphones. We can now say that humankind is almost entirely connected. Humans generally want to do the same things. On the Internet they want to access information, purchase things, play games and watch movies. They also use social media to connect and communicate with one another.
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But for the last 25 years, most of these activities have taken place on centralized servers. Facebook allows you and I to communicate but it’s a centralized platform. We input the information, but they own that input, and they monetize it to third-party advertisers without us getting a cut of the money. The impact of global platforms like Google, Twitter, and Facebook leads to problems ranging from the threat of government-ordered censorship to more subtle, algorithmic biases in the curation of material that users consume. These platforms which host and inform our connected public perspectives are unelected, unaccountable, and often difficult to oversee or audit. We are now living through a new movement to create technologies and services to address these issues. Decentralized technologies that are open source, enabling peer-to-peer interactions in lieu of mediated centralized platforms are the remedy to our current global landscape. In a centralized system, everything is kept in the same place and can be hacked. In a decentralized network there may still be a Facebook that can create the network, but we all own our own information and we all participate and benefit from how successful that network becomes. People will want to do the same things, but the underlying architecture is going to be different. From an innovation standpoint,Victory Square focuses on things we know. We like verticals that are commercial and virtually recession-proof. Sports betting is a good example. Let’s vector in a little closer. How do you choose companies to invest in based on your broader view for the future of the world? Given that we begin by focusing on verticals we know well, the next thing we do is identify a large customer with a pain point. Then we look at some 80 accelerators we have relationships with around the world to see what problems talented people are trying to solve. We can bring teams to Canada to evaluate them if they are overseas. The evaluation will take place over anywhere from three to six months, and by bringing entrepreneurs to Canada there are a number of programs we can take advantage of that help to mitigate our risk. We focus on verticals that we have a strong track record and experience in, identify a large customer in that vertical, look wide globally to find the best talent, bring it to Canada to give it all of the advantages of being based in Canada, and then we are able to evaluate the tech and the team as they validate with that large customer we have brought them to. Tech has been commoditized, so it’s your ability to have
VST PORTFOLIO FOCUS: ASPEN TECHNOLOGIES an operator who can execute efficiently. Execution becomes the real key. We look for strong teams and leaders who have built a product that customers are willing to pay for. And given that commoditization, you need differentiating factors—someone who can speak well and articulate what they are really doing, and then there is that work ethic and hustle that we also look for in an operator. Give us an example of an investment and the impact it stands to have on the future. There are 19 companies in our portfolio doing exceptional things. One of those is FansUnite, which was founded by an accountant and a lawyer who are very passionate about sports betting. We acquired the company about 18 months ago for $2 million, worked with them to build a unique product, and they just oversubscribed a financing of $4.45 million at a pre-money valuation of $13 million. FansUnite is aiming to go public in early 2019. In the sports betting industry, all bettors are generally betting against the house.You are trusting the house to manage the lines appropriately, trusting them to put the player funds in escrow, and then to pay you out accordingly when the time comes. Paying exorbitant fees and trusting a centralized third party with your funds was what led to FansUnite incorporating blockchain into their business. A main pain point is that the house is using a third party to process payments, which means they must charge a fee, and it can be as high as 10%. That means if you bet $100, only $90 is actually going into the pool, so you have to win 54% of the time just to break even. They realized that decentralization and blockchain could address this and built their own protocol and currency. FansUnite will become one of the first companies to build the infrastructure that allows any operator to build a blockchain based sports betting application on the protocol. FansUnite is building the first decentralized application which will be a low-margin sportsbook, taking the fees per bet down to an industry low 1% margin for the book. There are many other efficiency benefits as FansUnite aims to change the landscape of the sports betting industry. Your company materials suggest giving back to the community is important to Victory Square. How does investing in things that make the world a better place fit into the structure of a capitalist enterprise? My family is from East Africa, and in the early 1970s there was a military coup and we ended up in Can-
PETER
