Wednesday, June 29, 2011

Compliance Energy Corp. stands to benefit greatly from coal

Timing can be so crucial to investing and it is just as important to the company and the project that an investor might consider. In the case of Compliance Energy Corporation (TSXV:CEC) (OTC:CPYCF) this would appear to be quite true. Compliance is a Canadian based company with their headquarters in Vancouver, B.C. Canada. The company boasts Raven Underground Coal Project as their flagship project, but they also have several other properties. Raven Project is situated on Vancouver Island and is approximately 80km northwest from Nanaimo, BC, and approximately 60 km southeast of the currently producing Quinsam Coal Mine and approximately 2–20 km away from previous producing mines near and south of Cumberland BC. The Raven Coal Deposit is also 2 km from the main Island Highway and the E&N Railway. Let me show you why I think Compliance Energy Corporation is quite possibly at the perfect stage in respect to timing.

Many analysts are forecasting that coal prices will continue to rise, especially metallurgical coal.
 This would seem to hold up as a valid forecast as we consider the amount that a giant like Teck Resources (TSX:TCK.A)(TSX:TCK.B)(NYSE:TCK) has spent entering the coal industry. Teck states that coal accounts for 43% of their business. Considering the position Teck was in, as the global recession was really starting to be felt around the world, their insight to enter the coal sector as strongly as they did speaks volumes. This is a company with an extensive history in the mining industry. If we think that this move has proven to be extremely well timed on Teck Resources part, I believe Compliance Energy will stand to benefit quite handsomely from the Raven Project.

The Raven Project consists of 97.5M tonnes of measured & indicated, as well as, 34.5M tonnes of inferred and this is NI 43-101 compliant. Studies have shown that 88% of the coal contained in the Raven Project meets the standards of being graded as metallurgical coal which is used in the production of steel. Although the coal is semi-soft coking coal grade, this coal can still be used as a blended product in steel making, and thereby is of considerable value. As the demand for this type of coal increases I expect the price will continue to react accordingly. Currently the price for this grade of coal is between $235 - $275 per metric ton. This bodes well for Compliance since their estimated cost is in the range of $76.50 per metric ton. With resources that leave the estimated life of mine at 17 years, one can easily see the tremendous potential present here.

Having a large deposit is of course never a bad thing, but when your large deposit is close to deep water access, this is an obvious positive feature. Raven Project has a few possibilities of how and where to access a deep water port. The most likely choice seems to be at Port Alberni which is located 82km (50 miles) by four lane divided Highway 19 for a portion and by Highway 4 for the remainder. This leaves Compliance Energy at a distinct advantage from a cost basis for transportation, not to mention that from Port Alberni to the Asian market, is considerably less distance than say, Australia.

 The Company has completed a positive Preliminary Assessment Report on the Raven Underground Coal Project in late 2007 and a positive Preliminary Feasibility Study in October 2010, copies of which are available at www.sedar.com. The proposed Raven Project is subject to a comprehensive multi-year federal and provincial environmental assessment process. The Canadian Environmental Assessment Agency (CEA Agency) and the British Columbia Environmental Assessment Office (EAO) have invited the public to comment on the project’s draft Application Information Requirements /Environmental Impact Statement (AIR/EIS) Guidelines document. The public comment period will open May 18, 2011 and close June 27, 2011. http://www.theravenproject.ca/all_files/raven_project_facts_public_comment_period_may10-20110510-091331.pdf

Now that we have looked at all these facts, let's look at some of the relevant numbers for this deposit.

High Volatile “A” Bituminous
Semi – Soft coking coal with good coking characteristics

--Ash 9.5% (Washed)


-- Free-swelling index 8.0

--Reflectance 0.88%

--Average Fluidity 2,694 ddpm

--Sulphur average 1.12%

With this much coal, who will they sell it all to, not that there would be any problem finding sale for this type of coal at present, nor for quite some time into the foreseeable future. Compliance has already got that covered in a very effective manner. During 2008, the definitive agreements signed with I–Comox Coal Inc., a wholly owned subsidiary of ITOCHU Corporation and LG International Investments ( Canada) Ltd., a wholly owned subsidiary of LG International Corporation (the “Parties”) provided for the creation of a new joint venture named the Comox Joint Venture to investigate the possibilities of developing the Raven Coal Project. http://www.complianceenergy.com/index.php?id=88
It is very difficult not to get a sense of just where Compliance Energy Corporation is working there way towards. With these two companies capable of moving vast amounts of coal it is entirely possible that Compliance will not have to worry about finding sale for any of the coal produced.

Compliance Energy Corporation has slightly under 63 million shares with slightly over 76 million shares on a fully diluted basis. It may be necessary to raise some money in the future for construction, but the company is already planning on how to minimize any further dilution. There is one other aspect to Compliance, and that is they currently hold approximately 2.2 million shares of Copper Mountain Mining (TSX:CUM). Copper Mountain is a copper mine that has just gone into production and is expected to achieve full production within the next month or less. This will have a very positive effect in regards to Compliance wanting to minimize dilution looking forward to such time when construction is to take place.

