Nano One Materials Corp. (NANO.TO) is a clean technology company with a patented, scalable and low carbon intensity industrial process for the low-cost production of high-performance lithium-ion battery 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.
With strategic collaborations and partnerships, including automotive OEMs and strategic industry supply chain companies like BASF, Umicore and Rio Tinto. Nano One's technology is applicable to electric vehicles, energy storage, and consumer electronics, reducing costs and carbon intensity while improving environmental impact.
The Company aims to pilot and demonstrate its technology as turn-key production solutions for license, joint venture, and independent production opportunities.
Coverage was initiated January 2018 additional notes were issued on August 2019, May 2020, January 2021, September 2021. and July 2022.
News Releases
Aug. 5 - Provides Quarterly Progress Update and Reports Q2 2022 Results: Q2 Highlights and Headlines:
i) Working capital of ~$47.5 million; cash of ~$47.9 million
ii) Acquisition of Johnson Matthey Battery Materials
iii) Joint Development Agreement with BASF
iv) Strategic Investment by Rio Tinto for ~$12.5 million
Aug. 23 - Receives C$1.8M towards SDTC Milestone 4 and Granted 2 Patents: C$1.8 million in non-dilutive, non-repayable contributions from Sustainable Development Technology Canada (“SDTC”) and the British Columbia Innovative Clean Energy (“BC-ICE”) fund toward the fourth and final milestone of the Scaling Advanced Battery Materials project. Nano One is pleased to highlight the granting of two (2) more patents in Japan.
The two Japanese patents relate to the One-Pot formation of niobium coated spinel (lithium nickel manganese oxide, “LNM”) and to a method of forming lithium mixed metal oxides such as lithium nickel manganese cobalt oxide (“NMC”). Development of these patents has been supported in part by advisory services and research and development funding from the National Research Council of Canada Industrial Research Assistance Program (NRC IRAP) and brings Nano One’s granted patents to a total of twenty-four (24) with approximately forty-seven (47) patents pending in various jurisdictions around the world.
Sep.27 - Validate Manganese Metal in M2CAM Process with Euro Manganese:: Highlights: i) The companies have jointly demonstrated cathode materials made directly from Euro Manganese sourced electrolytic manganese metal using Nano One’s One-Pot Process.ii) Euro Manganese has produced EV grade high-purity electrolytic manganese metal (“HPEMM”) from its pilot plant using feedstock from its Chvaletice Manganese Project in the Czech Republic. iii) Nano One’s patented One-Pot process enables cathode materials to be made directly from metals (“M2CAM®”) and lithium carbonate, for reduced complexity, cost, and environmental footprint.
In this first milestone, pilot plant samples from Euro Manganese’s Chvaletice Manganese Project have been successfully validated as feedstock for Nano One’s patented One-Pot and M2CAM cathode production technologies.
Nov. 1 - Closing of Acquisition from Johnson Matthey and Denis Geoffroy as Chief Commercialization Officer: Successfully completed the acquisition of Johnson Matthey Battery Materials Ltd. (“JMBM Canada”) previously announced on May 25, 2022. Net consideration for the Acquisition was C$10.25 million[1], subject to customary closing adjustments and was fully funded from cash on hand.
The Acquisition helps expedite Nano One’s business strategy for LFP and other battery materials, and includes:
1) A talented and dedicated workforce of 46 professionals with cathode manufacturing know-how on LFP.
2) The only existing North American lithium iron phosphate (“LFP”) production facility.
3) An 80,000 square foot, 2,400 tpa capacity LFP production facility on 9.5 acres, strategically located near Montréal. 4) Certification systems supplying tier 1 cell manufacturers for the automotive sector.
Denis Geoffroy, a seasoned lithium-ion battery value chain and cathode manufacturing leader has been appointed Chief Commercialization Officer of Nano One, effective Nov 1, 2022.
Nov. 11 - Provides Quarterly Progress Update and Reports Q3 2022 Results:
i) Working capital of ~$45.8 million; cash of ~$45.9 million
ii) Government funding of ~$1.8 million received
iii) Grant of two additional patents.
Dec. 21 - Enter into Joint Development Agreement for Battery Materials Process Technology with Umicore: A non-exclusive Joint Development Agreement (JDA) on production process technologies for cathode active materials (CAM) for lithium-ion batteries. Umicore will evaluate Nano One’s patented M2CAM® One-Pot process technology with the intention to integrate it with Umicore’s proprietary process technology for the production of high nickel NMC (nickel, manganese, cobalt) CAM. Both parties aim to leverage their respective technologies and know-how to further increase the throughput rate while reducing the costs and environmental footprint of CAM production.
