Group NanoXplore: Just Another Graphene Producer?

We’ve written 24 articles over the past 2 years about a miracle nanomaterial called graphene, the companies that produce it, the few publicly traded plays on graphene (AGM and Haydale), and potential commercial applications that are hitting the market. We also highlighted a fair number of “graphene stocks” that aren’t viable plays on graphene. After all that research, we can’t say we’re that excited about what has transpired so far. AGM is down -44% since their IPO and Haydale hasn’t fared much better, down -11% since their debut. Graphene enabled products seem hard to come by, and there’s even talk of a recently discovered miracle nanomaterial called “stanene” which could replace graphene.

While AGM and Haydale are publicly traded companies, we’re also aware of at least 5 private companies that are solely involved in the production of graphene. It seems like all this production capacity has been built for this miracle material yet nobody seems to be using it in any sort of quantity that generates meaningful revenues. Another private graphene producer, Group NanoXplore, came across our radar today when they announced that they have financed “two innovative graphene application companies”.

Click for company website

Group NanoXplore was funded in 2014 by Mason Graphite (CVE:LLG), a publicly-traded graphite junior mining company, which resulted in Mason owning 40% of NanoXplore. Mason isn’t producing graphite on their mining property, but just last week released the following promising feasibility study.

Mason_Study

For those of you fortunate enough to not have majored in corporate finance, essentially this means that if you give them $166 million, they’ll give it back to you in 2.6 years and then over the next 22.7 years they will give you an addition $186 million, all in today’s dollars and with an 80% likelihood. With these attractive terms, investors should be lining up to participate. However, we’re not here to talk about Mason Graphite because we’re not interested in graphite mining companies. We’re interested in graphene.

NanoXplore is a graphene producer like many we have covered before. As of February this year, their graphene production facility was in full operation with a capacity of 3 metric tons per year. NanoXplore claims that this is the largest graphene production capacity in Canada and, outside of China, one of the 5 largest in the world. The Company offers 7 products: 6 graphene powders and 1 unique graphite-graphene composite. Below are the financials for NanoXplore as of March 2015:

NanoXplore_Financials

While $111,000 isn’t much revenue to speak of over a 9-month period, at least they are generating something. With $1.2 million in cash on hand, it doesn’t seem that they were able to invest much in the companies they recently announced financing for; NanoPhyll and Two Carbon. Unfortunately, the sparse websites for these two companies contain very little information. NanoPhyll is simply described as “The Next Generation Solar Technology”. Two Carbon is said to be developing a “unique footwear out-sole” which is enabled by both 3D printing and graphene, and which will challenge “dated” outdoor technology like Gore-Tex.

Shareholders in Mason Graphite now own 40% of NanoXplore in a situation that is very similar to the relationship Lomiko shares with 3D Graphene Labs. You could buy shares in Mason for exposure to NanoXplore, or you could wait for NanoXplore to IPO, something they have stated that they intend to do. The question is, just what does NanoXplore offer that differentiates it from the multitude of other graphene producers doing the exact same thing? With their recent announcement, it appears that they want to cultivate spinoff companies to develop products using their graphene. Aside from buying a few domains and throwing up some flashy pages, NanoXplore will have to show that they can develop graphene enabled products that can compete with well-established brands like Gore-Tex, and then turn these products into revenue streams. That’s much easier said than done.

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