As with all companies, management is probably one of the more important factors that needs to be looked at. In the case of Compliance Energy Corp. it would be difficult to not say this is a management team that has extensive experience.
Mr. John A. Tapics P.Eng. has been Chief Executive Officer and President of Compliance Energy Corp. since November 1, 2005. Mr. Tapics has over 30 years experience in power generation, transmission and distribution, mine planning and operations, and project development. He served as President and Chief Executive Officer of Alberta Electric System Operator. He served as Senior Executive of TransAlta Corp. from 2003 to 2005. He served as eleven as an Officer of TransAlta Corporation, in charge of the Generation, and the Transmission and Distribution Business units. From 2001 to 2002, he served as President and Chief Executive Officer of Balancing Pool of Alberta. He has been a Director of Compliance Energy Corp. since 2005 and Copper Mountain Mining Corporation since April 20, 2006. He has been a Director of Prairie Mines and Royalty Ltd. of Royal Utilities Income Fund since June 27, 2006. He has been Director of Run of River Power Inc. since June 24, 2010. He has been Director of Lions Gate Metals, Inc. since April 6, 2011 and serves as its Lead Director. Mr. Tapics serves as Director of the Coal Association of Canada, the Alberta Chamber of Resources and the Western Electric Power Institute. He has been active with the Canadian Electricity Association, serving on the Generation and the Transmission Strategic Issues working groups; and the Canadian Institute of Mining and Metallurgy serving as the Calgary Branch Chairman. Mr. Tapics graduated in 1975 with a Bachelor of Science (Honours) in Mining Engineering from Queen's University in Ontario, Canada.

J.C. (Jim) O'Rourke  graduated from the University of British Columbia with a B.A.Sc. in Mining Engineering. Over the next 14 years, Mr. O'Rourke was involved in the start–up of a number of major mines including Gilbralter, Marcopper, and Endako while working with Placer Development Limited.
He has over 30 years of hands–on experience in mine evaluation, financing, development, operations and marketing in Canada, the United States, South American and the Philippines. Prior to his retirement, Mr. O'Rourke was responsible for the acquisition, evaluation, financing and development of the $140 million Huckleberry open pit copper mine in Northern British Columbia. Mr. O'Rourke is currently the President and CEO of Copper Mountain Mining.

Jim Defer graduated in 1987 from the University of Manitoba with B. Comm. (Honours). Mr. Defer is a CA & a CBV and a member of the Institute of Chartered Accountants and Canadian Institute of Chartered Business Valuators. He joined the Company as Chief Financial Officer effective March 01, 2010. Mr. Defer has significant experience in investment banking, capital markets, corporate finance, as well as accounting, valuation and financial advisory services. Most recently, he was head of investment banking for a Vancouver based firm and has held senior managerial roles with two major accounting and auditing firms.
http://www.complianceenergy.com/index.php?id=86

I am of the opinion that this is definitely not only a much needed company with a project that will bring many positive economic benefits to this area of Vancouver Island, but one that has taken the time to ensure that the environmental footprint they leave is as small as possible. Compliance Energy Corp. has involved the communities that stand to be affected along with extensive cooperation with the First Nations of the area. Compliance has also taken every possible chance to prove that they not only care about the communities and the people but also that they are prepared to take whatever steps are deemed appropriate to ensure that there will be no environmental issues that may cause damage.

First Nations Consultation

Consulting and met with twenty (20)First Nations

K’omoks and Qualicumare the primary two First nations for the mine.

Seven first nations need to be consulted for the port upgrade.

One First Nation proposes to be involved in transportation -trucking/port


In closing I would like to draw your attention to my opening comment. Timing is truly an important part of most if not all investments. For Compliance Energy Corp., I see this being as close to perfect timing as possible. While the actual process is still being navigated, this stands out to me as one of the more exciting companies with an incredible amount of potential. This is in my opinion a perfect time to explore this potential.

I would suggest to those who see the incredible potential with Compliance Energy Corporation, or that may have an interest in possibly investing, please do your own due diligence. A very good place to start this would be at the company website, which can be found at, http://www.complianceenergy.com/index.php?id=27.

For disclosure purposes I have received no compensation of any kind for this post. I do own shares of Compliance Energy Corp.


Wednesday, June 22, 2011

A look at where Focus Metals appears to be headed in the future with graphite and graphene

Many people, if not everybody, are all wishing they knew the answer to the ultimate question, "Where is Focus Metals really headed". For shareholders it is a very valid question, and one that all too many times in history, has not ended in the answer that people had hoped for. Personally, I opine that this is definitely not the case with Focus Metals (TSXV:FMS). The management has stood by every statement they have made, providing it is of course within their control. In the matter of the NI 43-101, which is anticipated by many, management had originally made a statement of when they expected to release this  document. Although this was accurate at that specific time there are issues that can arise that are beyond expectation or control of the company. It is my understanding that this is the case in this regard. Ultimately the NI 43-101 issue has already been dealt with for all intents and purposes since the company has already reported that there is little to no changes to be made from the historical data that has been presented in the past. With this particular property scheduled for production not once but twice in the past leaves one with the understanding that this 43-101 is more of a formality as opposed to something unknown.

