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This is significant!!
Management Commentary
“During 2018, we validated our first multi-cavity production molds for our amorphous and metal injection molding operations, resulting in production orders,” said Bruce Bromage, the Company’s Chief Operating Officer. “In addition, we have recently received our first amorphous production tooling order for a higher volume medical device application with validation and acceptance protocols in process. We are also working with our customer to develop the next generation of this application, demonstrating their commitment to our technology and to Liquidmetal as a trusted supplier. We are focused on bringing more applications into our production pipeline.”
Assuming 24 weeks for a mold and 8 weeks to validate parts, this higher volume application could begin to generate revenue in 2019. And, I like that they are following up with a “next gen” part as well. It shows a commitment in this technology for their product line. Break-even could come in 2020!!
Just curious, but why would tariffs impact Eontec?
Another question ... didn’t Li buy stock in LQMT and the money raised stay in LQMT instead of Li buying out existing shareholders? This means the existing shareholders at the time acknowledged in the deal that their only opportunity to cash in comes from appreciation of the stock. Do we know all the terms associated with this deal and cross licensing?
Yes, it has been a very long time. I don't post too much because there has been little concrete news to discuss. But, I am heavily invested in LQMT and have been for several years. Ironically, it parallels work I do in composite plastics. I am aware of Engel from the plastics side. I can also relate to the high specific performance of the amorphous metals as well as the processes to produce parts, issues of shrink rate, etc. Even plastics are characterized as amorphous or crystalline or something in between. And, I have also spent a lot of time in China and have a feel for how things develop there. I think the medical field is a good niche for LQMT as a high specific performance is of value and pricing considerations do not typically take center stage....like sports and aerospace and higher end consumer electronics.
Kris Kent said something interesting in the recent blog post. He made note of a supplier audit by a global medical device manufacturer. As someone who has worked for 30 years and continues to work in manufacturing (Tier 1 automotive) I know that supplier audits in the traditional sense are very significant. 100% of the time in my experience, passing a supplier audit was a major milestone on the path to pending (already on the drawing board) production business. Tier 1's do not entertain new suppliers easily. It is a big expense to set up a new supplier and to qualify them, especially in critical industries with significant product liability. Qualifying a supplier can literally take months or even longer and a supplier audit traditionally is a team of people coming in to examine every department, looking at you record keeping in each department to make sure you are compliant to industry required standards. Tier 1's don't do this unless there is a compelling need i.e. they want to place an order. So, it tells me there is a likelihood they are close to receiving production business from this company. The other interesting point is that they are global. Obviously being a global supplier means they are of significant size and capable of generating very high sales volumes. They will also have experience qualifying standards product across international markets, and the infrastructure to penetrate a global market rapidly. This to me was the most encouraging hint I've heard in many months!
Recent article mentioning Fortune Minerals: http://m.scmp.com/business/commodities/article/2149027/china-goes-all-out-secure-lithium-cobalt-supplies-key
Good video on Fortune by CEO at Canadian Mining Symposium last month:
Sounds like Eontec is about to explode and needs a boat load of cash to build out capacity.
Great article out today. Last section covers FTMDF. Look for section titled: SOURCING COBALT CLOSER TO HOME.
http://www.chemengonline.com/lithium-battery-demand-drives-process-evolution-cobalt-li-ion/?printmode=1
Great news: TASR clears major milestone:
http://www.cbc.ca/news/canada/north/tlicho-winter-road-green-lit-1.4601011
TASR and NICO discussed in recent article: http://s1.q4cdn.com/337451660/files/doc_downloads/articles/180301-Construction-North-of-60-Electrifying-time-for-Tlicho-Road.pdf
Cobalt price now at $95,250/MT = $43.20/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt price now at $90,250/ MT = $41.94/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt price now at $88,250/MT or $40.03/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt now trading at $38.22/lb ($84,250/MT): https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt now at $36.51/lb ($80,500/MT):
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
TD Ameritrade shows 333.44 million shares. Not sure about float.
The Case For Canadian Cobalt Companies
http://www.seekingalpha.com/article/4137525
Cobalt at Bid/Ask: 75,000/75,100 per MT ($34.06/lb)
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Today's cobalt price B/A: $69,500/$70,000 per MT ($31.50/$31.75)
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
On November 9 FTMDF made this comment in a press release:
"The current price of cobalt metal is approximately US$30 per pound, well above the US$16 per pound used in Fortune's 2014 Feasibility Study"
https://www.bloomberg.com/press-releases/2017-11-09/fortune-examines-higher-production-rate-in-nico-feasibility
Thanks! When BMW decided it was strategic to begin building vehicles using carbon fiber, they did a JV with SGL and invested heavily in infrastructure to produce carbon fiber and convert it into automotive components to thereby becoming highly integrated in the conversion process. I see such an opportunity at this point in time where it makes sense to bring in a strategic partner and end user.
Anyone aware of the reason behind the moves this week?
Actually it's very easy depending upon the size of the part. Injection molders often place more than one cavity within a mold. Think about how many tooth brushes get produced as compared to phones. For smaller parts there could be dozens of cavities within a single mold. Then it's simply arithmetic. What is the total cycle time to cool the parts, open the press, unload the parts, prep the mold, close the press, and inject the metal? This will tell you how many machines and multi-cavity molds are needed. Installing a 100 machines to launch such a production plan would be no big deal for Professir Li. I've seen bigger investments in China WITHOUT any orders under the assumption that if you build it they will come. I saw a mold shop that was close to 1 million square feet and a $350 million investment including equipment built as a start-up with no initial orders. That's they way the Chinese think.
