Proactive Investors - Run By Investors For Investors
Why invest in AMNL?
Applied Minerals Inc: THE INVESTMENT CASE
INVESTMENT OVERVIEW

Applied Minerals wants to put Halloysite clay in your rechargeable batteries, and it’s energizing the company's profit outlook

The company is a leading global producer of Halloysite clay and owns the only deposit in the western hemisphere big enough for large-scale commercial production
tubes
INVESTMENT OVERVIEW: AMNL The Big Picture
The Brooklyn-based company is a leading global producer of Halloysite clay, a material used in lithium ion batteries

It is the kind of clay that a lot of people have probably never heard of.

But it is used a lot by industries and people with almost nary a thought where it comes from.

It is called Halloysite clay, and it is used in everything from a fire retardant additive to a key material in lithium ion batteries. The clay is also one of the best and most efficient delivery methods for agricultural agents like fertilizers and pesticides.

Applied Minerals Inc (OTCMKTS:AMNL) is a leading global producer of Halloysite clay and the owner of the Dragon Mine — the only deposit in the western hemisphere big enough for large-scale commercial production. The Utah mine is sprawled over 230 acres of land in that western US state.

Andre Zeitoun, president and CEO of the company, told Proactive Investors that there is “significant potential” in the clay because of the sheer variety of uses for the material. “We are literally leading the charge in applications for this mineral.”

Halloysite occurs mainly in volcanic-derived soils, but it also forms from primary minerals in tropical soils or pre-glacially weathered materials. Igneous rocks, especially the glassy basaltic rocks that are more susceptible to weathering and alteration, form halloysite.

Applied Minerals says it has the world’s leading experts in Halloysite clay working to create a standard for the characterization, quantification, and commercialization of this mineral.

Batteries a promising opportunity for Halloysite Clay

One major application for Halloysite, Zeitoun says, would be in battery technology. At this time, the main ingredient used in batteries is graphite, but the carbon-based material faces severe constraints in charging. 

Normally, graphite anodes can hold a substantial number of lithium ions, but researchers know silicon can hold 25 times as many.

But there’s a catch.

A pure silicon anode will soak up so many lithium ions that it poses the risk that the silica can swell and rupture the battery cell.

The beauty of Halloysite clay is that it is a silicate material and thus can be adapted due to its structure to be turned into a silicon nanotube anode for lithium batteries.

“We’ve already got this template built,” Zeitoun said. “The goal is to replace graphite altogether.”

The market is very promising, with most in the industry expecting it to grow 25% per year through 2023 to several billion dollars.

A report by Chinese researchers showed that “natural halloysite clay exhibited a favorable electrochemical performance.”

“This clay is a naturally occurring nanotube,” said Zeitoun.

Highest grade of Halloysite clay

On top of these efforts, Applied Minerals can deliver commercially consistent product grades of the highest quality Halloysite clay in the world.

The largest components of Applied Minerals revenue pipeline are sales of Dragonite to the catalyst/molecular sieve and the wire and cable/flame retardant markets.

Based on the company's pipeline, management is targeting a revenue range of $4.2 million to $6 million for full-year 2018.

Most of the revenue opportunities included in the pipeline for 2018 are expected to be commercialized during the latter half of the year.

WATCH: Applied Minerals books US$4.3mln sale of its halloysite clay materials

For Zeitoun and Applied Minerals, 2019 will be a significant transition year for the business.

The company expects to begin generating positive cash flow on an annualized basis during the latter half of 2018 if the mid- to high-end of the revenue range is achieved. In 2019, the company believes revenue can more than double and range between $16.1 million and $23 million.

“2019 is really our big year,” he said. “In 2019, we’ll be free cash flow positive.”

Applied Minerals said assumptions underlying the revenue opportunities are dependent, in part, on guidance provided by the company's current and prospective customers.

In addition to serving the traditional Halloysite markets for use in technical ceramics and catalytic applications, the company has developed niche applications that benefit from the tubular morphology of the clay.

Promising applications in agriculture

Another major application area for the clay is agriculture.

The agricultural agents the clay can deliver include pesticides, fertilizers, essential oils, insecticides, fungicides, herbicides, nutrients, growth stimulants, vitamins, and hormones.

They can be used on crops, tree crops, plants, shrubs, trees, and control of fleas and ticks on animals.

Dragonite can load, store, and control-release a range of agricultural agents uniformly and in appropriate dosages. Dragonite release rates can be tuned to match the duration of a growth or reproductive cycle, eliminating the need for frequent spraying or application by the user.

Dragonite safely stores the agricultural agent throughout the usage process and guards it from degradation by external influences.

The handling is made safer for the user as exposure to the agent is blocked. This method of application means customers can safely apply agents in lower amounts, prevent harmful environmental run-off, and reduce labor hours, generating savings.

R&D portfolio to spur rapid commercialization

The Brooklyn, New York, company traces its roots back to 1924 when it was known originally as the Atlas Mining Company. It became Applied Minerals Inc in October 2009, just after the global financial crisis of 2008.

Applied Minerals holds a broad research and development portfolio surrounding the technology related to the Halloysite material. Ownership of this portfolio provides the company with the ability to provide customers with both the highest quality Halloysite clay in commercial quantities and the resources to assist them in the rapid commercialization of its products.

As it continues to evolve, Applied Minerals is leveraging its strong position as a producer of Halloysite clay with its R&D portfolio to forge an even more lucrative future.  

 

Contact Rene Pastor at [email protected]

View full AMNL profile View Profile

Applied Minerals Inc Timeline

Related Articles

tubes
November 14 2018
The company is a leading global producer of Halloysite clay and owns the only deposit in the western hemisphere big enough for large-scale commercial production
1544205739_Playground.jpg
December 07 2018
The group is also now launching new product lines, including trampoline parks, which complement its soft play parks
Copyright © Proactiveinvestors.com, 2018. All Rights Reserved - Proactive Investors North America Inc., Proactive Investors LLC

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use