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Far East Capital Limited: The Investors’ Guide to Graphene

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According to Far East Capital Limited:

https://personal.crocodoc.com/tLpe9bu

February 2015

The Investors’ Guide to Graphene

“Disruptive Technology that is Opening the Door to a New Age in Industry”

Investment Perspective: Graphene has been talked about in glowing terms with scientists suggesting confidently that it is the key to the future of almost all materials. So revolutionary are its qualities that they even talk of the “graphene age”. The most common reaction of investors is that it is “too good to be true”, but beware of cynicism that may blind you to the opportunities

Its disruptive qualities are one consideration, but investors want to know what the path to commercialisation looks like, and how they are going to make money out of this new material. There is no road map, but some parallels can be drawn with the path taken by the internet with graphene being to materials what the internet has been to communications.

To start with the internet was about emails. A major breakthrough occurred with the release of the first web browser in 1994, which turned the web into a user friendly graphical interface communications environment. As computing power increased and technology convergence accelerated we have experienced the development of smart phones and wireless-based applications offering flexibility and commercial opportunity and massive productivity gains well beyond what was first contemplated.

Commercialisation of graphene is poised to follow a similar trajectory. Initially it is all about strength and flexibility, and enhancing the materials to which it is added. Improved performance will lead to generational changes and new opportunities as industry starts to appreciate what is possible and consumers demand their insatiable expectations for more, better, faster … to be met.

On a higher level, the order of magnitude increase in conductivity that graphene promises will lead to continual advancements that will impact information transportation and communications, power storage, solar energy capture and many other applications that will be developed.

The graphene technologies are only just starting to leave the laboratory. Supply has been the constraining factor, but not the cost. While it is expensive, a tiny amount goes a long way, so that the benefits already outweigh the cost factor.

To date all the graphene in use is “made” via expensive laboratory processes. There is one exception though. Talga Resources has a very high-grade graphite orebody that enables direct production of graphene in a simple one step process, at nominal cost. This company could hold the key to rapid development of more graphene applications by solving the supply issue. Confirmation of this will depend upon pilot study results planned for 2015.

There are very few vehicles by which investors can participate in this new industry. It is too early to be dogmatic about which will be most successful, but it is not too early to be dipping your toe in the water. The advantages will lie with those who grow with the sector.