SMYRNIOTIS Tell us about Peter Smyrniotis and what Aspen Technologies does. I’m Aspen’s CEO. Aspen is a comprehensive blockchain financial platform that provides transactional cryptocurrency services through the exchange we’re launching in the next two months. We also have a complete ICO/TGE (Initial Coin Offering/Token Generation Event) build and advisory services business. Our mandate for consumers is to provide best in class user experiences and customer success while they trade on our platform. Further, our mandate extends to provide a white-glove suite of TGE services for companies working in blockchain and pursuing crypto-financing. At Aspen, we recognize that centralized databases are 5,000 years old. Switching an entire planet to decentralized databases has been volatile thus far—blockchain is essentially the second generation of the Internet. The titans of technology today have come to control everything by persistence and execution and acquiring other ventures. Aspen enables individuals and teams to springboard into the blockchain and decentralized future where the management of their affairs and assets is in their control. Our exchange technology removes complexity from finance for individuals. And our business services enable companies to access, build and fund their next generation technologies and services through blockchain-enabled options. How is your company shaping the future, both in your industry and in ways such that the average person sees a difference in their daily lives? I’ve had the privilege of working with the CSE and speaking with them about their Security Token Offerings (STOs) and initiatives to enable brokers to drive a crypto solution directly to its client base. STOs are the extension of blockchain to the visibility of all assets. They are like any other technology—there is a progression. At Aspen, when we interact with clients we showcase what STOs are, what value they can add and if it is the right investment tool for them. We can help a corporate client curate a solution. Acting as a dedicated advisor who understands what the technology does for the marketplace, what its global impact is, and helping clients understand how to tell that narrative to raise capital through an ICO or STO, is one way we make an important difference. Tell us something about the way technology is shaping the future that most people do not see today. The 800 pound gorilla in innovation is artificial intelligence. Decentralized technologies like blockchain are ideal for empowering and enabling artificial intelligence. Decentralization is the new software fabric that is transforming the world. Whole new technologies and sciences are going to be built on this layer.
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VST PORTFOLIO FOCUS: FANSUNITE
DARIUS
EGHDAMI Tell us about Darius Eghdami and what FansUnite does. I’m a chartered accountant by trade, and I’ve been in the tech space for nearly a decade now. I worked at KMPG for three years and left to start FansUnite in 2014. It has been an amazing journey that has taken me around the world and to the association with Victory Square. FansUnite is creating a protocol that allows anyone to build a blockchain-based sports book on top of our infrastructure. The first application built on the protocol will be the FansUnite Sportsbook. On our Sportsbook, the FansUnite token is the only form of currency you can wager. However, other operators that build can either use the FansUnite token, they can accept any token adhering to the ERC-20 standard, or they can create their own token as the currency for their platform. How is your company shaping the future, both in your industry and in ways such that the average person sees a difference in their daily lives? People have been betting on sports for years, and I have seen estimates that over a trillion dollars is wagered on sports annually—it is astronomical. Conventional activity involves betting with centralized parties who give you the odds, you make your bet, and then they resolve your wager and pay you accordingly. What we are trying to do is decentralize sports betting and take out the resolution and payback of events by centralized parties and put those into smart contracts and have them automatically resolve based on consensus algorithms in our protocol. There will definitely be friction getting people from betting with fiat currencies to betting with cryptocurrencies, but we think the advantages of transparency, security and better odds will get them to convert. As for the wider impact, one of the things we are trying to accomplish is to decentralize data. Once a score consensus gets posted, every smart contract across the FansUnite Protocol gets resolved. We reward contributors of score data with tokens, and if we can decentralize data and put money back in the hands of fans, then that could really change the landscape of the sports data industry. Tell us something about the way technology is shaping the future that most people do not see today. Shafin always says that technology is becoming commoditized, and I completely agree. You can build something, but it is all about execution. The people you surround yourself with and a team’s ability to execute on those ideas is paramount. Blockchain is a new space and sometimes you don’t know what you don’t know, but the amount of innovation coming out of this industry is spectacular. There are smart people entering the blockchain space because of the money pouring into it, and we are going to see some great technology roll out in the next 12 to 18 months.
