rally_logo_08272022.png

Independent Reviews for Venture Investors

NANO.TO - Closer.

Updated: Jul 7


Nano One Materials Corp. (NANO.TO) develops patented technology for low-cost production of high performance lithium ion battery cathode materials used in electric vehicles, energy storage and consumer electronics. NANO enables lower cost feedstocks, simplifies production, and improves performance of a wide range of cathode materials.


Its One-Pot process, coated nanocrystal materials and its Metal to Cathode Active Material (M2CAM) technologies address fundamental performance needs and supply chain constraints while reducing costs and carbon footprint.


Coverage was initiated January 2018 with notes on August 2019, May 2020, January 2021, September 2021.


News Releases


Sep. 30 - Enters Agreement with Global Automotive Company to Develop and Evaluate Manganese Rich Batteries:


i) Completed 2019 cathode development project and enters Memorandum of Understanding (MOU) with a Global Automotive Company; ii) MOU to focus on low cost, cobalt-free, manganese rich, LNMO batteries enabled by Nano One’s patented One-Pot process; iii) Multi-phase agreement includes performance testing and economic feasibility of cell development for potential electric vehicle integration; iv) Patented One-Pot process and M2CAM technology enables feedstock flexibility, lower costs, enhanced cycle life and sustainability improvements.


LNMO, also known as high voltage spinel (HVS) has great potential in lithium-ion batteries for electric vehicles, renewable energy storage and consumer electronic devices. It delivers energy and power on par with other high-performance cathodes and is cost effective because it is cobalt free, low in nickel and does not require excess lithium.


The name of the Global OEM and details of the project remain confidential in accordance with the terms of the MOU.


Oct. 4 - Co-develop Applications for High-Purity Manganese in Cathode Materials with EuroMaganese: i) Entered into a Joint Development Agreement; ii) Joint activities will focus on developing manganese products expected to be produced by Euro Manganese for use in cathode materials made by Nano One; iii) Manganese will be sourced by Euro Manganese’s proposed Chvaletice Manganese Project and refined into high purity manganese products; vi) Cathode materials will be made using Nano One’s patented One-Pot, M2CAM and coated nanocrystal technologies.


The manganese will be evaluated by Nano One in the formation of its innovative cathode materials including LNMO (lithium nickel manganese oxide) and nickel rich NMC (lithium nickel manganese cobalt oxide).


Oct. 14 - Results of Annual and Special Meeting: Receives Shareholder Approval for Amendments to its Articles.


Nov. 9 - Builds on COP26, Shifts LFP Focus to Domestic Markets and Joins Canada's Accelerate ZEV Alliance:


Nano One is shifting its LFP strategic direction to large emerging markets outside of China, starting in North America, and has ceased joint development activities with Pulead Technology Industry.Nano One is also pleased to announce it has become a member of Accelerate, Canada's zero-emission vehicle supply chain alliance.


Nov. 11 - Provides Quarterly Progress Update and Reports Q3 2021 Results: Highlights: i) Working capital of ~$54.0M; cash ~$54.6M; ii) MOU with global automotive OEM to evaluate manganese rich cathode materials; iii) Joint development agreement with Euro Manganese for the development of high-purity manganese in cathode materials; iv) Completion of SDTC and BC-ICE Milestone 2 and receipt of Milestone 3 funds; V) Engaged global engineering firm, Hatch, to lead an engineering study for expanded cathode evaluation project with a global automotive company.


Nov 11 - Provides Market Update: Nano One wishes to provide an update regarding the news issued today by Johnson Matthey about their plans to exit the battery materials business. At this time, the Company can advise that the news today was unexpected. As details and next steps emerge, Nano One will provide updates to the market.


Nov. 18 -Nano One Hires Experienced Cathode Commercialisation Lead: Mr. Denis Geoffroy joins Nano One to lead cathode commercialisation effort. LFP pioneer, cathode production expert and accomplished leader.; 25 years of lithium-ion battery experience including cathode active materials with Phostech Lithium and Johnson Matthey.


