by Travis Johnson, Stock Gumshoe | July 12, 2012 2:31 pm
The latest pitch from Jeff Siegel for his Power Portfolio newsletter (that’s the one that replaced the old Green Chip service) has gotten a lot of attention from Gumshoe readers — and a few of you have even sent in suggestions for the answer (correct suggestions, for the most part … never let it be said that there’s a smarter group of folks in cyberspace than you and your cohort).
The idea is that there’s a company in Vancouver that has a handle on “safe nuclear power” that will create a global monopoly. And if you think that sounds a little bit familiar, you’re right on this is a stock we’ve looked at before, and it’s exactly the kind of unique microcap stock that the newsletter guys absolutely cannot resist (it’s got a chance to be big if their little niche really takes off … and perhaps more importantly, they can make the stock price go up just by talking about it).
Here’s the tease to get you revved up:
“Over the next six months — thanks to an unprecedented discovery — one company is about to create a global energy monopoly by releasing…
“It alleviates safety concerns, reduces radioactive half-life and saves billions in operating costs. More importantly, it could triple shareholder value….
“At this very moment, on the ninth floor of a Vancouver office building, a (currently) $0.13 metals company is preparing to revolutionize the global nuclear power industry….”
With memories of the Fukushima collapse and the horrific aftermath in Japan, saying you’ve got “safe uranium” certainly gets attention. So what are they talking about?
“It’s a unique hybrid that, when easily mixed with standard uranium:
- Instantly makes power plants operate 25% to 50% more efficiently, saving billions upon billions of dollars in operating costs every year
- Prevents any Chernobyl-like meltdowns from ever happening again
- Drastically slashes the radioactive life of spent uranium…
“… this $0.13 company didn’t just create this hybrid metal.
“They also control the world’s largest deposits of the minerals required to produce it.”
Siegel teases that this company could grow from 13 cents into a $25 giant “over the next several years” … which would be a gain of almost 20,000%. Seems worth waiting a few years for, no?
He also tells us that sales are up 5,000% in the last five years, and that this company could control the nuclear fuels business within ten years … which, for an industry that moves as glacially as nuclear power, seems a bit of a stretch.
The alloy that they’re talking about is Beryllium Oxide, which was discovered a few years ago to have great properties for controlling the fission of uranium in nuclear reactors. And it was discovered, as we’ve heard teased before, “off the beaten path” and far from the halls of MIT:
“In fact, it wouldn’t be until this company funded the joint research venture with Texas A&M and Purdue that the world would find out how the right mixture of beryllium oxide with uranium could revolutionize the soon-to-skyrocket nuclear power industry.
“You see, their mixture gives the uranium fuel pellets a ‘skeleton’ of beryllium oxide…
“This ‘skeleton’ sucks the heat from the uranium core, creating — for the first time — a much longer, smoother, and safer reaction.
“Now, thanks to the hybrid’s unique formula, power plants across the globe that incorporate this creation suddenly won’t just save billions of dollars every year by making the uranium work 25% to 50% longer, but…
“This Unique Metal — which puts an end to accidents like Chernobyl — is about to return 3x your money”
The metal is apparently so cutting-edge — lightweight and strong — that this company’s engineered materials are also in demand from high tech manufacturers …
“… using this one-of-a-kind material, engines could run hotter, cars would travel further, computers could process faster, satellites could aim straighter, and drones could carry heavier payloads than ever before…
“All while saving companies vast amounts of time and money…
“Sometimes saving them millions of dollars — and even human lives.
“And that has corporations from every industry lining up at the door of this currently tiny outfit”
And that monopoly bit?
“This $0.13 company already holds the worldwide monopoly on BeO
“Even before test phases are completed, this little-known outfit has already secured the world’s largest deposits of beryllium oxide.
“In other words, they’re going to be the first and sole suppliers, from the ground up, to the nuclear market from the moment their product is operational!”
OK, so I’ve made you wait enough — who is this? This is the little tiny advanced materials and mineral exploration company IBC Advanced Alloys (IB in Toronto, IAALF on the pink sheets).
And it’s not a 13 cent company anymore — it’s now an 11-cent company, though the price bounces around quite a bit because it is ridiculously, absurdly, foolishly tiny. The market capitalization is only about $20 million and the stock often trades less than $50,000 worth of shares in any given day. So if you (yes, YOU) rush out and place a market order for shares right now, you’ve got a good chance of impacting the price.
They are headquartered in Vancouver — and yes, they’re on the ninth floor of one of the buildings there, though their advanced alloys (Beryllium-Aluminum alloys) are primarily being developed only an hour or two from Gumshoe Mountain, over in Wilmington, MA.
And yes, they’ve been teased before both by the Angel Publishing folks starting way back in 2010  (that’s them behind this Power Portfolio teaser) when they called it “Monster Metal” and by Byron King for his Agora-published Energy and Scarcity letter last Fall when he called it the fortune-making “Fourth Element.” (which it is — fourth, that is, not necessarily fortune-making … Beryllium is the second-lightest metal after the third element, the also oft-teased Lithium).
Those teases all served to help the share price pop up for at least a little while, but this is still really a research lab that’s proving its products — so they haven’t put together much of anything in the way of revenues growth to backstop their share price. They have managed to cut down on debt over the past couple years and to clean up their balance sheet after some merger and acquisition activity, but they will have to raise cash again sometime soon — they’ve been running through a bit more than a million bucks a quarter in cash, they’ve made more commitments to sponsor research at Universities (now including MIT), and they have only about $3 million in cash on hand (they still have about $5 million in debt, too).
The unusual thing for such a small firm is that they’re a mineral exploration company as well as an advanced materials company — they’re trying to develop a few Beryllium deposits even as they research and pitch new Beryllium-based materials for the nuclear, space and other industries. The next catalyst for the company, other than the fact that they’re again being teased by a pretty big mailing list, will probably be their assay results if they stand out as particularly good or bad — as of the first quarter report they expected the results from their drilling in Utah to be available in “early July.”
But really, this is neither a manufacturing nor a mining stock — this is a story stock. It could take off, certainly, particularly if they get some kind of big commitment from NASA or a nuclear power company to build something using their materials or to use their Beryllium-laced uranium technology for a reactor, but any guesses as to the timeline of that happening would seem to be just that, guesses. The MIT research is being conducted by a professor who holds a chair sponsored by TEPCO (that’s Tokyo Electric Power), which is an interesting connection to the country that is both the most nuclear-resistant and among the most nuclear-dependent right now, but things move so, so, so slowly in nuclear power that it’s really hard to forecast a brand new technology being widely adopted in a hurry.
So … cool company, fascinating science and materials, but a pretty limited market for them to generate revenue unless their science breaks through with some major customers and gets beyond the research contracts, technical awards, and positive commentary that we’ve so far seen. You can decide for yourself whether that’s worth a gamble or not — just remember that it’s hard to change the world when you start with a $20 million market cap, their technology is certainly compelling to a layperson like me but clearly the nuclear and space industries are waiting to see some more proof of effectiveness and future promise, otherwise many of those companies could have swooped in and bought up IBC without even asking Lucille in Accounting for access to the petty cash drawer.
We’ve written about IBC several times in the past few years, and I know many of you have traded the stock, so if you’ve got an opinion or think you see a good catalyst on the horizon, by all means, share with the group by tossing a comment on the pile below. Thanks!
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