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ada. We basically won the lottery by landing in Canada, where we had access to good education, stable government, safety and security. The advantage we had in Canada and the thankfulness is tied into a responsibility I have always felt, and it has trickled down to our portfolio companies in the form of something we call TKM: Time, Knowledge and Money. There are some in our team who might not have financial resources to give, but they have time and knowledge. A graphic designer might donate design services to a philanthropic organization in need of that skill. Lawyers or accountants can provide legal advice or business planning for charities. Our focus at Victory Square is on vulnerable children and making sure they have the basics, which means access to nutritious food, education, safe environments, love and support. We found that not only do we have the time and capacity to do it as a capitalist enterprise, but if often benefits us because it aligns us with the interests of other socially minded entrepreneurs. There is no negative impact—it is only positive. There is no typical day for you, but how about a typical week or month? Give us a look inside the world of a manager at the top of an investment organization. What are your biggest challenges and how do you keep on top of all the moving parts? I am fortunate to have an amazing team and we divide and conquer. If we take September as an example, we are hosting a conference in London called the World Blockchain Forum, where investors, thought leaders and emerging tech companies from all over the world will be gathering, including some of our own. We’ll be connecting with investors and accessing deal flow in the UK. Right after that we head to Asia, where we have some portfolio companies. We will be stopping in China, Hong Kong, South Korea, Japan, and then we end in Singapore. Thankfully, Asia is a day ahead because we come straight back to Vancouver for conferences, one of which is Cambridge House’s Extraordinary Future, which we sponsor and are actively involved in, and then the AR/VR Global Summit. At the end of September, we are in Malta for the Malta Blockchain Summit. Portfolio companies are global, events we host and speak at are global, our talent pool and investors are global, so we are spread out. And along-
VST PORFOLIO FOCUS: CAPACITI side all of that, we are managing our portfolio companies and day to day responsibilities, so we have to ensure we have a really organized team, but also a really deep and hard-working team so we can successfully execute on everything. And there are also lots of activities we run on the philanthropic side—educational programs, food drives, golf tournaments, galas and other events. That initiative is important to us and we have a team that makes sure we devote appropriate time. Victory Square must have a shareholder group a little different than that of the average public company. Can you discuss the type of investor that backs you? We attract a wide variety because we are in many different verticals. We have exposure to artificial intelligence and machine learning, to VR/AR and blockchain, as well as mobile games and film. They fall into three categories: institutional investors who have a longer vision, retail investors who don’t fully understand the sector but want exposure, and then there is a big group of investors who support our portfolio companies from the global crypto community. Given that tech is borderless, we are seeing investor interest from all over the world. If you could convey just one lesson to a talented, budding entrepreneur, what would you tell them? There are lots of things I think are key, but forced to make a shortlist, I’d offer an analogy. If we needed to go to Florida we could get in a car and start driving, but we might not have enough food or money or gas. We might eventually make it to Florida, but it would not be the most efficient way. A well considered plan is one of the biggest things.You need a roadmap for where you want to go. But you also have to realize that the direction you initially started out on might not work, so you have to be flexible and adjust. The entrepreneurial journey does not always look like a hockey-stick curve. It can be very volatile, and having that plan enables you to be better prepared to face the challenges and difficult periods and be persistent and determined to get past it, rather than become frazzled and quitting early. You also need the right attributes, such as strong work ethic, leadership skills, passion and determination. If you put enough smart people together with a good idea or opportunity, you are going to figure it out.
MARC
LOW Tell us about Marc Low and what Capaciti does. I’m CEO of Capaciti and I have been working in technology and management consulting for over 15 years. Previous to Capaciti, I built Deloitte Pixel, which is Deloitte Consulting Innovation’s global talent crowdsourcing platform. Capaciti is a blockchain-powered professional services platform that connects enterprises with skilled technology teams they can trust. We are curating a network of technology vendors and using a blockchain system to underpin their reputation, which gives the client certainty that the vendors they are contracting with are who they say they are and that they have the pedigree to do the work— with a smart contract system to guarantee delivery. How is your company shaping the future, both in your industry and in ways such that the average person sees a difference in their daily lives? The nature of what “work” means is changing. We are past the period of a 50 year career at one company and a gold watch when you retire. Now, people have not only multiple jobs, but often multiple careers. And what we are very quickly moving toward is where talent is sourced more in an on-demand way—Talentas-a-Service. From the industry perspective, the biggest change we are trying to achieve is to create a seamless mechanism that sits in the background and makes it easy to connect with great vendors to get work done. It means that the buyer gets an opportunity to work with someone whom they otherwise could never have access to, and vice versa. For the average person on the street, we are trying to take this ethereal thing called blockchain and drive a proper enterprise use case that makes “work” work better. It’s like when you turn on a light switch and the light comes on but you don’t have to understand how electricity works. Blockchain is this incredibly powerful technology but an abstract concept. We want to use it to make working lives better. Tell us something about the way technology is shaping the future that most people do not see today. We are going through a period now in which technology is dehumanizing us. We are attached to our screens and technology is encroaching more and more on our everyday lives. I think we are about to enter a period that will facilitate a whole different way of interacting that will make interactions more real and more trusted. Blockchain is a part of that story. It is flattening the world and making it easier for people to connect. It is driving not only interesting business use cases, but also applications for technology on a personal level.
