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IBC Advanced Alloys – EuroPac Analyst Provides Further Insight Into The Size of Lockheed Contract

/in IBC Advanced Alloys, Recent Posts/by Brad Dryer

In Tuesday morning’s MorningPac, Euro Pacific Canada’s morning newsletter to clients, Metals & Mining Analyst Amr Ezzat provides insightful information about IBC’s recently announced $2 million purchase agreement from Lockheed Martin. As mentioned in Monday’s news release, the “initial” purchase order for a critical cast component for the Electro-Optical Targeting System on the F-35 Lightning II is for “Lot 7 and Lot 8”.

EuroPac’s report cites a November 2013 article “F-35 Lightning II Program Status and Fast Facts”, published by Lockheed Martin (Click here to view). In the Lockheed report and in EuroPac’s note, the two pieces state that there arean anticipated 78 aircraft to be produced in Low Rate Initial Production (LRIP) 7 and 8.

As an exercise we undertook to provide dimension to the opportunity for IBC, 78 components plus parts in a contract worth $2 million (USD) equates to more than $25,000 per aircraft. Should IBC remain a supplier for this one part for the life of the program that is expected to see 3,000+ aircraft produced, the potential value of this project could be over $75 million (USD) in today’s dollars.

This calculation is an approximation based on the awarding of subsequent orders, pricing remaining constant, and many other factors.

The morning brief goes on to discuss the significance of the validation of IBC Beralcast®, a cast beryllium-aluminum alloy. The management team believes that this validation will likely “attract and fast track” sales in the aerospace and other industries.

Since Monday’s announcement, IBC has garnered considerable attention in the Canadian and U.S. media.

Here is a list of the coverage as of this writing:

• Wings Magazine – Sept. 8 “IBC to provide key components for F-35 Lightning”
• Business in Vancouver – Sept. 8 “Vancouver high-tech alloys makers lands F-35 contract”
• Canadian Manufacturing – Sept. 8 “Vancouver-based IBC lands F-35 component contract”
• Aluminum Investing News – Sept. 8 “IBC Advanced Alloys Lands $2 million Contract for F-35 Fighter Jets”
• American Metal Market – Sept. 9 “IBC lands F-35 cast components contract”
• Fabricators and Manufacturers Association, Intl. – Sept. 9 “IBC Engineered Materials to provide castings to Lockheed Martin for F-35 Lightning II”
• ExecutiveBiz – Sept. 9 “IBC Lands F-35 Beryllium-Aluminum Component Subcontract; Ray White Comments”
• Space Daily – Sept. 10 “IBC Engineered Materials to supply BeralCast Castings for F-35”
• Airforce-technology.com – Sept. 10 “IBC to supply BeralCast castings for F-35 fighters”
• GovConExec – Sept 9 “IBC Lands F-35 Beryllium-Aluminum Component Subcontract; Ray White Comments”