Feature article December 19, 2016:
Saint Jean Carbon Inc.'s Graphene and Graphite Technologies Hold Potential for Billion Dollar Valuation
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Saint Jean Carbon Inc.
(TSX-V: SJL) (US: TORVF) (Frankfurt: WNFN) |
Share data, Capitalization, & Corporate info
Shares Outstanding: ~184.7 million (post recent financing)
Recently Traded: CDN$0.07/share (TSX-V: SJL)
52 Week High/Low: $0.085 / 0.025
Current Market Capitalization: ~$12.9 million Canadian
Corporate Website: www.saintjeancarbon.com
SJL.V's share price is poised for dramatic near-term upside revaluation.
- Mill currently under construction for manufacturing of spherical carbon coated graphite, a uniquely superior proprietary process that so impresses major lithium-ion car battery manufacturers it is expected to lead to large-scale offtake agreement.
- Strategic holdings of high-grade high-purity lump graphite properties located in Quebec and Sri Lanka.
- Multiple graphene and graphite related patents worth potentially multi-billions.
- Highly skilled and accomplished technical leadership; the Company's appointment of the top Li-ion battery expert in the world, Dr. Zhongwei Chen PhD, MSChE, BS, as Chief Technology Officer, affirms SJL.V at the forefront of next generation commercial applications of carbon science technology.
NOTE: Insiders buying; On December 13, 2016 SJL.V announced financing, two insiders took 23% of a unit financing -- a bullish sign when management has skin in the game and actively getting long. |
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Valuation Commentary:Saint Jean Carbon Inc. (TSX-V: SJL) (US Listing: TORVF) (Frankfurt: WNFN) is considered to be among one of the most advanced technology companies, if not the most advanced, in North America when it comes to graphene innovation. Importantly for shareholders is the near-term catalyst potential for share price appreciation, as the Company are forerunners to obtaining the largest offtake agreement for mass-produced spherical carbon coated graphite (SCCG) for the largest lithium-ion battery manufacturers (electric car/green energy storage). SJL.V has the materials, the people, the technology and knowhow to be a top-beneficiary in this multi-billion dollar industry. SJL.V's current market cap of C$12.9 million (trading at ~C$0.07/share) is minuscule compared to its potential, the value of the spherical carbon coated graphite patent alone has serious potential to result in a multi-billion dollar market cap in a very short time period. As the reality of the accomplishments and potential are understood by the marketplace, we expect shares of SJL.V to rise several multiples higher than its current price.
Over the last year SJL.V has filed several potentially revolutionary 100%-owned patents for applications of graphene, including a) the first superconductivity room temperature wire, b) a proprietary method for production of single layer (one atom thick) natural graphene with no impurities and without heat damage, c) production of diamagnetic graphene (which means it repels magnetic fields, in so being first in the world to temper/control graphene), d) a glucose meter that uses magnetic resistance graphene to instantaneously detect micro-changes via saline levels from tear ducts (once in commercial application it is expected to be ideal for instantly alerting diabetics). That is just a sampling of patents, the Company has ~35 other secondary and tertiary patent innovations in the pipeline.
As impressive as those inventions are for the future, currently ~75% to 85% of the Company's time and efforts are spent on the green energy storage and green energy creation side of its business as those have immediate real-world demand with serious near-term monetization potential. On the green energy creation side SJL.V has graphene photo cells in the lab yielding 100% light energy flow through efficiency, this holds potential to lead to a new paradigm for solar cells. On the green energy storage side SJL.V is rapidly advancing toward serious monetization with its first large-scale SCCG prototype mill now under construction for a major electric vehicle manufacturer. Its proprietary SCCG technology has efficiencies that dwarf what others are capable of and has so impressed lithium-ion battery manufacturers that it is expected to translate into an offtake agreement for the Company to supply raw materials, grind, shape, and coat 150,000 tonnes per year of spherical carbon coated graphite for 20 years, generating $350 to $500 million/per year in revenue at capacity.