In answer to the original question of where is Focus Metals headed, let's take a look at who they may be looking at for possible companies that will help to bring the most value to the company.
There are obviously many companies to look at but I will cover the ones that I feel would have the highest potential in my opinion.

One of the first companies that stands out prominently in my mind is a company called Superior Graphite. Superior Graphite is a private company but are considered to be a leader globally in a large number of graphite applications and uses. The "fit" between these two companies is probably most closely resembled by a hand in a good fitting glove. The scope of what Superior Graphite has to offer in terms of what products and services they currently provide is impressive at the least.

Superior Graphite has a wide range of markets they serve in a variety of ways. Some of these markets include agriculture, battery / fuel cells, ceramic armor, carbon parts, ferrous / nonferrous metallurgy,
friction management, hot metal forming, polymer / composites, powder metals, lubricity, and performance drilling additives. They specialize in thermal purification, advanced sizing, blending, and coating technologies. As you can see, this is not only a business that provides value added graphite and carbon-based solutions globally, but if Focus Metals were to begin a relationship with this company, the tremendous upside potential would be huge.

While some of my previous posts have explored the possibilities of graphene, which I firmly believe will become a market of extreme importance to Focus Metals, this post will deal more with the current uses of graphite and how this can help to raise the value of  Focus Metals.

Superior Graphite produces everything from a product they call Protect Tiles *, to HSC Silicon Carbide Powder*, and FormulaBT*, and a list that is overly impressive. The company is developing a system for the in-situ recovery of oil from oil sands deposits. This technology is based on the elctro-thermal heating of carbon electrodes. The heat induced to the electrodes is then transferred to the oil deposits allowing the oil to flow towards the recovery systems. If anyone has flown lately during the winter season you may well appreciate the fact that there is a product called Snowfree*. This is a product that is a proprietary asphalt-based paving system developed to maintain the surface of an asphalt pavement free of snow. This system has been developed for installations that are plagued by snowfall disruptions and where safe winter operations are required. http://www.superiorgraphite.com/brands-snowfree.php
Not only is Superior Graphite one of the leading companies globally in graphite use for the products they manufacture, but they also have some of the most state-of-the-art facilities for research and development. http://www.superiorgraphite.com/about-research.php

 I will give you the link to their website here, http://www.superiorgraphite.com/index.php. I would suggest to look through their whole site and I'm sure you will quickly see why I find this to be a company that I would not be surprised to hear more of in the future in connection to Focus Metals. I might add that you should especially explore the tab for solutions, this will show you a complete listing of what Superior Graphite produces. I will venture to say that if I am correct in my assumptions, this could potentially be a company that Focus Metals has engaged in negotiations, and if so Focus Metals value will not only rise significantly, but will be measured in terms of rising by a factor of much higher than double or triple. In my opinion this would position Focus Metals to become a giant in the sector if not the leader of the graphite producers. The fact that Superior Graphite has over 90 years experience in the field of working with graphite is just one more plus in my view.

Now let me move on to what could conceivably be another potential candidate for a possible business relationship with Focus Metals. This company is called Graf Tech International. Headquartered in Parma, Ohio, GrafTech is one of the world’s largest manufacturers of synthetic and natural graphite used primarily in the manufacture of graphite electrodes, which are essential to the production of electric arc furnace steel. The 125-year old company also manufactures graphite for use in high-growth markets such as consumer electronics, solar energy, and oil and gas exploration.

Grafhttp://www.graftech.com/HOME.aspx.
With the experience and the locations of their manufacturing facilities they would obviously fit well into the plan that Focus Metals has both now and looking forward. Their  products, which include graphite electrodes, advanced carbon and graphite materials, and flexible graphite, are manufactured on four continents and sold to customers in over 65 countries.Graf Tech is therefore capable, as a potential company with whom Focus Metals reaches an agreement, of assisting Focus Metals bring their business plan to fruition.


These are two of the more prominent choices that I believe have everything to offer that Focus metals would look for in a company. There are of course any number of other companies that also have many of the qualities that would attract attention from Focus Metals. Showa Denko Carbon Inc. (SDKC) is another company that potentially might be suited to Focus Metals. Here is a link to their site. http://www.sdk.co.jp/english/news/2011/12424.html
Another company that stands out somewhat would be Olmec Advanced Materials. This company prefers to work with the highest grades of flake graphite they can obtain. They specialize in some very unique products that require flake graphite that has the capabilities to be purified to 99.5% to 99.9%. Although graphite itself is not that uncommon, to find flake graphite of the grade that Focus Metals possesses in their Lac Knife deposit is not common. This is even touched upon in SDKC's website, and although the only mention of graphite in Canada is of British Columbia, I would expect they would give Focus Metals their undivided attention upon learning of the grades available and the quantity available. Here is a link to their website. http://www.olmec.co.uk/graphite_and_carbon.htm

All of these companies have potential to be possible candidates for companies that Focus Metals may be in negotiations with, but if they announce publicly that my assumptions are true, I am sure I need not explain how this will change the value of Focus Metals upward in a significant way.