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EXPLORING OPPORTUNITIES IN BATTERY METALS: COPPER By Katie Lewis
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harp. Focused. Radical. Three words that describe Gianni Kovacevic. He’s also passionate about the energy industry in a way that is unparalleled. In 2016, he published My Electrician Drives a Porsche? and drove across the U.S. to promote it on the world’s first zero-emission book tour. Public Entrepreneur recently sat down with him to chat about the energy industry and his latest venture, CopperBank Resources Corp., a company that is engaged in the acquisition and development of mineral properties. Who is Gianni Kovacevic and what drives you to be so passionate about the energy industry? I’m an investor. Within that, I’m a curious investor, and I want to look at investing in the future and all that it entails. I’ve been captivated by the energy space. Effectively, I look at it like technology now. It’s moving forward at a faster pace than most people will appreciate and recognize. I’m Croatian. My brother and I have been fascinated by the scientist Nikola Tesla, a Serbian born in Croatia, who invented the modern way in which we create and transfer electricity. That spawned our studies—we both went to BCIT and took electrical studies and I’ve followed it like a Harlequin Romance ever since. What it taught us was that fairytales at the time are now becoming commercially viable when it comes to the electrification of transportation, solar power, wind power and the integration of that. It will be led by the consumer, in my opinion. What is the future of batteries, and related to that, and how does that shape the future for companies in the battery metals sub-sector? When it comes to understanding energy, there are three silos: 1. The generation, or creation, of energy, so the creation of electrical energy. 2. The movement of energy. There are three ways to move energy from point A to point B, you can do it with a pipeline, with a ship or a railroad or you can do it with electrical cables. 3. The utilization of energy and that’s where we can look at batteries. The lithium-ion battery has gotten a lot of press. It’s good for devices, tools, transportation. When you get to the larger, commercial-scale batteries, you’re talking about vanadium-redox or iron-salt batteries. They’re huge—the size of a building—with very simple and abundant ingredients. So what’s the glue of every system I just went through? Copper. Electricity demands copper. You are executive chairman of CopperBank. Tell us about that company and what excites you about its future. CopperBank is a unique company. It’s a company built by investors, for investors. We appreciate that the future of energy will be copper. We look at investing in junior mining as the highest of high-risk industries. Our strategy is to acquire projects that have had a significant amount of capital already invested. When the copper price is low, they are un-economic, when the copper price rises, there’s optionality. Our portfolio has growth, optionality and development potential. We can enhance the value—even in a lower-priced copper environment—to offer investors not just the optionality play, but also accretive growth. We specifically like copper because as a commodity, it will have strong CAGR demand growth. Unlike the oil and gas industry, copper mining has a window where in the next three to four years we have no major copper mines coming online. That’s big news. You label yourself a realistic environmentalist. What does that mean? It’s recognizing that about two billion people in the world don’t live like we do. Eventually, they will have access to running water and electricity. There’s nothing that can prevent that. It’s how we do it in the most proactive way possible. All of these things will be led by the consumer. As much as you want to adjust or pivot the behaviour of people, you can’t do this.
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EXPLORING OPPORTUNITIES IN BATTERY METALS: COPPER
they have developed in a very short time. Royal Dutch Shell by comparison, is a $300 billion company that sells 6 million barrels of oil every day through their 44,000 forecourts. Shell is an energy distribution business and good part of their market cap is attributed to selling transportation fuels. That is no longer a growth business.