Mr. Geoffroy will focus on emerging opportunities starting with lithium iron phosphate (LFP) in North America. He will also support ongoing efforts on nickel-rich (NMC) and manganese-rich (LNMO) cathode materials.


Nov. 23 - Hires VP External Affairs: Mr. Adam Johnson joins Nano One to lead external affairs with governments.


Nov. 30 - Announces Retirement of Director and President John Lando


Dec. 2 - Announces Cathode Materials Expert Dr. Yuan Gao as Strategic Advisor: ii) Expert in lithium production and battery cathodes including LFP, NMC, LCO and LMO; iii) Appointment enhance Nano One's innovation, commercialization, and scale-up programs.


Dr. Gao is the Vice Chairman of the board of Pulead Technology, a respected producer of cathodes for lithium-ion batteries, having served as President and CEO from May 2014 to Sept 2019. In addition, Dr. Gao also serves as a member of the board of directors for Lithium Americas Corp. Previously, Dr. Gao served as Vice President at Molycorp Inc., and as Global Marketing Director and Technology Manager at FMC Corporation (USA).


Dec. 13 - Former U.S. Assistant Secretary of State for Energy Resources Frank Fannon as Strategic Advisor


Dec. 16 - Appoints Carla Matheson as Independent Director


Jan. 24 - Hatch Study Supports the Benefits of Nano One’s One-Pot Process and M2CAM Technology: Hatch highlights potential environmental benefits and economic competitiveness of M2CAM: i) Eliminates 100% of sulphate waste; ii) Uses 60% less water; iii) Cost and capital competitive; iv) Opportunities to further optimize and already underway.


Feb. 15 - Successfully Completes Phase One of its Co-Development Agreement with Niobium Producer CBMM: i) Completed Phase One of its co-develop work with CBMM; ii) Durability enhanced single crystal coated NMC cathode validated with CBMM’s niobium; iii) One-Pot process enables cost effective single nanocrystal coating.


Phase One applied the niobium coating technology to NMC811 cathode active material and the next two phases will focus on the niobium coating of even higher nickel NMC. This will include scaling of the One-Pot coating technology to demonstrate commercial viability and validate the supply chain. Together, CBMM and Nano One are developing an integrated and differentiated supply chain for niobium coated single crystal cathode materials.


The niobium coated single crystal cathode materials are applicable to both conventional liquid electrolyte cells and advanced solid state electrolyte cells.


Feb. 24 - Provides Corporate Update


Mar. 3 -Receives Funding to Advance M2CAM and Thermal Processing Initiatives: i) Receiving advisory services and up to C$404,000 in funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) supporting M2CAM and thermal processing initiatives; ii) Cost optimization of M2CAM and thermal processing innovations underway; iii) Supports scale-up path to commercialization and leverages engineering study.


Mar. 24 -Provides Update on Emerging LFP Opportunity: i) 2035 global LFP market projected to grow 13X, exceed 1 TWh and reach tens of billions of dollars.[1]; ii) One-Pot process could make LFP environmentally superior and cost competitive in North America; iii) ano One builds out its commercialization team to address LFP opportunity.


Bloomberg New Energy Finance projected that global LFP demand will grow from 81 GWh in 2021 to 633 GWh by 2030 and 1070 GWh by 2035. This represents about 1300% growth and 22% of the total cathode active materials market for stationary storage, passenger EV, commercial EV, e-bus, and two/three wheeler applications, and an addressable market measured in tens of billions of dollars.[1] LFP batteries do not require any nickel or cobalt, which are recently very volatile and severely supply constrained. LFP is also the safest, longest lasting and most affordable lithium ion battery chemistry, making it perfect for mass market and industrial applications, leaving nickel and cobalt rich chemistries for high-margin long-range vehicles and consumer electronics.” - NANO COO


May 13 -Provides Quarterly Progress Update and Reports Q1 2022 Results: Q1 Highlights and Headlines: i) Working capital of ~$48.6 million; cash of ~$48.7million; ii) Growing LFP demand and opportunity; iii) Additional Government funding for M2CAM® and Thermal Processing initiatives; iv) Successful progress in Co-Development Agreement with CBMM; v) Successful completion of engineering studies.