Overall I am completely satisfied with everything that I see management doing in their effort to live up to their promise to shareholders in that they said they planned to unlock as much value as possible from this company. To-date I view them doing exactly that, and as we progress forward with the business model they first delivered, I foresee some very exciting things to come from this company. The company has already said that the 43-101 is delayed, and as I stated earlier, it is my belief that this is not something that is within the managements control. Focus Metals has also hired Roscoe Postle Associates (RPA) to commence work on the mine design and engineering for Focus Metals' Lac Knife, Quebec flake graphite property, as released in this news release, http://www.focusmetals.ca/news-focus-metals/may6-mine-design-lac-knife-graphite.html
These points, along with the on-going negotiations for off-take agreements will undoubtedly bring lots of news over the coming months.

Please Note: Any names of products or companies that are identified with an "*" denotes that these names are trademarks or registered insignia of the companies which use and own these trademarks.

For disclosure purposes I have received no compensation of any kind for this post. I do own shares in Focus Metals and I may add to this position within the near future.

Thursday, June 16, 2011

Focus Metals is well positioned to take advantage of the worlds newest graphene discoveries

Focus Metals (TSXV:FMS) is well positioned to take advantage of the strong rise in the demand for high quality graphite. What makes this company really stand-out in this market is the enormous amount of research currently being conducted on graphene. Graphite has many known uses in today's world, and with little exploration for a number of years, due to the fact that the market had been saturated with lower priced graphite, the global supply of graphite has become such that demand has overtaken supply. This situation is not expected to improve in the near term, but is in fact expected to continue to worsen. Obviously this bodes well for Focus Metals and their Lac Knife project in Quebec, Canada.

Now if we think that Focus Metals possesses a valuable property in terms of the 8.1M tons of graphite, then let us stop and consider what the current flood of research can and will do for the value of Focus Metals. The first mention of the possibility of graphene was made quite a number of years ago now, but it was not to raise interest until 2004, when Andre Geim and his colleague Kostya Novoselov discovered a substance called graphene. Here is a link which will give you some background to the two who discovered graphene. This is courtesy of
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You may note at the end of this article, that there is a quote by Andre Geim that gives a clear indication of just how profound graphene will become. This is not just another scientific "fad" but is rather a product that will, as some have claimed, change the world we live in. There is the old expression of the tip of the ice-berg, and when related to graphene it is exactly that. Research has so far to go in so many areas to understand just what and how graphene can and will be implemented into, in regards to products that we use on a daily basis. However even though we are watching graphene in its infancy, graphene is progressing by leaps and bounds. This is due to the advanced stage of technology and equipment available to researchers of today. To say that graphene is the latest and biggest rage in the world of scientific research, would be to make a gross understatement.

Many people have proclaimed graphene capable of taking over from silicon in the world of circuitry and nanocircuitry, while there are of course those who claim it is years away from becoming a reality, if indeed it can even be considered a replacement. As evidenced by the tremendous push into a near unprecedented amount of research being undertaken, and into so many possible uses for graphene, one almost needs to follow the updates on a daily basis. An example of this would be found in this article from UnderstandingNano.com, which discusses a possible breakthrough that some researchers have made, in regards to overcoming some of the pitfalls, previously encountered in trying to use graphene in substitution of silicon. http://www.understandingnano.com/graphene-thermochemical-nanolithography.html

How many of us today enjoy the ultra-thin and electricity-saving organic light diodes, or so-called OLED's. Well it is most likely most of us I'm sure. OLED's have been recently been introduced commercially into applications with mobile phones, cameras, and super-thin TV's. While OLED's contribute nicely to the devices we use daily they also have some drawbacks. These drawbacks can be overcome by replacing indium with graphene. The research that led to this has also uncovered other possible uses which are discussed in this article from UnderstandingNano.com. http://www.understandingnano.com/graphene-light.html

The above mentioned research and uses for graphene stand to help Focus Metals to realize a significant profit from their Lac Knife property. Now let's take a look at an area where graphene is not only drawing attention in terms of research, but also stands to possibly pave the way to finding new cures for any number of diseases that until now have proven to be deadly in many cases and in which no cure has been found to-date. Researchers have devised a way to use graphene with DNA, and by the reports so far it looks quite promising. Here is an article by the Pacific Northwest National Laboratory, which is a US Department of Energy lab. Research done at this facility and also in conjunction with Princeton University has led to this article, http://www.pnl.gov/news/release.aspx?id=794. The scope of where this type of research can lead is at the least life altering for many.

 The concept of a single atomic layer of crystalline material is easy enough to grasp, yet creating such a layer was not achieved until 2004, when two scientists, Andre Geim and Konstantin Novoslov, demonstrated the existence of a single atomic layer of carbon called graphene. This discovery was followed by a flurry of research activities, with the proposal of several applications for defense and commercial products. Through its support of several multidisciplinary research initiatives and DARPA-funded programs during the past three years, the U.S. Dept. of Defense has also indicated the importance of graphene for its military applications. There are several technologies that stand to benefit from graphene in the near future. Here is a link to an article from Raytheon that goes into more detail.  http://www.raytheon.com/technology_today/2011_i1/special2.html

