Lomiko Metals is Hardly a Play on Graphene
In a previous article, we published in August this year called Investing in Graphene, we highlighted the fact that there are not many opportunities for investors to invest in graphene pure-plays just yet. There are a bucket of graphite junior mining companies that are quick to mention the potential of graphene, however, it is the production of graphene that is difficult at this time, not the acquisition of the raw material graphite at present. Some graphite junior mining companies and their respective market caps include Focus Graphite ($59 million), Northern Graphite ($31 million), Graphite One Resources ($17 million), Strike Graphite ($6 million), Galaxy Graphite ($1.6 million), Mason Graphite ($62 million) and the list goes on. One graphite junior mining company that has recently decided to add a 3D Printing twist to their value proposition is Lomiko Metals (CVE:LMR).
Lomiko Metals Inc. is an 11 million market cap company that trades on both the TSX Venture Exchange (CVE:LMR) and the Over-The-Counter (OTC) Exchange (OTCMKTS:LMRMF). The company owns exploration rights to 2 properties but neither of these properties are producing, and consequently, there are no sales or revenues to report. The company’s financials which go back to 2007 show no revenues have ever been reported and over time Lomiko has gone from 15 million shares outstanding as of 2008 to 80 million common shares outstanding as of 2013. As of April 30, 2013, the Company had cash and cash equivalents of $8,118 to settle accounts payable and accrued liabilities of $251,413. Lomiko has 2 mineral property rights which they list as assets valued at a mere 1.2 million, and as of April 2013, a total of $1 million was recorded for acquisition and exploration expenses on these properties, all of these costs which have been deferred.
The company’s most recent 6-month operating expenses can be seen below:
It is interesting to note that 36% of Lomiko’s expenses were for “advertising and promotion”. It is also interesting to note that the “management and subcontract fees” representing 20% of expenses were payments made of equal amounts to 2 companies; the first to a company controlled by Paul Gill, President and CEO and the second to a company controlled by Jacqueline Michael, CFO.
With all the graphite junior mining companies that exist, many with much more capital available, it is difficult to see what Lomiko’s value proposition is when it comes to investing in graphite, much less graphene. Lomiko’s share price enjoyed a 170% increase over the last few days, no doubt aided by the announcement their intent to supply graphene for “graphite 3D printing” to Graphene 3D Labs. It was also announced that Lomiko will acquire a 15-per-cent interest in Graphene 3D Lab, a newly formed entity created by Lomiko and Graphene Labs, by paying $50 thousand for 250,000 preferred shares in Graphene 3D Labs. This would give Graphene 3D Labs an implied current market valuation of only $333 thousand. In a future article we will take a look at a PowerPoint presentation detailing this partnership so far, along with the company Lomiko has partnered with, Graphene Labs.
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