Additionally on the energy storage side of the business, the Company is involved in a collaborative effort that leverages its patents and expertise. This November-2016, within two weeks of Saint Jean announcing it has appointed the top Li-ion battery expert in the world, Dr. Zhongwei Chen PhD, MSChE, BS, as Chief Technology Officer, Saint Jean Carbon announced it is building the world's first recycled high performance Lithium-ion battery in cooperation with their main battery manufacturing partner. The battery will use recycled/upcycling material from an electric car power pack and the upcycled anode material from Saint Jean Carbon. This battery will prove the life cycle of the raw materials can be extended by being re-used over and over again, and help position Saint Jean as an integral player in the future of the energy storage sector [see related November 24, 2016 news release entitled "Saint Jean Carbon Building a Recycled High Performance Lithium-ion Battery"].
The Company was formed ~3 years ago to capitalize on the opportunities and advancements in graphene research and the growing enthusiasm for electric vehicles (which rely upon large quantities of specialized graphite for the anodes in lithium-ion batteries). CEO, Paul Ogilvie, is an individual rooted in technology success and also has a history of successfully advancing graphite mining projects to high valuation takeout. SJL.V is first and foremost a technology business, its graphite mining holdings should only be viewed as strategic back-up as the Company's M.O. is to treat raw materials as a commodity that can be sourced globally according to spec to feed end applications of the Company's technology. Everything the company does is geared toward ensuring it will have a part in meaningful final applications. The Company has built relationships at the highest level of research in the world and is on the forefront of innovation that will transform the future.
Fig. 1 Graphene layers, they exist 2 dimensionally. |
Graphene was only first isolated ~10 years ago. It is a thin layer of pure carbon, bonded together in a hexagonal honeycomb lattice. It is the thinnest compound known to man (at one atom thick), as well as the lightest. It is also the strongest compound discovered (100-300 times stronger than steel), is the best conductor of heat at room temperature, and also the best conductor of electricity known. Graphene has potential applications across a wide range of industries. Saint Jean is one of the most advanced in terms of production of graphene and in mid-2016 the Company was requested by the National Research Counsel of Canada to submit samples and help set the national standard for graphene production and quality. To date we are not aware of anyone else managing to meet the call to submit samples.
Intellectual Property Ownership
The patents we see contributing most towards an appreciation of share price value near-term are the two for spherical carbon coated graphite, they are 100% owned by St. Jean Carbon Inc. There are also large number of patents that the Company co-owns 50:50 with universities, these often do not get coverage in press releases. Anything the Company does with Western University, or Waterloo, and others are considered shared 50:50; SJL.V shares in ownership and (eventual) royalties 50:50, however important to note is that SJL.V retains exclusive first right of refusal to use it. On the patents that are 100% SJL.V owned, anything the Company does with the university that is done on an 'engagement basis', which means the Canadian government pays the university for SJL.V, the Company owns the technology and shareholders benefit from the research without the burden of dilution. To date on patents submitted no one has come forth and challenged or said they are doing it too. Important to note is that most of the R&D is accomplished via without shareholder dilution (e.g. See December 15, 2016 news release entitled "Saint Jean Carbon and Western University Receive NSERC Grant").
Overview of why Saint Jean Caron Inc. (SJL.V) has potential for >100X market cap revaluation
Fig. 2. (above) Tesla car, Li-ion battery array, and inset microscope image of ~20 µm size shaped graphite dust. -- Producing anode-grade graphite with 99.875% purity is complex. The end-cost is not so much the material but rather the high-tech shaping, coating, and purification process. A single EV battery requires ~25kg (55lb) of graphite for the Li-ion anode. |
1) Spherical Carbon Coated Graphite - 100% Owned
The lithium-ion batteries for manufacturing plants being built NOW to meet expected demand will require steady and reliable supplies of spherical carbon coated graphite, and no one in the world is able to produce and deliver at sub US$2,000 per tonne except for Saint Jean Carbon Inc via its proprietary patented (pending) technology. The Company is targeting securing an offtake agreement for its technology, and are bound by confidentiality and non disclosure agreements from saying with who, but most people looking at their specifications of material are logically immediately able to take the leap and say its Tesla. Plus news of SJL.V appointing Dr. Zhongwei Chen PhD, MSChE, BS as Chief Technology Officer is very telling as he is known in the industry as the foremost expert on Li-ion battery technology in the world and consultant to several majors. The end result, bottom line, should see Saint Jean Carbon Inc. profitably get to companies in the like of Tesla in Nevada and see US$1,950 per tonne spherical coated carbon graphite and make US$600 to US$700 on every tonne.