So where does all this leave Focus Metals? I would suggest that Focus Metals is extremely well positioned to benefit from this huge influx into the research of graphene, and this is based on many factors. Focus Metals has what has been described as a world class graphite deposit at Lac Knife, which is located in Quebec, Canada. Canada is very stable from a political stance, and Quebec has been referred to as one of the world's most mining friendly areas. With 8.1MT of graphite, this company stands to gain much in terms of value. Not only does Focus Metals possess 8.1MT of graphite, but they also have something that many people do not seem to consider, and that is the Factor 17 aspect. Factor 17 is in reference to the carbon content, which in many, if not all graphite deposits globally, are reported to be in the 2% to 5% range. Lac Knife has shown from historical data that the carbon content is on average 17% carbon content. This equates into massive profit levels for Focus Metals since the size of the deposit is quite big, the grade is one of the highest grades known, and the graphite is quite suitable to purify to a point of over 99% pure. This is important since this type of purity, is what is required to be of use, in the high technology applications. The price of large flake graphite which is 95% pure is currently approximately $2500 to $3000 per ton. The $10M  that Focus Metals is planning on spending, as an addition to the mill, is to further process the graphite to bring it to 99% or higher. This is what is required to obtain graphene, and as such goes for as much as $50000 per ton. This compared to the cost of retrieving the graphite, which has been estimated at this point, to be approximately $350 per ton.

This makes it easy to see the huge potential with Focus Metals, and even more so, when we consider the joint venture entered into in regards to graphene. Focus Metals announced March 2, 2011 that the company had formed a joint venture to develop graphene technologies. Focus Metals has details on their website, http://www.focusmetals.ca/news-focus-metals/mar2-graphene-technologies.html.

For those interested in Focus Metals, everyone should do their own due diligence. Focus Metals' company website can be located at www.focusmetals.ca, and is a likely place to start.
For the purpose of disclosure I have received no compensation of any kind for this post. I do own shares in Focus Metals.

Wednesday, June 8, 2011

If Focus Metals is valuable for it's graphite - what will graphene do for them

In case you have not heard of Focus Metals (TSXV:FMS) yet, let me say this is the most exciting company with the absolute largest potential I have ever been involved with as a shareholder. Focus Metals has a graphite project, known as Lac Knife, they are currently progressing towards production. We are starting to hear of the growth in demand for graphite more everyday. What you may not be aware of, is the fact that  there is another product, which is called graphene. Graphite is rising in price almost exponentially, and sells for up to $3,000 per ton. This dramatic increase in price is due to several factors. For many years graphite had a limited number of uses, but this has changed drastically as of late. Also there is the fact that China has controlled a large majority of the global graphite supply. China has reported that their graphite supply is reaching a point that they need to keep most of their graphite production for their own domestic use. The fact that lithium-ion battery research really made the demand grow was due to the fact that battery manufacturers discovered graphite possesses many desirable qualities. Then last year, two scientists received the Nobel Prize in Physics.  "The 2010 Nobel Prize in Physics - Press Release". Nobelprize.org. 7 Jun 2011.  http://nobelprize.org/nobel_prizes/physics/laureates/2010/press.html

Now like I stated previously, graphite sells for approximately $3,000 per ton, but graphene can sell for up to $50,000 per ton. The amount of research being initiated by countries from around the world is phenomenal. The amount of uses continues to grow almost by the day, and although many of these uses are in research status right now, many have had researchers reporting that they are very close to actually using graphene in several applications.

Some of the applications graphene is being studied for include broadening the bandwidth of Optical Fiber-Based Telecommunications. http://www.sciencedaily.com/releases/2011/06/110606112816.htm
Graphene has been touted as a near miracle product by some, for instance, when we consider that, not only is it 200 times stronger than steel, but has the ability to be bendable. Theoretically this means you could talk on your smart phone then roll it up and stick it behind your ear. Now this is truly allowing ourselves to get ahead of what researchers have accomplished to-date. I view graphene in a similar way as steel when it made a revolutionary entrance into our lives. Look at plastic when it came along. Many said it would never come to be anything close, to what we now have, in respect to the multitude of uses we now have for plastic on a daily basis. Not only did we learn how useful plastic could become , but we also came to find out just how many types and grades of plastic would actually become a part of our lives. Looking back now we would, in many instances, find it extremely difficult to imagine the world without plastic. Likewise, I foresee graphite and especially graphene, just now making their entrance into what many will quite possibly look back on as, "the product that changed the world". If this were to be proven as accurate, then this leaves those looking to invest in this new technology at the ground floor for an entry. Of course this also means that graphene, just as steel and plastic which came before it, may take years of research in some areas while still other areas will likely come into being in the very near future. The one difference I do see, that makes me think graphene will progress much faster than either steel or plastic, is the enormous interest by so many sectors and industries. The amount of interest by the scientific community and the amount of money being issued for research into the possible uses of graphene is phenomenal to say the least.

The military is extremely interested in researching graphene for many possible applications, including solar power and in stealth technology. Can you even remotely imagine, just what a massive benefit it would be to the military, if planes were capable of weighing dramatically less or that they could fly virtually invisible, and that's during the daytime. The weight aspect alone would allow for a much larger payload and in military terms that could equate into an increase in weapons. At this point there are so many possibilities it is difficult to know just where graphene could truly take us.