Jan. 19 - Provides Progress Update on the Successful Integration of Candiac LFP Operation:
i) One-Pot trials commencing and decommissioning of unused equipment progressing.
ii) Functional re-org implemented to align innovation and commercialization centres.
iii) Completed integration of Candiac team and facility, focus now on post-merger activities.
iv) Focusing on meeting market demand while harnessing government support.
LFP trials with the One-Pot technology to start January 2023 with larger scale trials beginning in Q1 2023. Large One-Pot reactors have been ordered, installation and commissioning in Q3 2023 for industrial pilot scale LFP production.
Feb. 13 - Awarded $10 million from Sustainable Development Technology Canada: i) Fast track and convert North America's only LFP plant to pilot Nano One's One-Pot Process.; ii) Leverage high-quality acquisition of LFP plant and amplifies expansion plans;.; iii) Accelerate strategic growth and offtake opportunities with consortium partners Rio Tinto, Lithion Battery Inc., and undisclosed auto OEM.; iv) Clear a path to industrial scale piloting, demo commercial production and revenues. v) Maximize shareholder value, support innovation and enhance security of supply.
Award of $10 million in non-dilutive, non-repayable contributions from Sustainable Development Technology Canada ("SDTC"). These funds will support the conversion of Nano One's recently acquired Candiac facility to the patented One-Pot Process for industrial-scale pilot production of lithium iron phosphate (LFP). SDTC's continued support will accelerate the LFP piloting while advancing the plan towards commercial operations.
The SDTC project also includes financial support for the design, construction, and operation of a multi-cathode piloting hub (MCPH) to help customize and advance Nano One's One-Pot and metal-direct-to-CAM (M2CAM®) processes for the industrial scale pilot production of next-gen LFP, NMC and LNM cathode active materials (CAM).
Feb. 21 - Completes Cathode Evaluation with Global Automotive Company, and Expands Collaboration:
i. Demonstrates significant potential to reduce environmental footprint, capital costs, and operating costs for NMC materials. ii. Met s performance targets and increases confidence in long term strategic potential. iii. Led to a new evaluation agreement that adds LFP to the program and expands validation of Nano One’s technology.
Mar. 17 - Granted 3 New Patents and Receives Proceeds from Warrants:
i) Three new patents, issued and allowed in Taiwan, Korea and US.
ii) Patents extend protection to Nano One’s One-Pot process for making lithium-ion battery cathode materials.
iii) Patents will add value to Nano One’s sulfate free, sustainable technology for the clean energy future.
iv) Proceeds from Warrants of ~$3.65M adds to strong treasury and balance sheet.
Patent Application TW 202222679 will be for the One-Pot synthesis of lithium iron phosphate (LFP) being commercialized in Candiac QC; Patent KR 10-2443307 is for the One-Pot synthesis process of NMC and LNMO cathode materials; Patent US 11,616,230 will be for fine and ultrafine powders and nanopowders of lithium metal oxides for battery applications.
A total of 27 with more than 55 patent applications also pending and additional patent applications being considered.
Nano One is also received $3,651,102 in proceeds from the exercise of 2,281,939 warrants since January 1, 2023. The warrants were issued as part of a private placement completed in February 2020 and were due to expire on February 21, 2023. Nano One has 1M warrants at an exercise price of $4.00 outstanding and due to expire on June 16, 2023.
Mar. 31 - Provides Quarterly Progress Update and Reports Q4 2022 Results:
i) Working capital of ~$40.6 million; cash of ~$39.5 million
ii) Acquisition of Johnson Matthey’s Candiac production facility closed.
iii) Commenced One-Pot trials and decommissioning of unused equipment.
iv) Joint Development Agreement entered into with Umicore
Trials to verify the production of LFP using Nano One’s patented One-Pot process in the Candiac facility have commenced. Results from these trials will be used to make critical commercial and plant conversion in 2023.
Apr. 24 - Nano One Advances Commercial Plans for LFP and Other Cathode Materials: Nano One’s plans jumpstart the commercialization of its One-Pot process starting at 200 tonnes per year in 2023, expanding in steps to 2,000, 10,000 and hundreds of thousands of tonnes per year. Nano One has $40m in cash, $10m in grants .
Lithium Iron Phosphate (“LFP”),
Nano One’s Candiac facility in Québec is being retrofitted with its new One-Pot reactors and technology, and will be commissioned initially at 200 tons per annum (“tpa”) in Q3 2023, ramping up to as much as 2,000 tpa.
