SensOre Ltd (ASX:S3N) has grabbed the opportunity to acquire Intrepid Geophysics, a leading provider of geophysics software and services headquartered in Melbourne, Australia, to expand its AI geophysics capacity.
The transaction will increase SensOre’s annual recurring revenue by about A$2 million with an instant global client base and allow the company to unlock strong global demand for geophysics, geochemistry and geological machine learning and AI minerals targeting.
This deal will primarily be funded through the issue of new fully paid ordinary SensOre shares.
"Major opportunity"
SensOre CEO Richard Taylor said: “Acquiring Intrepid Geophysics is a major opportunity for us.
"Intrepid Geophysics’ deep geoscience and machine learning expertise in geophysics complement SensOre’s geochemistry and economic geology focus for targeting in mineral exploration. Demand for advanced geophysics software is strong and deployable globally.
“Intrepid Geophysics’ years of product leadership, data collation and collaboration with government geological surveys will benefit SensOre’s data platform development and client service offerings. We are looking forward to integrating Intrepid Geophysics’ exceptional talent with our team of innovators.”
Intrepid Geophysics managing director Dr Desmond Fitzgerald added: “The combination of SensOre and Intrepid Geophysics will unlock growth opportunities in a strong market for high-level exploration targeting. We look forward to being part of a growing and exciting geoscience group.”
Pilot program success
SensOre and Intrepid Geophysics completed a successful pilot project in Victoria in the June quarter of 2022, confirming the technological synergies and product complementarity between the two companies.
The results of the pilot are expected to be deployed in the current quarter, focused on the highly prospective Stawell and Ballarat gold corridors as there is strong interest from prospective clients within these corridors.
Combination benefits
SensOre’s strategy has been to organise all of Australia’s geoscience data within its proprietary data cube technology and Intrepid Geophysics’ 35 years of integrated experience will significantly advance that capability.
It will also expand the company’s mineral exploration technology sector presence and exposure through a second team of dedicated geoscience professionals based in Australia’s east coast with established relationships in Asia, Africa and North/South America, as well as cross-over expertise in the oil and gas, groundwater, geothermal and the emerging hydrogen storage sectors.
In addition, SensOre will gain access to multiple new targeting and decision-based proprietary technologies and strategic decision-based services using 2.5 dimension Airborne Electro-Magnetic (AEM) inversion technology, tensor gradient technology, geology from geophysics feature extraction and service automated workflows.
These technologies fill a gap in SensOre’s product suite by incorporating geophysics products that take exploration targeting from the macro-focused Prospectivity Modelling and Discriminant Predictive Targeting® approach into drill target delineation in three dimensions.
A$5 million deal
The agreement values Intrepid Geophysics, including its extensive intellectual property and data repository, at A$5 million.
SensOre will pay A$3 million through the issue of the company’s shares at an issue price of $0.70 and A$1 million in cash. Should SensOre share price trade below the issue price for 12 months following the transaction, the shares to be issued will be adjusted to a maximum of 4.3 million.
The company will pay a further A$1 million contingent cash payment on the one-year anniversary of the agreement, subject to satisfactory completion of performance hurdles in relation to revenue generation and key personnel retention.
This acquisition is expected to be completed sometime this month.