What impact will technology have on emerging markets, and particularly on commodities in emerging markets? You have to look at the per capita usage of commodities. We currently have 7.5 billion people in the world and we’re probably going to climb to about 9 billion. As these developing nations become more developed, the trend is (and we’ve seen this many times) that birth rates fall. So eventually we will go into decline, but that’s an issue for 2050 and beyond. When you look at the per capita consumption of commodities in the next 10, 20, 30 years that’s where I think—as an investor—there are going to be winners and there are going to be losers. As we pivot to a low-carbon society, things like thermal coal and crude oil will no longer be growth businesses. We’ll see other commodities become the blue ribbon champions—things like copper because it will continue to grow. We will pivot. That amplitude will increase. What commodity investment opportunities can you not ignore today? What Tesla has done with its supercharger network. Effectively, they have disrupted the entire incumbent energy system. You can now drive an electric car anywhere in the developed world, due to their super charger network, and it only took Tesla about three years to achieve that. Think of the gravity of what
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What have I missed? What else should we have talked about? The consumer. The consumer will eventually guide the way. The gentrification, urbanization and behaviour of the millennial generation is profoundly different than the generations before. Where is the largest millennial population in the world? It’s in China. There are 415 million millennials and over 100 million have graduated from university. Those educated, urban Chinese want no part of factory jobs anymore. The European/American millennial is saying they don’t want to live in the suburbs of cities anymore. They are more than happy to live in the gentrified area of Kansas City in a condo, and they don’t have a car nor do they want one—they don’t even have a drivers licence, so they are never going to be the customer of Big Auto or Big Oil. So if one aggregates any 100 of these people. Many don’t have a drivers licence, and if they do it’s for something like a car sharing service like Car2Go. They don’t want ownership, they want access. Or, they will use a service like Uber. So how does this reverberate into what we’re talking about? If we aggregate 30 or 40 of these young people, they require one car, car-sharing, or an uber driver. When you look at the consumer, guess what? They all used to buy a car. No longer. These types of consumers, that count in the hundreds of millions, are never going to be the future customer of VW, GM or Toyota. If the Big 3 automakers each sell around 10 million cars a year, I will suggest to you that in the future, their car sales will stop climbing. And I believe car sales in general will actually start to fall. Additionally, a good portion of those cars become more fuel efficient and for professional drivers increasingly so they will buy electric. It’s all about cost, not price—the total cost of ownership, not to mention the governmental pressures that are forcing industry to provide zero emission transportation. We’ll see technology companies getting in the game: Tesla, Apple, Dyson, you name it. There’s a cool factor, green factor, price factor. It’s going to disrupt the whole business model. It’s all been turned on its head. And then you look at one other thing. I also think it’s always important to think about the Ernest Hemingway quote when you think about car companies: “How’d you go bankrupt? Two ways. Gradually, then suddenly.”
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By Lenore Fedow
CELLCUBE ENERGY STORAGE SYSTEMS Smoothing the path between renewable energy and its end-user
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EXPLORING OPPORTUNITIES IN BATTERY METALS: VANADIUM
T
he path toward clean energy has proved to be a bumpy one. Misconceptions about the viability and reliability of renewable energy sources have sometimes hindered progress. CellCube Energy Storage Systems Inc. (CSE:CUBE; OTCQB:CECBF; Frankfurt:01X) has heard all the questions and concerns. How does solar power work when the sun goes down? How do you utilize wind power on a not-so-breezy day? The company has found that the missing link between clean, renewable energy and intermittency is in energy storage. Despite the confusion about just how clean energy works, CellCube Chief Executive Officer Mike Neylan believes that a societal transition from fossil fuels to cleaner or renewable sources is well underway. “The fundamental need for large-scale energy storage is driven by the increased integration of renewable energy into the electricity grid,”says Neylan. Neylan, with over 20 years of corporate experience under his belt, has a blend of energy know-how and the financial experience to back it up. Formerly, he was a