Tuesday, December 27, 2011

Focus Metals - The potential just keeps building

As 2011 winds down and we look forward to the ringing in of another year, I would like to look at what could potentially help investors to realize additional value from Focus Metals (TSXV:FMS)(OTCQX:FCSMF). The company has recently released their NI43-101 resource estimate, which outlines a resource very much in-line with what was expected from the historical data. There is of course, the issue of off-take agreements to be determined yet, although there is lots happening in that regard according to CEO, Gary Economo. It is now widely known in the research community, as well as the industrial community, that to utilize graphite/graphene for a specific project, it is of paramount importance that a proper amount of testing be completed in order to ensure the graphite/graphene will be appropriate according to the customers specifications. Obviously this leads to extended wait times, as this testing is completed, and the decisions are then made as to whether the graphite and or graphene meet the prerequisites of any potential off-take partners. With several comments being made in connection to the high quality of the graphite and graphene available from Focus Metals' Lac Knife deposit, we can now see that Focus Metals is definitely poised to reach out and take possession of the position they have striven to reach, that of a globally dominant supplier of the highest quality graphite and graphene. I have made reference to the potential of Focus Metals many times since I first started to cover the company with posts in my blog, and as the company continues to progress, that potential only seems to grow. I have had people ask me what the effect on Focus Metals might be if the price was to drop somewhat, to which my main reply has been, Focus Metals will be in as positive a position as possible. Considering that the cost of producing this graphite and graphene will be amongst the lowest in the world, and with the highest quality product, it is with ease that I see Focus Metals continuing their progress uninterrupted. This is of course, if there is ever any downward pressure on prices. In the event that there are some immediate breakthroughs in research and the supply side of the equation gets outstripped by demand, the potential I will attempt to show here could be dwarfed.

I believe graphene stands to quite possibly dwarf graphite in financial terms for Focus Metals looking forward, but I found the following to be quite interesting, and I thought it would help to show the true depth of the potential uses for graphite as well as graphene.
There seems to be a renewed interest in nuclear power, following the crisis in Japan earlier this year. It is true that nuclear power has competition in some parts of the world, which may be more economically feasible, such as the advent of shale gas in North America, but this cannot be said of the entire world. For instance, both China and India, are in desperate need of a much cleaner method of producing power. There are many other countries that fall into this category, but in the case of these two countries, the growing population coupled with the growing economy will soon leave little to no choice. http://world-nuclear.org/info/inf104.html

 Many concerns of course, still abound over the safety of nuclear power, but there are alternate options which are available now that involve some of the latest state-of-the-art technology.  As these uniquely different technologies continue to be tested, some have shown considerable promise. One such reactor is discussed in this article, under the heading HTR-10, which is approximately 3/4 of the way down the page, although the entire article is quite interesting, http://www.world-nuclear.org/info/default.aspx?id=26187&terms=graphite%20pebble%20bed.
It comes as little surprise that SGL Group, which is arguably one of, if not the, world's largest carbon company, would be firmly rooted into such a technology, concerning the use of graphite.
There are a myriad of other uses that graphite is being considered for presently, many of which I will try to cover in the future, however, graphene seems to be at the centre of most every scientist and researcher on the planet, so I would like to switch our view more to this very exciting space.

Graphene research has become a rather dominating factor on a global basis, with virtually every country in the world becoming involved in one way or another. In the EU for instance, there is an organization that has been formed called Graphene Flagship. Here is a link that will explain how this organization works, (there are 2 videos, one is an introduction to graphene, the other is an introduction to the Graphene Flagship), http://www.graphene-flagship.eu/GF/Videos.php.
As we can see this will have a profound effect at enabling graphene research to progress at a much faster pace, as opposed to all research being segregated. One example of this, that I believe brings home just how this can be beneficial, is the case of Nokia and their efforts to bring to life a mobile phone called the "Morph" into our everyday lives.   http://www.independent.co.uk/life-style/gadgets-and-tech/what-is-graphene-and-why-is-nokia-touting-it-as-the-supermaterial-of-the-future-2297476.html
This project is not considered to be just another research project, but is something that Nokia seems to view as a project that must be pursued until completion. It is with ease that we can see just how deep the determination is, and how broad the commitment is from so many sources to bring graphene to the forefront of our technological advances.