Q1 Financial Position and Results: i) Gross expenditures on research activities of ~$1,7M (Q4 2021; ~$0.8M) (Q1 2021; ~$0.8M); ii) Purchases and/or deposits on corporate and laboratory equipment of ~$0.3M before allocations of government grant funding as reimbursements; iii) Net use of cash of ~$3.9M to facilitate operational and strategic efforts; iv) Total assets of ~$51.4M (December 31, 2021; ~$55.4M); v) Total liabilities of ~$1.4M (December 31, 2021 ~$1.6M);


May 5 -Provides Q2 2022 Corporate Update On Commercialisation Strategy and Expansion Plans: i) Nano One Materials Quebec established to support expansion towards commercialization; ii) Technology scaling plans to 100 tonne per annum scale to support commercial qualification, detailed engineering and commercial plant design; iii) Patents number 21 and 22 issued and 47 additional patent applications pending; iv) Partnerships and pipeline growth continues.


Technology Scaling: Nano One currently develops and makes kilogram scale cathode active materials (CAM) using its patented One-Pot Process in a 1 tonne per annum (tpa) R&D pilot facility located in Burnaby, BC, Canada. The Company has a growing list of active collaborators, including more than 15 auto OEMs, battery suppliers, cathode makers and miners, and more than 20 other evaluation programs.Nano One is planning to scale for commercial qualification and production. It has begun detailed engineering and procurement of equipment for a 100 tpa pilot line with preliminary engineering underway for a multi-1,000 tpa industrial scale commercial demonstration line. These scale-up efforts are being focused initially on Nano One's most mature product, lithium iron phosphate (LFP).


Expansion to Support Technology Commercialisation: Nano One has incorporated a subsidiary in the province of Québec, as Nano One Materials Québec Inc. (Matériaux Nano One Québec Inc.), so that it may leverage the province's skilled and experienced workforce, raw materials, low-cost hydro-electric energy.


Partnerships & Pipeline: Automotive OEM, LFP, Nickel Rich Materials (NMC), Lithium Nicke Maganese Oxide (LNM). Taiwanese patent I753429 related to niobium coated cathode materials and soon to be issued US patent 11,329,284 related to the One-Pot Process. This marks Nano One's 21st and 22nd patents with approximately 47 other applications pending.


May 25 -To Acquire Johnson Matthey Battery Materials Canada: Definitive agreement to acquire 100% of the shares of Johnson Matthey Battery Materials Ltd. a Canadian entity located in Candiac, Québec. acquire all of the outstanding shares of Johnson Matthey (JM) Battery Materials Ltd. ("JMBM Canada") for approximately C$10.25 million.


The acquisition is fully funded and is on a cash-free, debt-free basis, subject to certain working capital adjustments.


Acquisition to include the team, facilities, equipment, land and other assets: i) Team has more than 360 years of scale-up and commercial production know-how; ii) Team and facilities proven in supplying tier 1 cell manufacturers for automotive iii) LFP facility and land strategically located near Montréal and operational since 2012; iv) Facility and equipment; v) Expedites Nano One business strategy for LFP and other battery materials.


JMBM Canada also includes a 2,400 tonne per annum capacity LFP production facility occupying approximately one tenth of the 400,000 square foot property. The transaction is expected to complete by the end of 2022, subject to JMBM Canada fulfilling contractual commitments and certain other customary closing conditions.


May 31 - Enter into a Joint Development Agreement with BASF for Lithium-ion Battery Materials: i) Evaluation of Nano One’s patented M2CAM®One-Pot process for BASF’s next-generation cathode active materials.; ii)Multi-phase greement includes detailed commercialization study for pre-pilot, pilot and scaled up production.


Under the JDA, the companies will co-develop a process with reduced by-products for commercial production of next-generation cathode active materials (CAM), based on BASF’s HEDTM-family of advanced CAM and using Nano One’s patented One-Pot process and metal direct to CAM (M2CAM®) technologies.


