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Late last week, House Mountain Partners founder Chris Berry published a report on Argex Titanium titled “A Disruptive Technology Positions Argex For Success.” The note provides a good overview of the company and outlines what steps it has taken on its path to become a serious player in the Titanium Dioxide (TiO
2) space.
Key highlights from the report include the following:
- Proprietary technique known as CTL which produces high quality TiO2 from ilmenite ore through a solvent extraction process.
- The company plans to produce up to 50,000 tonnes of TiO2 from its plant located in Valleyfield, Quebec beginning in late 2015, with the potential to produce 100,000 tpy in the future.
- One of the benefits here is the scalability of the process and RGX’s ability to “start small” and scale up as market demand increases.
- As the company ultimately achieves a run rate of 50,000 tpy of production, revenues of up to US $95,000,000 per year are not out of the question.
- Writers note: I need to address one point in the report, it says that “Finalizing an off take agreement (with PPG) would most certainly smooth the way for successful project financing”. On June 27, 2013 Argex signed a significant and long term purchase agreement with PPG. The price and quantity were not disclosed publically; however management has stated that the gross value of the deal is worth hundreds of millions of dollars to Argex.
- Last year RGX announced the signing of a LOI with one of the largest chemical distribution companies in the world based in Europe to purchase up to 25,000 tpy of TiO2 produced by RGX.
- As always, the “devil is in the details”, so we don’t know prices or final amounts, but this, coupled with the PPG agreement, are substantial votes of confidence in the future potential of RGX.
To view the full report, please
click here.
About Chris Berry
With a life-long interest in geopolitics and the financial issues that emerge from these relationships, Chris founded House Mountain Partners LLC in 2010. House Mountain firmly believes that the emerging Quality of Life Cycle emanating from Asia is a "game changer" which will affect every one of us throughout the world for decades. With that in mind, the firm focuses on the intersection of three topics: the evolving geopolitical relationship between emerging and developed economies, the commodity space, and junior mining and resource stocks positioned to benefit from this phenomenon. Chris spent 13 years working across various roles in sales and brokerage on Wall Street before founding House Mountain Partners. He also co-authors a newsletter with his father Dr. Michael Berry, "Morning Notes by Dr. Michael Berry". He holds an MBA in Finance with an international focus from Fordham University, and a BA in International Studies from The Virginia Military Institute.
To check out House Mountain partners,
click here.