Greater than Gold, Sweeter than Silver
Every few years I come across a company with 10-20 bagger potential. This company covered today will do that.
And possibly much more.
I read recently that to supply enough batteries to store a single day’s requirement of electricity in the US would require five hundred battery plants the size of Tesla’s Gigafactory in Sparks, Nevada. Currently the Gigafactory produces more batteries than all the combined production of every other automobile manufacturing company in the world.
And it’s not near enough even though the factory will eventually produce enough batteries to power 500,000 vehicles a year.
Green Energy has very real limits. The wind doesn’t always blow. The sun doesn’t always shine. To make efficient use of green energy you need batteries. You need a lot of batteries as Elon Musk discovered years ago.
An interesting Canadian based company focused around the idea of designing battery anodes with nano-coating particles of silicon came to me last week. Their patented process on an anode could allow initial specific capacity five times greater than with the use of synthetic graphite now used as well as allowing ultra-fast charging capability. I was sold enough to go out into the open market and pick up a fair number of shares.
The company is named NEO Battery Materials (NBM-V). They have put together a dream team of some of the best and most experienced battery experts from Korea. Japan, Korea and China have always been leaders in the lithium battery field. Neo Battery Materials is the only Canadian based battery materials corporation using nanocoating silicon at present.
Their Scientific Advisory Board consists of battery experts who used to work at LG Chem, 2nd largest producer of lithium batteries in the world and graduates from MIT and Samsung SDI.
Dr. Jong Hyeok Park is a company Director and Chief Scientific Advisor. His resumé contains ninety-two different battery patents. He is a Professor of Chemical and Biomolecular Engineering at Yousei University in Seoul, Korea. He brings with him three patents on the use of silicon nanocoating for anodes from the Yousei University.
Their dream team includes:
The technical issue is simple. Graphite anodes don’t work well. The industry has known for years that the use of silicon in an anode would allow far more efficient and long lasting batteries at less weight. But when ions are added to silicon, heat is created. The silicon will expand by 200% and will not flex without cracking. Silicon is the solution but the problems have to be worked out. These nanocoated anodes being designed by NEO Battery have the capability to decrease battery cost by five percent and increase Electric Vehicle Range by a massive 20% at less weight and allow for ultra fast charging.
Any reasonable investor would be asking the question, ”Why should I invest in a company when all they want to do is come up with a silicon anode for lithium batteries? Don’t the major manufacturers of batteries have a staff that can produce anodes?”
The answer is simple and it’s based around the same principal of why doesn’t Rolls Royce produce tires? Battery companies are experts at batteries but not necessarily at anodes. Using silicon as an anode for a battery is an extremely difficult technical process to crack. While everyone knows it works, there are terrible side effects such as silicon expansion and lack of flexibility.
So the big battery companies would far rather have a range of options. At the same time, a small company can put together a dream team of scientists whose sole job is to invent a silicon anode that is flexible and solves the thermal expansion problem. NEO Battery sees near term commercialization via either a high margin licensing model and/or internal production. Either route is a win-win for the company.
Some products are valued in the market for their abundance and some for the value they create. Salt for example is a cheap commodity. It has fairly limited value and is quite common. But an iPhone weighing about 200 grams costs over $2500 a pound. I doubt one contains more than $10 in minerals and materials but it has great utility, thus great value.
An anode nanocoated with silicon for use in a lithium battery can’t cost $1 in materials. But it adds great value in terms of utility for fast charging, ability to deliver high energy density and long lasting batteries that will allow far more recharging cycles and initial specific capacity five times greater than traditional graphite. NEO Battery has sorted out the thermal expansion problem and flexibility issues with silicon by using a nanocoated-polymer.
The lithium battery market is estimated to grow to over $56 billion by 2024 and $1 trillion by the year 2030. A fast on their feet anode company delivering a state of technology anode at a reasonable price would carry a great premium in the market.
There are several other Canadian listed companies who work in the anode battery space but none using silicon nanocoating. In the past year the range for each has varied from 433% to an incredible 3,700%. With a tiny market cap at present of only $21 million it would hardly be a stretch to suggest they have the potential for being a $210 million market cap or even $420 million. They have some of the top battery rocket scientists in the world on their staff.
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NEO Battery Materials is an advertiser. I have bought shares in the open market. I am biased so do your own due diligence. Their presentation is excellent and informative. View it.
NEO Battery Materials Ltd