June 9 - Nano One and Rio Tinto Announce Strategic Partnership and US$10M Investment: i) Rio Tinto makes US$10M strategic equity investment in Nano One; ii) Rio Tinto to collaborate on battery metals as inputs for Nano One’s cathode process technologies; iii) Partnership accelerates commercialization of Nano One’s One-Pot and M2CAM® technologies; iv) Adds to Government of Canada’s Mines-to-Mobility initiative for North American battery ecosystem; v) Québec focus on Rio Tinto’s iron production in Sorel-Tracy and Nano One’s pending LFP facility in Candiac.


Rio Tinto has made a strategic equity investment into Nano One for gross proceeds of US$10M, equivalent to $12,536,500. On closing, Nano One will issue a total of 4,643,148 common shares, approximately 4.9% of the current issued and outstanding Shares of Nano One, at C$2.70 per Share in a non-brokered private placement.


This investment will be directed towards technology and supply chain development, commercialization, Nano One’s acquisition of the Candiac facility in Québec (announced 25 May 2022 pending completion), its conversion to One-Pot lithium iron phosphate (LFP) and industrial scale piloting of other Nano One CAM technologies, and working capital.


Provisions of the investment agreement with Rio Tinto include participation rights in any future equity financings to maintain pro rata ownership interest for a period of five years from the date of closing; a lock up on securities dispositions and a standstill for a period of 12 months from the date of closing, subject to certain exemptions.


June 15 - Appoints Lisa Skakun as Independent Director and Sets 2022 AGM Date.


June 17 - Announces Closing of Rio Tinto Strategic Investment and Collaboration Agreement.



Summary


Highlights

Below are the most significant milestones for the last ten months.

  • Builds on COP26, Shifts LFP Focus to Domestic Markets and Joins Canada's Accelerate ZEV Alliance (Nov.2021)

  • Hires Experienced Cathode Commercialisation Lead: Mr. Denis Geoffroy (Nov.2021)

  • Hatch Study Supports the Benefits of Nano One’s One-Pot Process and M2CAM Technology (Jan.2022)

  • To Acquire Johnson Matthey Battery Materials Canada (May 2022)

  • Strategic Partnership and US$10M Investment from Rio Tinto (June 2022)

November 2021, Nano One made a shift towards an LFP Focust away from Asian Markets towards North America. Shortly thereafter the company hired a Cathode Commercialization Lead and received an endorsement from Hatch for its One-Pot Process and M2CAM Technology. Nano One recently acquired the assets of Johnson Matthey Battery Materials Canada and received a strategic investment (US $10M) from Rio Tinto last month.


Looking back, it is not difficult to see that the succession of these milestones followed a coherent plan.


Alliances

The above highlights are directly related to the advancement of some key projects driven by potential customers.

  • Agreement with Global Automotive Company to Develop and Evaluate Manganese Rich Batteries (Sep. 2021)

  • Co-develop Application for High Purity Manganese in Cathode Materials with EuroManganese (Oct. 2021)

Note how the agreement with Global Automotive Company toward the evaluation of Manganese Rich Batteries was quickly followed with the enlisting of EuroManganese.


Moreover, the CBMM deals back in May 2021, had a successful phase completion in less than a year.

  • Co-Development Agreement with CBMM through usage of Nobium as cathode coating (May 2021)

  • Successfully Completes Phase One of its Co-Development Agreement with Niobium Producer CBMM (Feb.2022)

Phase One applied the niobium coating technology to NMC811 cathode active material and the next two phases will focus on the niobium coating of even higher nickel NMC. This will include scaling of the One-Pot coating technology to demonstrate commercial viability and validate the supply chain.


And last but not least the Joint Development Agreement with BASF for Lithium-ion Battery Materials (May 2022).


Under the JDA, the companies will co-develop a process with reduced by-products for commercial production of next-generation cathode active materials (CAM), based on BASF’s HEDTM-family of advanced CAM and using Nano One’s patented One-Pot process and metal direct to CAM (M2CAM®) technologies.


Hence, Nano One has serious interest from Automotive OEM, Mining and Chemical companies.