Saint Jean Carbon has developed an exclusive patented manufacturing system that creates the material; jet-mill/grinding it, then shaping it, and coating it, all in one go, and then applying it directly to the anode that goes into a lithium-ion battery. The Company's mill is a process that will be situated at (or attached to) the battery plant facility of the electric vehicle manufacturer, in say Nevada. The offtake deal will involve SJL.V supplying the raw graphite materials according to spec, either by sub-contract or mining it themselves (if need be as a back-up); the company has well vetted detailed engineering models involving ~120 small high-grade high-purity graphite pits on its own properties. Graphite material that goes into lithium-ion batteries is 99.875% pure, it has no dampness to it, and all the impurities are eliminated from it. SJL.V has developed a system that crushes and grinds its ore, and air classifies it through a windowing system, further grinds it, and loads it to railcar for delivery to its processing mill. Ideally the Company can avoid using its own properties; SJL.V has been offered material by two very large Chinese producers of graphite at a base cost that would be the same as (or less than) the Company's cost to mine here in exchange for a cut of the high-graded material. SJL.V's strategy is to use others graphite first, if possible, as graphite is basically a commodity and the real value in graphite for the Li-ion anode is in its technological process. Regardless of the source, SJL.V will ensure the mine signature and finished material DNA are compatible, as unique and exacting specifications are required for all materials to work together in the end battery.
Leaving nothing to chance, SJL.V is retaining full control of the process, at least for this first offtake; the Company is expected to own the mill equipment, lease space (for free) at the manufacturer, supply its own raw material, and man its own equipment. There is an expertise that SJL.V brings to the table that no one else on the plant has proved they can replicate and majors have taken notice.
Fig. 3 (above) - Patent diagram for shapeing graphite.
The patent to spherically shape graphite and carbon coat graphite holds extreme latent value. Prior to SJL.V's patented process, and currently the way it is done today, is through mechanical fusion; think of a spec of graphite that is ground down to 20 µm (µm is a micrometer, A.K.A. micron, = one millionth of a meter), mechanical fusion grinds graphite without ever touching it, it jitters itself to shape, it works well but is seriously inefficient. What SJL.V created is a horizontal system that uses devices similarly to ailerons on an airplane that spin and are able to process voluminous amounts of material, yielding the same effect as mechanical fusion without the inefficiencies, enabling SJL.V to make per piece of mill equipment ~5,000 tonnes per year vs. requiring 50 pieces of equipment (using current technology) to produce that same amount. Much more efficient and economical.
Fig. 4 (above) - Patent diagram for coating graphite.
The milling process is actually comprised of two separate patented processes, one for shaping (as explained above) and one for carbon coating the natural graphite. A lithium-ion battery with natural graphite will outperform a synthetic graphite battery by about 35%, that's good, however natural graphite starts to break down on the edges of the anode. This problem is resolved by putting a carbon coating on the natural graphite particles, its one of the key sciences in a lithium-ion battery. The carbon coating is applied in a chamber via plasma and heat pulling apart some synthetic graphite and dropping the atoms of the carbon onto the graphite. The result is graphite that stays together on the edges of the anode. SJL.V's exclusive patent involves doing the process in a pressurized chamber and getting the material charged so it will magnetically attach the carbon coating to the graphite at high speed.
In the drawing you can see how the two pieces of equipment go together into one complete no man touch system from one end to the other. The big checkpoints here are that SJL.V has created a piece of equipment that will do a process at extremely high speed that no one else does and do so more efficiently from an energy standpoint, and a handling standpoint (no human touch).