In yet another fascinating field of research, we find that there has been considerable progress in the research of single molecule nanomagnets enabling novel graphene spintronics devices. Although there are reportedly some issues that require more research, there are no fundamental problems foreseen. http://www.nanowerk.com/spotlight/spotid=21982.php

Recently we have seen an abundance of research to determine the viability of graphene to replace silicon in the manufacturing of computer chips. IBM announced this summer that they have built a computer chip made entirely with graphene. While this research has not provided us with the technology to say we can replace the silicon chip with a graphene chip today, it is reportedly becoming more certain that this will indeed be the case, and this is expected in the short to mid-term apparently. http://www-03.ibm.com/press/us/en/pressrelease/36135.wss

When we think about graphene it is common for us to think predominately in terms of high-tech electronics. This is no doubt due to the strides being made in this research, but there are so many other potential uses for graphene. Some of these are much less discussed, and yet the potential is almost beyond comprehension if their was to be a breakthrough in some of this research. I am speaking of graphene being researched for medical uses. For instance there are currently about 15 million people suffering from Alzheimer's Disease worldwide, and this figure is expected to grow by 4 fold by 2050. The anguish that comes not only to those who are diagnosed with this most wretched of diseases, but also to those who care for them, is something that most if not all of us can appreciate. I do not wish to try and downplay the seriousness of this, but rather to bring to light just how valuable this type of breakthrough would be. http://www.nanowerk.com/spotlight/spotid=23726.php
In yet another fascinating research project we find that there is considerable potential for graphene to be used in the diagnosis of malaria. Malaria is among the most deadly infectious diseases on the planet, killing untold numbers annually. It goes without saying this is a disease that man needs to conquer, and sooner is much preferred to later. The scientists who are performing this research bring not only hope to this issue, but also afford us a view as to the actual potential. http://www.nanowerk.com/spotlight/spotid=23534.php

Now let's take a look at some research that is currently being done in the field of batteries. For quite some time people have thought that the Lithium-ion battery would potentially be the battery of choice as the entire world begins to look at the possibilities of moving from internal combustion to all-electric vehicles. This did indeed appear to be the case, but researchers kept coming up against the problem of how far a vehicle could run per charge, and the results were not favorable. Now research has found a battery that could potentially hold all the attributes required for the impending revolution towards electric vehicles. Instead of a lithium-ion battery, researchers are now leaning towards a lithium-air battery. The Li/O2 couple is especially attractive because it has the potential for the highest specific energy among all the known electrochemical couples. What does this all mean in plain terms? A lithium-ion battery is capable of reaching distances in excess of 500 km per charge, and this definitely helps researchers see the potential this technology could hold. http://www.nanowerk.com/spotlight/spotid=23258.php

There is obviously an almost infinite amount of research on possible uses for graphene at present. One thing that stands out prominently in my mind, is the need for not just graphene for the research being completed, but the need for high-quality graphene. This will apply to not only the research but also to any actual applications. From an investment viewpoint, this prompts the question of who stands to gain the most from all of this need for high-quality graphene. As one considers all the options for sourcing graphene that meets the requirements, and keeping cost in mind also, I find Focus Metals to be most aptly positioned. Grafoid Inc., which is a graphene joint venture in which Focus Metals holds 40%, has very recently announced a signing of a MOU with Rutgers University. The agreement was signed by Mr. Economo as President of Grafoid Inc., and Professor Thomas Nosker, Principal Investigator for Rutgers University’s Advanced Polymer Materials School of Engineering. http://www.focusmetals.ca/english/news/press-releases/2011-2/dec12011
Not only is Rutgers University one of the most highly regarded advanced materials research center's that works with industry to commercialize new technologies, and commits to providing the research and inter-disciplinary laboratory facilities, but Professor Nosker is quoted as saying, “I am very pleased that we have an opportunity to spearhead the exploration for the applications from the very high quality graphite received from the Lac Knife project in Canada.”

All things considered, I am firmly entrenched in my opinion that Focus Metals will undoubtedly reach their goal of becoming the "go-to" company for graphite and graphene products that are far and above the quality available from virtually all other sources, and this in turn will allow them to realize the value that such a global dominant supplier will display. I also believe that we will continue to see progress, which may or may not be quite as we would think appropriate, that will be the result of a management team that has not only the best interests of Focus Metals at heart, but ultimately, also the shareholders interest. When management tends to keep very quiet on some issues, I have learned this can often be construed as acting in our best interests. For example, in the research I did to follow up on much of what I have written about in this post, I found many companies to be very silent and not that forthcoming. The reasons given are invariably the same, from some of the smallest to some of the largest companies, and the main reason stated is quite simply, "To protect our proprietary knowledge." I will admit, this can be frustrating, but after meeting with several of the management team, and from the experience I have gained thus far as a shareholder, I have come to a point where I trust management to unlock much additional value as we go through this next year, and I hope for many years to come. The potential here is that large in my opinion.

As I always point out to anyone who finds Focus Metals to be a company of interest for an investment choice, please do your own due diligence. There are many places where one can look for information, and I would encourage everyone to go to the company website for starters. This can be found at www.focusmetals.ca.

For disclosure purposes, I have received no compensation of any kind for this post or my opinions. All opinions herein are strictly my own. I own shares of Focus Metals.


  1. How much do you get paid by FMS ??

  2. Anonymous, this is a rather silly question, however, in case you truly did miss reading the last couple sentences of the post, you will find the answer there. I state quite clearly I do not get paid anything in any form, be it money, shares, or anything else that could be construed as having monetary value.