Acquisition

In less than a year, Nano One went from signing a JDA to actually taking over the Canadian Arm in Battery Metals of Johnson Matthey. Note that this was probably not the initial intention for both parties but circumstances have ways.

  • Joint Development Agreement (JDA) with Johnson Matthey for cathode materials innovation (June 2021)

  • Acquire Johnson Matthey Battery Materials Canada (May 2022)

Financing

The strategic partnership with Rio Tinto came with a US $10M Investment in the form of a non-brokered placement: 4,64M common shares, approximately 4.9% of the current issued and outstanding Shares C$2.70 per Share. Also included is the 1M non-transferrable Share purchase warrants at C$4.00 for a period of 12 months.


Provisions of the investment agreement with Rio Tinto include participation rights in any future equity financings to maintain pro rata ownership interest for a period of five years from the date of closing; a lock up on securities dispositions and a standstill for a period of 12 months from the date of closing, subject to certain exemptions.


This clause is meaningful as it give Rio Tinto rights to future financing to maintain it stakes for five years! Also, the amount of the financing covers the acquisition cost of Johnson Matthey Battery Materials Canada (C$10.25M).


Otherwise, Nano One is well funded with a C$48M cash position as of March 31, 2022.


Government Funding

Nano One continues to receive support from the Government of Canada to advance its technologies.

  • Advance to Milestone 3 with $1,095,057 from SDTC and $557,802 from the ICE fund (Sep 2021).

  • Receives Funding to Advance M2CAM and Thermal Processing Initiatives (Mar.2022)

C$404,000 in funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP)


Appointments

A number of prominent addition to the Nano One team occured in the past ten months. Mr. Adam Johnson as VP External Affairs (Nov.2021); Mr. Denis Geoffroy as Cathode Commercialisation Lead (Nov.2021); Dr. Yuan Gao as Strategic Advisor (Dec.2021); Frank Fannon as Strategic Advisor (Dec.2021); Carla Matheson as Independent Director (Dec.2021); and Lisa Skakun as Independent Director (June 2022).


In short

Nano One continues to make progress towards commercialization of its One-Pot and M2CAM Technology. Its current focus on lithium iron phosphate (LFP) in North America is in the process of coming to fruition with the acquisition of the facility of Johnson Matthey Battery Materials Canada and the investment from Rio Tinto. In addition, Nano One continues to work on other cathode modalities such as: NMC,LNMO, eLNO, and HEDCAM.


April 2021, Eight Capital initiated coverage with a price target of $7.87 citing: We estimate that the company will achieve first revenues in 2023 and that revenues will grow steadily from that point as the technology becomes more widely adopted.


It is unlikely that first revenues will be achieved in 2023. The timing of the closing of the acquisition along with the ownership transition and conversion of the current processes will take some time.


Back in April 2021, Eight Capital articulated a number of catalysts for further (re)valuation: i) Commercial terms with a partnership, ii) Advancement of existing partnerships, iii) Additional partners, iv) More proof of concept/testing, v) Up-listing to a senior exchange, vi) Positive regulatory developments and vii) Further government assistance.


Nano One has yet to achieve commercial terms with a partnership (i). It's evident, the industrial scaling of the One-Pot process is a necessary step to commercialization. Nonetheless, the advancements of existing partnerships with its Global Automotive Partner(s) and CBMM (ii) has occured. Also, additional partners were gained namely EuroManganese, BASF and Rio Tinto, as well as, further government assistance.


The recent catalysts had an impact on valuation but it was short-lived. The market seems to believe that more time is needed for Nano One to scale, deliver results, and generate revenues. However, its getting closer.


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The content of rally is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions - rally cannot take responsibility for your investment decisions.

311 views

If you enjoy this article consider making a one time or monthly contribution through PressPatron. We accept anonymous donations, no matter how small the amount. We are committed to be a paywall-free independent news source for investors. Thank you for your support.

And Readers like you.

PressPatronLogo_2.png

Powered By

Thanks for subscribing!

Subscribe to our Free Weekly Updates