private equity portfolio manager with alternative investment manager Sprott Inc. and oversaw an investment fund focused on physical power trading when he was the chief operating officer of Aquilon Power Corp. Renewable energy generation has been increasing, spurred on by the rapid growth in solar and wind power generation, according to a study by the International Renewable Energy Agency. Solar power generation has increased by 31% compared with 2015 while wind power generation is up by 16%, as per the study. A total of US$19 billion worth of public investment was put into renewables in 2016. According to Bloomberg New Energy Finance research, storage markets are estimated to reach 40GW by 2030 and are expected to spend over $100 billion in the ramp-up phase over the same period. “Climate change is driving decarbonization and the increase of renewable sources powering the electricity grid,” says Neylan.“Consumers are looking for cleaner sources of energy with the same duration and reliability that they’re accustomed to having. Clean energy sources backed up by a long duration energy storage system fit the bill.” Most commodities have always been able to be stored, like water in a reservoir or grain in a silo. Until relatively recently, there was little technical capacity for storing grid-scale electricity except through pumped hydro projects—which are expensive and have geographical constraints. Production would have to always meet demand to avoid waste and ensure a reliable and balanced grid. CellCube stores energy by way of a vanadium redox flow battery, a brainchild of NASA in the 1970s. Named after Vanadis, the Norse goddess of beauty, vanadium is a silvery, ductile metal known for its brilliant colors and for making steel stronger. Vanadium salts are non-flammable and non-explosive, increasing safety and battery life. CellCube’s vanadium redox flow batteries provide 100% useable energy without impacting product life—there is no capacity degradation. The energy storage system comes as a containerized solution with scalable multi-unit modules that can provide grid-scale rated power and between four to eight hours of energy storage. A battery’s cycle starts when the battery is fully charged and ends once it has been discharged, or all the stored energy has been used up, and then it’s recharged again. Unlike other technologies on the market, CellCube’s energy storage system doesn’t suffer from cycling dependency and has a much longer lifespan—lasting more than 20,000 cycles. The battery is ideal for long-term renewable energy projects with a lifespan matching that of conventional power generation assets at 30+ years.
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“ MIKE NEYLAN
Consumers are looking for cleaner sources of energy with the same duration and reliability that they’re accustomed to having. MIKE NEYLAN
If there is ever a service interruption, CellCube receives an alert so that they can respond promptly and keep the energy flowing while reducing the cost of wasted energy. The battery can be looked after around-the-clock or be monitored remotely. In the past, electricity storage was limited to small electrical-chemical batteries like lead acid or nickel-cadmium batteries. Lithium-ion batteries grew in popularity but were better suited for short-term storage.Vanadium batteries are better equipped for large-scale stationary energy storage, according to CellCube. The Toronto-based company has original units that have been operating for nearly 10 years, or 11,000 battery cycles. In total, there are 130 installations in 24 countries, including units in the Kalahari Desert in Southern Africa and famously frigid Siberia. Its adaptiveness to weather extremes also sets the battery apart from the competition. While some parts of the world look toward clean energy, other parts are still in the dark. CellCube has the capacity to bring electrification to future generations in rural areas. Excess renewable energy can be stored and then fed into a microgrid, or an electricity grid separate from the mainframe grid. A diesel generator, less expensive than gasoline but a nonrenewable form of energy, can be used to charge the CellCube, but a shift to clean energy may lead to more autonomy for distant communities. “If you dovetail it with solar or wind, then you have a cheap, clean, renewable source of energy driving the power but used in conjunction with storage, you have a much more efficient system completely independent from the grid,”says Neylan. “So, it allows communities that are isolated in any particular way to really assume control for their own power generation systems and to do so on an economic basis and on a clean basis.” CellCube is looking to pave the rough road to renewable energy by providing consumers in all locations and climates with cleaner energy they can depend on to power their lives in rain or shine. 22 | PUBLICENTREPRENEUR • Issue 3
EXPLORING OPPORTUNITIES IN BATTERY METALS: COBALT AND NICKEL