HUGE revenue potential from Apple IF Apple selects LQMT to produce parts for them. Granted Apple owns enough IP to set up manufacturing themselves or source another company to do it for them. However, why not select LQMT? Just because Apple has rights to the IP does not mean they get the parts for free. And, no one is going to manufacture parts for another company if their investment in infrastructure and equipment is not rewarded by some return generated through profit tacked on to the costs of producing the parts. So, assuming Apple sourced LQMT with a $5 part for 180 million phones, the annual revenue would be $900 million. Assuming an EBITDA margin of 25% and a valuation of 20 X's EBITDA, the value upon starting production for any company awarded the contract would increase by $4.5 billion placing LQMT at $5/share assuming 900 million shares.
Do people really expect to hear from an Apple product launch about the use of BMG? If Apple were to chose such a technology, it would have to be engineered then designed then prototyped and then tested. Afterwards, a PO would be issued to someone to produce the parts and yes this could be LQMT. Even though Apple has rights to the technology, they still need a manufacturer and that manufacturer will be able to make a profit -- it's basic business. Once a PO for production has been placed, a large number of machines will be ordered, built, shipped, installed, and commissioned. By then, the production tooling will have arrived and it will be installed in the presses for production trials and process/product validation. The whole process could take a year or more before they're ready to produce in volume. The news of such an order would be leaked and formally announced LONG before any product launch/announcement by Apple.
Good news today: all gaps filled! Shaking the tree and triggering stop losses to generate volume. All good signs!!
Been in HDYN for a few years and through drilling the first well. It's been quite a disappointing ride but hoping this second shot at a well will prove rewarding. A few questions to the group:
Investors seem unconvinced at this point about HDYN's prospects as volume is anemic and share price hasn't budged. I would expect with a well about to be drilled that share price would advance. I haven't been following closely, so does anyone know what is holding share price back at this point?
Does anyone have conservative estimates of what the stock could be worth and could you present the numbers & assumptions behind your analysis?
Thanks and good luck!!
It's China! I guarantee people will learn things before a formal announcement is made to shareholders. Also, keep in mind one of the biggest issues the Chinese have is getting/accumulating personal wealth OUTSIDE of China. So, there will be a double attraction to this stock by Chinese investors: appreciation as an investment through well timed purchases and at the same time doing so through a US entity. Many wealthy Chinese have children overseas as well making it easy for them to engage in such investments.
Agree! Seems like MM's accumulating shares for someone, careful not to hit buy-stops set above $.27. Seems like deliberate/careful accumulation taking place.
If Apple wants a 3rd party to manufacture BMG parts for them, that manufacturer will need equipment and material. Apple's right to the IP does not = free material from Materion or free machines from Engel. Of course Apple has access to the IP so they can develop their own material or equipment sources or do it in house but I suspect they would chose to stick with known entities. In such a case, I suspect Materion and Engel would pay LQMT royalties that are part of the profit charged to their customers. Apple's right to the IP also does not mean they get free parts produced using the IP. So whoever invests in manufacturing capability to produce parts for Apple will charge them a profit to be negotiated between the parties.
If you look at who is most knowledgeable to initiate production for Apple, it difficult to argue that someone other than LQMT who has never produced such parts before would be in a better position than LQMT.
$2/chassis does not seem like a reasonable assumption. For a machined aluminum chassis I think it would be much higher. For reference, here is a link to a breakdown for the iPhone 7 - see "Enclosure":
https://9to5mac.com/2016/09/20/649-iphone-7-estimated-to-cost-apple-220-heres-the-component-breakdown/cszmryovyaawd8n/
LQMT closed well outside Bollinger Bands last week. Today's consolidation brought us back within without giving up much on price and on strong volume. Still seems to me like some news has leaked based upon the strong support we're seeing. Nothing technically preventing us from going parabolic for a significant extension of the run.
I agree their production capability is not there yet. But, who is in a better position? Regardless of who it is, there will be an announcement one morning indicating an order for 250 machines. Hopefully it's for LQMT.
Why is it not possible for LQMT to see revenue from Apple? I understand their lock on the IP. But they still need a manufacturer to step up and make product for them should they choose to apply the technology to their products. No one will manufacture WITHOUT making a profit. Even if Apple chose to bring inhouse, they must still buy presses and materials from a LQMT supplier.
Accumulation from China? Seems like someone with insight is adding. I suspect it's from discussions happening in China where insider trading controls are more relaxed. Given that it's Monday and there is strong follow thru from Friday, I think we'll break $.25 this week, if not today.
I assume he will be taxed at ordinary income on any appreciation in share price over his cost basis for any warrants he converts. Those taxes become due in the year in which the warrants are exercised and could make for a large tax liability the longer he waits as the stock appreciates. Anticipating appreciation in price, one would want to exercise any warrants as soon as possible to reduce tax exposure. Once converted, further appreciation will be taxed as capital gains once the shares are sold snd at a much lower rate.
Good article on moving money out of China:
http://www.chinalawblog.com/2016/01/getting-money-out-of-china-what-the-heck-is-happening.html