Related releases
October 25, 2016 - Saint Jean Carbon Commission Preliminary Economic Assessment [click to see full copy from source]
May 19, 2016 - Saint Jean Carbon Starts Commercial Construction of Spherical Coated Graphite Mill[click to see full copy from source]
Excerpt:
OAKVILLE, ONTARIO--(Marketwired - May 19, 2016) - Saint Jean Carbon Inc. ("Saint Jean" or the "Company") (TSX VENTURE:SJL), a carbon science company engaged in the development of natural graphite properties and related carbon products, is pleased to announce the Company is starting to construct the first full mill and finishing line in North America. The design for each line can be scaled up easily to produce 6,800 metric tonnes per line per year of spherically shaped, carbon-coated graphite. The primary use of the finished materials is for the Lithium ion batteries used in electric cars. The mill design is also modular and can be setup directly at the battery manufacturing plant, eliminating over-handling, contamination, moisture fluctuations and impurity intercalation.
The Company announced in the fall of 2015 the filing of a number of patents and research and development work with two universities. The results of the projects have created the necessary information and engineering to build the first production line. The first line will be built to produce an average of 5,000 metric tonnes per year with less than 5% waste. The equipment that is under patent application can make various sizes and purities to meet all of the stringent customer demands. Over the last two years, the company has worked on two detailed customer specifications; the success of meeting the specifications has lead to the decision to build the first full production line in North America.
Paul Ogilvie, CEO, commented: "We are very pleased and excited to build the first of what we hope to be many production lines, up and running in the near future. We feel with the demand for the material, and the excellent work by both universities, industry partners and the consultants to the Company will help prove and support our overall strategy to be the first in full production and the first to supply material to this burgeoning industry. The extreme level of quality and significant lack of impurities has created excellent coin cells results from our material. We hope this breakthrough leads us to a supply agreement with our industry partners."
The highest grade/quality of coated spherical graphite sells for *$1,950.00 USD per metric tonne (FOB battery plant). Ideally, the design will produce high volume with very little waste. Further, as no harsh chemicals or high heat to purify the material will be used in the production of the finished material, the line will not damage the high order of carbon. Only material that does not need upgrading will run through the line. The company will release progress statements.
*The company is presently in negotiations with two battery manufacturers, to supply graphite spherically shaped and coated at a price point of $1,950.00 USD per metric tonne.
...click here for full copy from source |
November 9, 2015 - Saint Jean Carbon Files Patent for Spherically Shaping Graphite for Lithium Ion Batteries [click to see full copy from source]
The numbers
To build the module for carbon coating spherical graphite, depending on the capacity and size fractions sought on the materials, the costs are of a low of ~US$3.9 million to a high of ~US$5 million. SJL.V is looking at a capacity now, as announced, of between 6,000 and 7,500 tonnes per year.
How big does this get? The modules are scalable. The offtake is for 150,000 tonnes per year for 20 years, and depending on the different size of materials and different engineering for them, there is between $350 million to $500 million per year from just one battery plant. SJL.V is aiming to net out ~US$600 to US$700 on every tonne. The offtake will likely restrict services to competing car manufacturers, but not solar plants (which happen to use more graphite than cars), and other select battery manufacturers.
Reality of production is fast approaching:
The mill is being built for an electric car company as a prototype/first-shot at proofing what is going on their anodes. The mill will continue as a rolling start to bigger numbers. When the investment community figures out that the process to supply such specialized graphite material onto an assembly line of a manufacturer is beyond the ability of most ordinary graphite mining entities, because they don't have the technological expertise and knowhow -- SJL.V will be recognized for what its potential is as top-dog in its field. Right now the Company is building the mill for one car company, and that company has one battery manufacturer -- the mill was announced to build material that they are prototyping on their end so that in one year, when they say "let's get all these materials to play together", SJL.V is going to be at the party saying "We have our prototype mill built to take our concentrate material through for you". At that time the two pieces of SJL.V prototype equipment on their own, alone in operation, will be worth significant amounts of money.
Revenue growth to begin and won't stop, SJL.V will be valued as a different kind of entity:
SJL.V envisions in 2017 it should be able to produce from a low of 2,000 to a high of ~3,500 tonnes of spherical carbon coated graphite. Times that by $US2,000 per tonne.
In 2018 we would expect to see SJL.V produce ~18,000 to 25,000 tonnes.
2019 onwards; skies the limits. This one offtake on its own is for 150,000 tonnes per year for 20 years. The ramp up from electric car companies and the Panasonics of the world are very bullish with straight line projections. The problem with forecasting a phenomena is that it is difficult, could be less, it could also be more. But what we do know is that the demand for SJL.V's proprietary technology will be immense.