PACIFIC RIM COBALT Cobalt and nickel covered with one prized Indonesian asset By Uttara Choudhury
E
nergy storage is a technology crucial to our future, and for good reason. Affordable storage is “the missing link” between intermittent renewable power, such as solar and wind, and 24/7 reliability, according to McKinsey and Company. Ranjeet Sundher, Chief Executive Officer of Pacific Rim Cobalt (CSE:BOLT; OTCMKTS:PCRCF), which is developing a cobalt asset in Indonesia, says a major form of energy storage includes lithium-ion batteries, and one of the metals they rely on heavily is cobalt. “Global demand for renewable power is fueling a massive shift from traditional energy supply chain economics, and the most widely used power source for portable applications is cobalt-reliant lithium-ion batteries,” said Sundher. “Pacific Rim leverages the global shift to renewable energy and the electric vehicle revolution by capitalizing on two elements: cobalt and nickel. Cobalt and nickel are both essential to lithium-ion batteries.” The mining industry veteran says lithium-ion batteries can be used to smooth the flow of power. They can be integrated into electricity systems so that if a main source of power fails, it provides a backup, improving reliability. Despite Tesla Chief Executive Elon Musk tweeting in July that he wants cobalt out of his next-generation batteries, cutting the base metal can create safety and performance issues. For now, the supremacy of cobalt in the growing electric car market is unassailable. “Cobalt is necessary for any lithium-ion battery with a high energy density. Essentially, any high-performance battery requires cobalt. As most of these batteries are for vehicles and phones, performance is a necessity. Therefore, you cannot get rid of cobalt,”said Sundher. Sundher, who previously founded Indogold Explo2018 • PUBLICENTREPRENEUR | 23
EXPLORING OPPORTUNITIES IN BATTERY METALS: COBALT AND NICKEL
offtake partners much earlier than we normally would.” ment with Beijing Easpring Material Technology Co. to purchase The Canadian company has a production permit, environnickel sulphate and cobalt sulphate from the Cyclops project for mental permit and sealed road access 12 months of the year to five years from the start of commercial production. the project.“This means we can work on development without “This is a major milestone for us. Beijing Easpring supplies any seasonal delays,” said Sundher. “We are currently beginning five of the world’s top six battery manufacturers. They are into drill 150 holes totaling 5,000 credibly sophisticated and dedmetres on our Cyclops Project icated to the electric revolution. and aim to make our historic esOur business model is China-factimate of 37 million metric tons ing,”said Sundher. at 0.11% cobalt compliant.” It’s no secret that global batThe goal of the program is to tery makers have been searching establish a maiden compliant for ways to reduce cobalt in their resource on the project as well batteries to cut costs. Next year, as to identify target locations for China’s largest lithium-ion batextraction of mini bulk samples tery maker, Contemporary Amrequired for metallurgical and perex Technology Ltd., plans to process testing. begin producing next-generation With a historic estimate of nickel-rich batteries, called NCM 37 million metric tons grading 811, which are cheaper to make 0.11% cobalt and 1.31% nickel and have longer lifespans. at a 0.8% nickel cut-off grade, Pacific Rim Cobalt is posiCyclops contains significant cotioned to roll with these changes balt and nickel mineralization as in battery composition, though, as well as excellent infrastructure it has both cobalt and nickel in its for year-round development arsenal. activities. “The NCM 811 chemistry does Sundher makes clear that reduce the amount of cobalt, but China is a focus of the compait replaces it with nickel. We are ny’s strategy for eventual supply. a cobalt and nickel company, so RANJEET SUNDHER “A key factor and strength of our the switch does not affect us as development going forward is much as other companies,” said our proximity to China. IndoSundher. nesia faces China. China is a big investor into Indonesia and “Our preliminary offtake partner, Beijing Easpring, is one of they are a big consumer of cobalt,”said Sundher. the leaders of 811 chemistry, and it is not anticipated to be the Indeed, China’s fast-growing battery industry accounts for leading battery chemistry for a number of years,”said Sundher. 80% of cobalt usage. Beijing is locking down supply chains and “It’s Day 1 in our company and I firmly believe that any ingobbling up as much cobalt as it can. vestor who is interested in cobalt and understands the cobalt Pacific Rim Cobalt has signed a preliminary offtake agreesupply chain should have a close look at what we are doing.”
“
It’s Day 1 in our company and I firmly believe that any investor who is interested in cobalt and understands the cobalt supply chain should have a close look at what we are doing.