Much has been made of graphene's potential. It can be used for anything from composite materials - like how carbon-fibre is used currently - to electronics.

Since its properties were uncovered, more and more scientists have been keen to work on projects. About 200 companies and start-ups are now involved in research around graphene. In 2010, it was the subject of about 3,000 research papers.

Samsung has been one of the biggest investors in research, in collaboration with South Korean Sungkyunkwan University. It has already demonstrated a 25-inch flexible touchscreen using graphene.
"[Samsung has its] own roadmap where they believe there will be a dozen products [on the commercial market] using graphene in the next five years," says Prof Geim.
But companies like IBM and Nokia have also been involved in research. IBM has created a 150 gigahertz (GHz) transistor - the quickest comparable silicon device runs at about 40 GHz.
"In terms of the speed of the transistor, we currently see no intrinsic limits into how fast it can go," says Dr Yu-ming Lin, of IBM.
"We've already found a number of [problems] that have to be resolved but I don't think it's limited by the intrinsic properties of graphene."

We will notice new breakthroughs, in regards to all this intense research being done with graphene, on an ongoing basis. Here is a good example of this, http://www.nanowerk.com/news/newsid=21658.php.

I would like to return to the question asked in the heading of this article. Let us consider that Focus Metals has what truly is a world class deposit at Lac Knife. With full expectations of having this project being brought to NI 43-101 standards, and that is with little to no fluctuation in the historical values, this company has the potential to surpass even the wildest of estimations in regards to value. This becomes easily attainable if we consider that the price of graphite, 95% pure flake, is at present in the $2,500 to $3,000 per ton range, and also taking into consideration the fact that Focus Metals has 8.1MT with the potential to increase this by up to double. This is due to the property being open in several directions. Now if you want to see real value, let's take that 95% pure flake and process it to 99% plus purity, and we now have what it takes to produce graphene that meets the expectations and requirements of the technology sector as well as the research centers. Remember when I said that this type of graphite goes for approximately $50,000 per ton, and go ahead, get your calculator cranked up. I have followed some very exciting companies, but none that have shown me this much potential. What I find really intriguing is the fact that this is a product that has just started to become known, but in the words of the scientists who received the Nobel Prize in Physics for their part in graphene,

"It has been just over 2 years since graphene was first reported and, despite remarkably rapid progress, only the very tip of the iceberg has been uncovered so far. Because of the short time scale, most experimental groups working now on graphene have not published even a single paper on the subject, which has been a truly frustrating experience for theorists. This is to say that, at this time, no review can possibly be complete.
Nevertheless, the research directions explained or pencilled here should persuade even die-hard sceptics that graphene is not a fleeting fashion but is here to stay, bringing up both more exciting physics and, perhaps, even wide-ranging applications."

There is one other aspect that will, in my opinion, bring untold value to Focus Metals. That aspect is the joint venture Focus Metals CEO, Gary Economo, made public in a news release dated March 2, 2011. The impact this joint venture could have on Focus Metals is huge and is completely focused on graphene research and the licensing of any intellectual property obtained from research done by the joint venture.  http://www.focusmetals.ca/news-focus-metals/mar2-graphene-technologies.html

For those who might find this as an attractive investment possibility, I urge you to do your own due diligence. I suggest starting at the companies website which can be found at www.focusmetals.ca. Here is another link that will be of much interest and possible use, http://arxiv.org/ftp/cond-mat/papers/0702/0702595.pdf

In my opinion Focus Metals has displayed only the tip of the proverbial ice-berg at this time in terms of value. As this research on graphene progresses, and undoubtedly makes breakthroughs, the value will only increase. In the event of many uses being proven the value will start to rise exponentially.
For disclosure purposes I have not received any compensation of any kind for this post. I do own shares of Focus Metals.

Monday, June 6, 2011

Focus Metals and a look at the who what where and when

I would like to bring more familiarity to Focus Metals (TSXV:FMS). This company has so much going for it at this point it is almost overwhelming to know where to start. For instance the fact that the company had a share float consisting of 76,244,000 shares as of Feb.21, 2011. Focus Metals has since closed a C $20M financing which closed on May 12, 2011,  http://www.focusmetals.ca/news-focus-metals/may12-20-million-bought-deal-private-placement.html, this now brings the fully diluted share float to 107,444,000. From this perspective this company is grossly under-valued. When we look at the historically defined deposit, which has nearly gone into production not once but twice, and consider the sources of the interpreted data, it is without much difficulty that we foresee the NI 43-101 and scoping study, forthcoming in the upcoming weeks, as being more of a formality than as something that may contain surprises. Historically according to studies done to define the deposit in the past, Lac Knife holds 8.1MT grading at nearly 17% carbon content. http://www.focusmetals.ca/investment-factors/index.html.

