These have been two fantastic announcements in my opinion. A Korean 3D printing group has confirmed that titanium powder produced by ASM exceeds the purity of the industry standard. An offtake agreement is being negociated for 1500 tons per year. The other is that rare earth ( NdFeB) magnets have been successfully produced from ASM feedstocks by KIRAM where the performance exceeds that of a commercial sample. A 5200 ton plant for producing these metals is expected to be at full capacity in mid 2022. (Currently using a pilot plant)
My initial thoughts: From googling, the typical commercial price for Ti powder for 3D printing appears to be US $300-400 per kilogram. You would imagine that an offtake agreement in the region of 1500 tons would result in a significant discount to this, but nonetheless the potential cash flow looks promising. The price for the precursor (TiO2) to the Ti powder is in the order of $3-4 per kilogram. ASM has indicated that the their process for metallising Ti from TiO2 is 50% more efficient, so there is then signifncant potential for great margins.
Bulk prices for 1kg of Neodynium magnets was ~US$100 for N45 grade magnets. I am not sure how that compares to the ones produced, but gives a ballpark and also indicates that selling 1000 tons of these magnets is going to be good for cash flow. Nd will be a product of the Dubbo mine.
There was also an investor presentation published earlier in the month.
This company has a long mine life (estimate of 70 years), If you have done research on macro trends and where we're heading you would know rare earths/metals play a significant part in our future (think EV/Renewables) and supply shortages will be a thing for: Nickel,Lithium,Cobalt,Neodymium and Dysporsium going forward in decades to come. I truly believe many of the ASX mining/rare earth stocks are going to be unique opportunities for the forseeable future think 10+ years and investors have a chance to participate in a gold rush type era right now. I strongly encourage everyone to research the components used in EV and renewables to get a better idea of who will be the beneficiaries, a tip would be to start looking into companies producing the metals/rare earths I have stated above and fully understand how they have a future in the supply chain of EV/Renwables.
Indicative Timetable from the December 2020 Rare Earths Conference
Mine construction starting in 2nd half 2021 if all goes to plan.
(I still hold ASM and even topped up at $2, but it is not in my Strawman portfolio due to using the funds for the comp)
ASM has demonstrated the manufacture of a copper titanium alloy in their scaled up facility with double the metal yield compared to the pilot process. They indicated that this result demonstrates that they can make any commercial titanium alloy currently on the market.
After a bit of searching copper titanium alloys are both conductive and high strength and are used in EV battery connectors, robotics, aerospace and power sub station disconnects.
I hold ASM
The announcement indicates that their 95% own subsidary, Zircon Tech, has now produced Dysprosium using their patented energy efficient electrorefining technololgy.
Dysprosium is another rare earth used in making magnets and imparts resistance to demagnetisation in neodymium based magnets. Up to 12% is used in the high performance magnets, e.g. for high performance EV motors. Dysprosium is difficult to produce using conventional methods due to the high temperatures required (melting point ~1400C). ASM has now demonstrated that they can produce key magnet metals dysprosium, praseodymium and neodymium, as well as titanium. The next targets are ferro-dysprosium alloys and zirconium, the later making up a large part of the resource at the Dubbo project.
I hold ASM
08/09/2020 NdPr METAL PRODUCTION AND PERMANENT MAGNET SAMPLES
03/09/2020 ASM TO ACQUIRE 95% OF ZIRONTECH
Both of these are more positive announcements. Re the acquisition Zircon Tech is ASMs JV partner who has been developing their electrorefining technology, so the acquistion effectively locks in all the related IP
The most recent announcment shows they now have the capability to use their technology to make NdPr alloys that can be used for making the permanent magnets that are used in the production of electric vehicles among other things.
I hold ASM
ASM had an ASX announcement a few days ago. The share price has now doubled from the recent low.
The announcement was good, They demonstrated that they could refine a key rare earth metal, but usually this sort of announcement results in a 1 day pop in the share price. In this case it has been 3 days of double digit gains. This has broadly been the same for small cap rare earth asc stocks, but ASM has been the lead.
Is there something else going on? There have been some rumblings in the media regarding AUS and US governments continued backing of maintaining non China rare earth supply. However, as far as i have seen, there has not been anything specific to ASM.
ASM JV PRODUCES SECOND KEY PERMANENT MAGNET METAL -PRASEODYMIUM
I hold ASM