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ONE WORLD LITHIUM Explosive demand for energy storage stokes future for this explorer
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EXPLORING OPPORTUNITIES IN BATTERY METALS: LITHIUM By Rene Pastor
E
nergy storage sounds very much like a prosaic industry, but it is poised for a boom. One World Lithium (CSE:OWLI) hopes to be part of the explosive growth. Tim Brock, a consultant to One World Lithium, or OWL, believes that a junior company with an eye on eventual production must strive to be a low-cost producer with a long-term supply contract. “One World Lithium has the potential to do this,”he said. OWL has reason to be excited, given the particulars of its Salar del Diablo property in the State of California Baja Norte, Mexico. The project covers a large closed basin that provides a compelling exploration setting for the presence of lithium in brines. The Salar del Diablo project has the potential to be a low-cost producer, one reason being that it sits about 35 kilometres from San Felipe, a cost-efficient regional service center with a deep-water port that could ship lithium carbonate to customers in Asia and the rest of the world, Brock explained. One World Lithium has an option to acquire up to a 90% interest from the New Energy Discovery Group. The company currently has a 60% working interest and on completion of the initial drilling program will have earned an additional 20% working interest with an option to purchase an additional 10% on receipt of a bankable feasibility study. OWL expects to have an OTCQB listing in September as well as to be interlisted on the Frankfurt Exchange. Lithium has multiple industrial applications, including lithium-ion batteries, heat-resistant glass and ceramics, lithium grease lubricants, plus as an additive for iron, steel and aluminum. All told, this creates demand greater than current world supply. Demand for lithium-ion batteries for electric cars, storage, and mobile devices by manufacturers in Asia, Europe and North America, has mixed with supply trends to drive lithium prices significantly higher. The price of lithium is up 870% since 2005, and 177% in the last year alone. In addition, countries are beginning to set dates after which all vehicles sold must be non-internal combustion.
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EXPLORING OPPORTUNITIES IN BATTERY METALS: LITHIUM
Brock believes several trends will influence the energy storage industry through 2025. Demand for lithium carbonate will more than double to 600,000 tonnes by 2025 from 270,000 tonnes in 2018. Meanwhile, supply should rise to between 500,000 and 700,000 tonnes in 2025, compared with about 200,000 tonnes at present. Lithium supplies currently dominated by Albemarle Corp., SQM and FMC Corp. “may be challenged as more independent production of lithium comes on line,”Brock notes. TIM All of this is keeping the energy storage industry on the boil. The Salar Property is slated for drill-testing in late October 2018. Plans call for 4,000 metres of drilling at 11 drill site locations to intersect possible lithium bearing aquifers. The pre-drilling results from geochemical, geophysical and geological work defined over 60 sq. km of potential lithium in brine aquifers (formations). The Salar is approximately 8,000 28 | PUBLICENTREPRENEUR • Issue 3
feet deep, which gives the potential for stacking of more than one aquifer going to depth. There are five geological conditions that must be present in order to successfully explore for a lithium-in-brine deposit. These are a closed basin, meaning that no fluids can escape; presence of hot springs; a volcanic source of lithium; faults to transport the lithium to the Salar; and a regional heat source. The Salar del Diablo meets all of these necessary conditions. As a comparison, these conditions are also present BROCK at the Salar de Atacama, which is a similar size to the Salar del Diablo. OWL has been in discussions with potential buyers as well as offers to joint venture future exploration but elected to drill the property on its own. The market is watching in anticipation as the Salar del Diablo project is one of the largest lithium-in-brine prospects to be drilled in 2018.
FOCUS ON CANNABIS TECHNOLOGY
CANNVAS MEDTECH Knowledge is king in the cannabis world too
By Ellen Kelleher
“W
e really want to be the Google of cannabis data,”is how Chief Executive Officer Shawn Moniz sums up the mission of Cannvas MedTech (CSE:MTEC), a Toronto-based startup that specializes in educating the public about marijuana. Having watched from the sidelines as Canadian companies sprung up to offer marijuana and its associated hardware, such as vaporizers, Moniz chose the less-travelled road of education when he launched his own cannabis company. “The benefit of being a digital reference library of cannabis is that we can go into any country and people can learn about the different uses and a safe way of using cannabis if they so choose,”he says.“We are not dependent on any type of legislation or political maneuvering because it’s education, and education has no borders.” Cannvas MedTech went public in July on the Canadian Securities Exchange as well as the Frankfurt Stock Exchange. “We wanted to carve a little niche for us,” Moniz says.“We found there were a whole bunch of people growing…and on the other side, everyone was getting into devices, vaporizers and oil vaporizers. But we thought we don’t really want to go into those two spaces.” Moniz decided instead to offer straight talk about cannabis after spending five years building platforms for big pharmaceutical companies like Pfizer, AstraZeneca and Bayer—which tended to put patients
SHAWN MONIZ
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