Nano One will launch LFP in North America, followed by Europe and the Indo-Pacific region. Product from piloting will be sent to partners and potential customers for validation, qualification, offtake and possibly first revenues, and will also inform the design, construction and operation of Nano One’s LFP Commercial Demo Plant.
Nickel-rich (“NMC”) and manganese-rich (“LNMO”)
Nickel and manganese based cathode materials play an equally important role in Nano One’s growth strategy. To this end, Nano One also has engineering work underway for a separate 100 tpa NMC and LNMO pilot facility.
Summary
Nano One's valuation fluctuated between $2.10 and $3.98 for the period. The 52 week high obtained in the period was a result of successful completion of multiple milestones. Specifically, the completion of the cathode evaluation (NMC) and expanded collaboration with the Global Automotive Company (NMC+LFP) was a key driver.
Milestones
Aug. 2022 - Japan patents: i) Lithium nickel manganese oxide(“LNM”), ii) nickel manganese cobalt oxide (“NMC”).
Sep. 2022 - Produced cathodes via One-Pot Process and M2CAM technology from Euro Manganese's HPEMM.
Dec. 2022 - Joint Development Agreement for Battery Metal Technology with Umicore (M2CAM for NMC)
Feb. 2023 - Complete Cathode Evaluation with Global Automotive Company and Expand Collaboration (NMC + LFP)
Mar. 2023 - Granted three new patents (Taiwan [LFP], Korea [NMC, LNMO], US)
Apr. 2023 - Outline Commercial Plans for LFP and Other Cathode Material (NMC and LNMO)
Acquisition
Nov. 2022 - Closed the Johnson Matthey acquisition ($10.25M);a 80,000 sq ft facility with 2,400 tpa capacity for LFP.
Financing
Mar. 2023 - Received $3.65M from Warrant Proceeds.
Note that the only warrants on the books for now are 1,000,000 at $4.00 which expire in June 2023.
Government Funding
Aug 2023 - Receives C$1.8M towards SDTC Milestone of scaling Advanced Battery Material Project.
Feb 2023 - Awarded $10M from SDTC to convert the LFP plant to Nano One's One Pot Process.
In short
Nano One continues to advance projects with its partners (Euro Manganese), increase its strategic alliances (Umicore), and accumulate patents (Japan, Taiwan Korea), These build on the previous period where Nano One completed a project with CBMM and formed an alliance with BASF and secured a $10M investment from Rio Tinto.
The more recent developments occurred in tandem with the Nano One's ability to secure significant government funding ($11.8M) and leverage its public status on the TSX to generate incremental warrant proceeds ($3.65M).
As previously noted, the acquisition of Johnson Matthey's facilities (2400 tpa capacity) is a transformational for the company as it now can work to scale its efforts toward commercialization. Hence, the recent release outlining the commercial plans to advanced its One-Pot and M2CAM technology with lithium iron phosphate (LFP) and (NMC and LNMO) in North America is a logical step. Nano One provided the market with a clear blue print on its intent.
Ramping up the retrofitted One-Pot Candiac facility to 2000 tpa signals that Nano One plans on operating near full capacity for LFP cathode manufacturing. Starting with a Pilot and Demo Plant will enable it to gradually scale.
Nano One also has engineering work underway for a separate 100 tpa NMC and LNMO pilot facility
The above is definitely "new information" and suggests that Nano One intent to supplement its LFP efforts. The current financial position ($40M in cash, $10M in grants) will help towards this objective but will it be enough?
Overall, Nano One is uniquely positioned to advance Cathode production in North America. However, it's still unclear which revenue model will be used to transition from a growing venture to a revenue generating enterprise.
Recently, Roth Capital initiated coverage and issued a price target of $7.00
Although the analyst cautions that NANO is still in the pre-revenue stage, he says he believes the company could have as many as twenty One-Pot process lines running around the world by 2027. This accomplishment, he estimates, would generate (C) $50 million in untaxed income, which is how the analyst arrives at his valuation
“Applying a 30x multiple in this earnings scenario for unique technology and an impressive growth outlook, and discounting back at 20% for four years, implies a C$7.00 stock on 105 million shares,” he said.
Again, similarly to the previous Eight Capital price target, Roth's seems equally lofty and highly speculative. Note that from all the catalysts initially outlined by Eight capital the only remaining is: i) Commercial terms with a partnership.
Hence, in the presence of significant developments it's still unclear how much more capital will be required for commercialization. However, to date Nano One has demonstrated that it is capable and very promising.
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