2) World's First Recycled High Performance Lithium-ion Battery - Collaborative project with battery manufacturing partner
SJL.V announced it is building the world's first recycled high performance Lithium-ion battery in cooperation with their main battery manufacturing partner. The battery will use recycled/upcycling material from an electric car power pack and the upcycled anode material from Saint Jean Carbon. This battery will prove the life cycle of the raw materials can be extended by being re-used over and over again, and help to further position Saint Jean as an integral player in the future of the energy storage sector. The Company is involved in numerous collaborative efforts that leverage its patents and expertise. This announcement, regarding the building of the recycled high performance Lithium-ion battery, falls on the heals of Saint Jean announcing it has appointed the top Li-ion battery expert in the world, Dr. Zhongwei Chen PhD, MSChE, BS, as Chief Technology Officer.
Excerpt of recent (November 24, 2016) news from Saint Jean Carbon:
Saint Jean Carbon Building a Recycled High Performance Lithium-ion Battery
OAKVILLE, ONTARIO--(Marketwired - Nov. 24, 2016) - Saint Jean Carbon Inc. ("Saint Jean" or the "Company") (TSX VENTURE:SJL), a carbon science company engaged in the design and build of energy storage carbon materials, is pleased to announce that Saint Jean Carbon and their battery manufacturing partner will build a high powered full scale lithium-ion battery with recycled/upcycling material from an electric car power pack and the upcycled anode material from Saint Jean Carbon. This will be a world first and hopefully will provide results that prove the life cycle of the raw material can be re-used over and over again. Ideally, greatly reducing the demand for continued mining and helping the environment significantly.
The project will have a three stage approach: 1) Using proprietary and patented systems for dismantling and separating the chemistry and hard materials. 2) Design and re-engineering the surfacing of the raw materials. 3) Construct two identical cells, one with new material and one with upcycled materials. Both cells will be tested to over 10,000 cycles; this will create the most realistic sampling test results.
In the future having the ability to take recycled materials, reengineer them and repurpose to build a high performance lithium-ion battery (HPL) would be a first and would greatly change the way we look at the raw material chain in energy storage applications and how the raw material will affect the cost of electric vehicles. The outcome, if successful will be step one in a multi design build project that would hopefully see a test vehicle built using the batteries.
Paul Ogilvie, CEO, commented: "The focus to work together to create a fully functioning upcycled battery is really a great opportunity for all parties involved, and aligns perfectly with our overall strategy. We have always had concerns about the significant amount of raw materials needed for lithium-ion batteries, frankly; making the environmentally sound energy storage devices, not so environmentally friendly when you dispose of them. With our technology and the knowledge strength within our team, we feel strongly, very promising results may come from the project. We look forward to presenting the results and any milestones as they get completed."
The company anticipates the project will take six months to complete and will issue updates periodically.
.... click here for full copy from source
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3) Energy Creation - Co-owned with Western University
SJL.V is working on photo cells with 100% flow through efficiency and will soon publish a related white paper for peer review. A one atom thick piece of graphene is actually one sheet of crystal clear carbon, the basic building block for diamonds, but unlike diamond though graphene is highly conductive, and is shaped like a lattice of linear honeycombs, it is two dimensional but one atom thick and the only thing in the world like it. If light is ran through this clear mass, the light enters the honeycombs and bounces off the structure creating equal (and often higher) power out the other end to be captured. SJL.V believes from the lab pieces it has produced that this technology has potential to eventually be refined to the point the Company can produce a small photo cell, about the size of a few fingernails, with potential to generate energy at the same rate as what is now outputted from something the size of a small car.
Aside: On the forefront of perpetual energy? Other scholars around the world have theorized that on an atomic level with graphene it is possible to generate energy at 120% to 135% out the other side. Indeed that is what SJL.V has observed in the lab (on an atomic level). The reason SJL.V tempers its descriptives at an impressive 100% throughput on its graphene solar cell technology is because it is not known if the phenomena of generating energy at a greater rate than going in is possible to occur on a large cell scale. As you can imagine though, the fact researchers are able today to create energy at an atomic level is exciting. |
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