The much anticipated NI 43-101 is fully expected to prove this part up, but now let me tell you what really makes this a unique project. The Lac Knife project could hold potentially much more than the expected 8.1MT. This deposit is open in several directions and at depth. It would only be reasonable to believe that there is no doubt much more graphite to be discovered by continued drilling on this project. Obviously this leaves Focus Metals in possession of a world class deposit, and that this deposit could have potential to grow significantly, but what about the grade. Most graphite deposits around the world have a carbon content of between 2% and 5%. Lac Knife has historically been graded at nearly 17%.  Our 17% concentration of graphite means we need six tons of resource to process a ton of graphite compared to 40 tons for a competitor at 2.5% concentration. Not only do we benefit from that factor in production quality and costs, but also our shareholders ultimately benefit in value. As you can see this leaves Focus Metals in an excellent position to take advantage of the leverage available from a profit standpoint. The market will establish prices for large flake graphite, so that is a given. Where we excel on a competitive basis is the cost-mitigating nature of graphite concentration. In our worst-case scenario, we foresee profit ratios in the 80-85% range at today’s market prices.

At $2500 to $3000 per ton for 95% pure flake today, we see a blue sky investment opportunity based on price. I think most people would have to agree this is truly a most unique investment opportunity, but what if I was to tell you that graphite that has been purified to 99% plus currently fetches a very appealing price of $50,000 at the retail level. This is graphite that has undergone further processing to bring it to 99% plus, and is what is required for use and research in the technological applications. As you can see this could turn Focus Metals into an extremely profitable company. Further to all the above noted positive details, might I add that Focus Metals has already released news that they have formed a joint venture, with the purpose of researching graphene application possibilities. This was announced by a news release dated March 2, 2011,  http://www.focusmetals.ca/news-focus-metals/mar2-graphene-technologies.html.

Graphite and graphene have been called "a product that could change an era". In a literal sense this would appear to be very true. Graphite demand has risen sharply and is forecast to continue to fall into a deficit in regards to availability. The amount of research being initiated by so many companies, as well as numerous governments, in respect to an almost endless list of possible applications or uses, definitely leaves one in expectation that this truly could be a product that will define an era. Much like steel had a similar effect on the world at the time of its invention, and plastic also had this effect, graphite and graphene in my opinion most likely will become the next era forming product.

Focus Metals, as I pointed out at the start of this article, has a little over 100 million shares fully diluted. This number may cause concern for some but I would offer this in answer to those concerns. Focus Metals currently has C$25M plus in the till, so they are well funded going forward. Focus Metals has tremendous potential in my opinion, and what will add much to the companies value, as well as shareholders value, is the fact that the company has claimed they are fully committed to becoming a mine to market business. This added to the possible potential arising from the JV, in regards to licensing any graphene products that come to fruition from the JV, leaves one nearly overwhelmed at just how huge the potential really is for Focus Metals. I think that in order to get a good feel, for just what the potential is, people should check out the latest presentation Focus Metals CEO gave this last weekend at the Cambridge House Critical Materials Investment Symposium,  http://www.focusmetals.ca/technology-applications-investment.html. With management displaying nothing short of complete dedication to bring this company to the next level, it is noteworthy to mention that Jefferey York has purchased shares on the open market, http://canadianinsider.com/coReport/allTransactions.php?ticker=fms
It is also important I believe to mention that none of the management has sold any shares, excluding ex-management. This is a true show of faith in Focus Metals.

Kwyjibo. Kwyjibo is a rare earth project with some assay results back.  http://www.focusmetals.ca/news-focus-metals/dec8-surface-grades.html. With 8 rare earth elements, iron, and copper it will be quite interesting to see further drilling results from this property.

Focus Metals is such a unique company in so many aspects. The profit potential here is highly uncommon,I would suggest to those who are interested in this company to do some due diligence and make your decisions accordingly. The companies website would be an excellent starting point, and can be found at www.focusmetals.ca. Focus Metals has started to garner a lot of attention that it previously did not seem to have. As this continues it could cause some abnormal trading patterns at times, but at this point I foresee Focus Metals bringing some extra-ordinary profits to those who are invested.

For disclosure purposes I have received no compensation of any kind for this post. I own shares in Focus Metals.



  

Wednesday, June 1, 2011

Is Hathor Exploration.... Part 2

Hathor Exploration (TSX:HAT) just announced in a news release recently that they are announcing a bought deal flow-through financing for slightly more than $13M. http://www.hathor.ca/i/pdf/2011-May27-NR.pdf

This should be helpful in their exploration efforts, as Hathor continues in their attempts to prove up an ever-increasing deposit size at their Athabasca Basin project called Rough Rider. This has been expanded to now include Rough Rider East and Rough Rider Far East zones. The latest release that gives us an indication of just what Hathor holds was released May 17, 2011, and can be seen here, http://www.hathor.ca/i/pdf/2011-05-17_NR.pdf


