Turning Exploration (R&D) into a Sustainable Business Model

Nevada Exploration Inc. (“NGE”) is a public exploration company that has developed new technology to identify gold exploration projects in Nevada’s valleys where the bedrock is covered. Covered bedrock settings challenge conventional exploration tools and NGE’s technology represents a significant improvement; however, because the technology is still new, NGE has had a hard time attracting buyers for its projects. Instead, NGE has advanced its exploration targets in house, which has proven costly and dilutive to shareholders. This paper examines how NGE creates value to focus NGE’s efforts on activities that maximize the likelihood and degree to which its shareholders participate in a gold discovery. This paper concludes the best way for NGE to create value is to limit its activities to the early project generation stages of the industry value chain where it can leverage its technology to identify new projects better and cheaper than its rivals.