Alabama Graphite's In-Ground Graphene
One of the major side stories to the graphite investment thesis is the graphene investment thesis. Graphene is a specialty product manufactured from graphite that can be applied to a myriad of technologies to enhance their performance. Specifically, graphite consists of layers of single-atom thick hexagonal carbon crystals, while graphene consists of a single layer of graphite.
In March Alabama Graphite (OTCQX:ABGPF) announced that it had found "naturally occurring graphene" in the ground. By the definition of graphite given above (admittedly a crude one) this is true. But it follows from this that any company that has a flake graphite deposit contains single-layers of graphite (aka "graphene"). So in that respect Alabama Graphite's deposit is hardly any different from the others.
But the misconception here goes deeper. Graphene's value is as a material additive that enhances other materials' various qualities (lightness, conductivity...etc.). This means that "raw" or "in-ground" graphene has very little value, and that the proper value-add claim would be that the company has a product in the ground that can cheaply be manufactured into industrial grade graphene. It follows that the company's claim -- despite its validity in a loose definitional sense -- is virtually meaningless.
It is further worth noting that the graphene market is incredibly small and specialized, and we don't think that any graphite company can see a substantial rise in sales should it have a foot in the door to the graphene market.
Management has since stepped away from this claim, which is absent from the recent corporate presentation.