Now with this appearing to be solid positive news, there is yet another impact that is showing an effect on most, if not all, of the uranium sector. This is evidenced by the closing prices of several companies in this sector. These are the closing prices for May 31, 2011.
TSX:CCO  Cameco Corp.  $27.08     Net change -0.28   Change in %   -1.02%  Volume  1,212,756
TSX:DML  Denison Mines Inc. $2.25  Net change -0.14 Change in %  -5.96%  Volume  1,006,552
TSX:PDN  Paladin Energy Ltd  $3.25  Net change -0.04 Change in % -1.22%   Volume   704,935
TSX:UUU  Uranium One Inc.  $3.55   Net change -0.15  Change in %   -4.05%   Volume  2,989,791
TSX:URE  UR Energy    $1.58      Net change  -0.08    Change in %  -4.82%      Volume  340,334
The reason for this latest setback, following the Japan crisis is news just released from Germany.
Uranium producers were impacted by yet another aftershock, tumbling on news that Germany had officially decided to phase out all of its nuclear power plants by 2022. Chancellor Angela Merkel has decided to phase out nuclear power plants, currently a quarter of total electricity production, over the next decade.
This move comes as a precautionary measure in the wake of the problems at Japan’s Fukushima plant after the March earthquake and tsunami. The high-risk move means the German government will switch off eight of its 17 nuclear plants this year and close the other nine by 2022. According to the World Nuclear Association, Germany's 2011 annual uranium requirement is 3,453 tonnes, or 5% of the world's total demand.
To offset these significant closures, the country plans to aggressively pursue a renewable energy phase-in and raise the share of energy produced by greener sources by 50% from the current 17%. Commenting on the plan, Merkel said, “To generate the electricity of the future we need to give our energy system an entirely new architecture.” The decision by Merkel’s Christian Democrats and their coalition partner the Free Democrats comes as a big blow to Germany’s “big four” nuclear power companies, RWE, Eon, Vattenfall and EnBW. Not only could this hurt earnings, it will likely reduce their capacity to invest in new projects to realize the government goal doubling renewable energy’s contribution to total electricity production over 10 years. While Germany's decision may impact uranium demand in the near term, its worth noting that it Germany did not have any new planned nuclear additions, so this should not have a material impact on the long-term total demand story for uranium.
The news out of Germany, seemingly took the shine off the last week's news, that Traxys had concluded a contract with FluorB&W for the purchase of the full quantity of UF6 that FBP expects to receive in return for clean-up services at the Portsmouth uranium enrichment facility in Ohio. Negative press for uranium/nuclear producers has increased awareness in renewable power producers – Canaccord Genuity’s top renewable picks include: Algonquin Power (AQN) and TransAlta (TA) – renewables represent 25% of its generation capacity.
It is only to be expected that the market might react in the way they have to-date. What I would like to consider is the fact that Germany had no plans for any new nuclear reactors and as such this should not have a material impact on the long-term demand for uranium. If there is no material impact expected long-term, then why would we expect uranium to drop in the long term.

Cameco, which is one of the largest, if not the largest, uranium producers globally. Cameco CEO Jerry Grandey has been reported to say that his company still views doubling their uranium production by 2018 as making sense. http://www.cbc.ca/news/canada/saskatchewan/story/2011/05/06/sk-cameco.html
I think that this is a relatively accurate view looking forward, and even more so if Germany's latest move runs into complications with supply issues connected with rare earth elements, which at present are not only very expensive, they are approximately 95% -97% Chinese controlled. They also happen to be on an export limit currently. With no other country having the facilities to separate the various elements at present, I would say it is quite feasible to believe that there may well be some dips in uranium prices.

The biggest need is electricity to support the 50% of the world's population that now lives in cities, as well as provide cheap and reliable electricity for manufacturing, especially in countries where exports are the main component of wealth generation. There's a lot of power generational infrastructure going up, and it never seems to be enough. China was putting up one coal fired power plant a week, and after a brief slowdown in new projects, is aggressively investing in power generation again. There are 27 nuclear reactors under construction, and China is planning another 25-30 more by 2020.

http://www.world-nuclear.org/info/inf17.html

There will always be some who raise concerns over the safety of nuclear power, however, I feel confident that nuclear power will continue to generate power for many years into the future. As research continues on how to build safer designs, and technology increases, nuclear power seems to be here for quite some time. Considering all this, leads me to the question that this post originally set out to ask, and that is what does the future hold for Hathor.

I would suggest that Hathor will do well as they continue to expand on the size of their resources. There are a few scenario's that could prove to be possible. Cameco, who is obviously in a position to start paying attention to a company such as Hathor, would make a likely company looking to grow by acquisition. Another company that could quite possibly be eyeing Hathor is Areva, as could be Kepco. The biggest draw back I see with the Kepco scenario is the fact they are likely to run into resistance from either Cameco or Areva. Both of these companies have projects in close proximity to Roughrider. Hathor of course could opt to attempt to prove up enough resources to make it feasible to start up their own mine with mill. The one thing that Hathor has on it's side for now is the fact that most of the biggest players, such as Cameco and Areva, would prefer to let the smaller companies do the exploration, which as we all know is the higher risk portion of developing a mine. I would not be surprised to see either of these companies take a run at Hathor, if they continue to expand their resources. I also see the management of Hathor being completely capable of taking this project to an actual mine, pending of course, on sufficient resources being discovered. As to which decision would be the most appropriate, is at best, very difficult to say at this point. I would expect that if Hathor can triple to quadruple their resource size and still manage to avoid any takeover, this company could become a significant miner. I do feel that Hathor has many positives going for them, and although there may be some minor pullbacks here and there, Hathor stands to gain much in the long-term.

For disclosure purposes I have received no compensation of any kind for this post. I do not own shares in Hathor Exploration at the time of this post. I may enter into a position in the near future.