THREE STOCKS TO PROFIT FROM A VERSATILE MATERIAL: GRAPHENE

By Harje Ronngard

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THREE STOCKS TO PROFIT FROM A VERSATILE

MATERIAL: GRAPHENEBy Harje Ronngard, Editor, Money Morning

It’s just a couple of carbon atoms in the shape of a hexagon.

And it’s this material, in this shape, that could change the world as you know it.

Any surface: your desk, the floor, even a highway could become a charge station for electronics. According to digitaltrends.com, liquid taken from anywhere in the world could be drinkable, thanks to this material.

Or what about harvesting energy out of thin air? Researchers at Manchester University believe the same material carries this potential.

These are all potential possibilities with graphene.

The amazing thing about graphene is not only its potential uses, but also its simplicity.

You would think such a revolutionary material might be incredibly complex. Something you’d need a PhD to understand.

But that’s not the case.

In fact, graphene atoms are a lot like diamond atoms. Both are forms of carbon. Yet both have drastically different characteristics.

Diamonds are hard. Graphene is brittle.

And because of its structure, graphene has a diverse number of uses, whereas diamonds are commonly found on women’s fingers.

Like any revolutionary material or mineral — steel, oil, carbon fibre — there’s lucrative potential in the development of graphene that you could profit from.

But before we take a look at that, let’s take a brief step back in time…

The super material about to be replaced

Wood.

It’s one of our most important — and under-appreciated — renewable raw materials.

Ceramics is another, although it’s not renewable.

Ceramics has both practical and cosmetic uses, from the bowls and vases in your home to its use in dentistry.

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Such materials were the bread and butter of many societies throughout history.

Today, we still continue to use both by the tonne.

But over time, we’ve moved on to different materials, ones that are responsible for the modern world around you.

In the early 1900s that material was steel.

Steel making dates all the way back to 1800BC. It wasn’t until 1855 that it became hugely popular.

That’s when Henry Bessemer came up with the Bessemer process. It was the first inexpensive way to mass produce steel.

The key idea was to remove impurities from iron by oxidation. Meaning you needed to blow air through the molten iron.

Source: Wikipedia

The Bessemer process couldn’t have come at a better time. It helped with the expansion of the Industrial Revolution. New inventions, buildings, rail roads, ships and factories all demanded steel.

The Mecca of steel during that time was Britain. They demanded so much steel, most of their population traded life on the farm for a life in the smelting factory.

By 1875, Britain accounted for 47% of the world’s production of pig iron and 40% of steel. Even today, steel is an incredibly important material in all aspects of the construction process.

When the 1950s rolled around, we started playing with a new material: silica.

It would become the super material to power our digital world. Robert Noyce used the material to invent his first integrated circuit (the microchip).

(*Fun fact: Jack Kilby created a very similar chip six months earlier, unbeknownst to Noyce. However Noyce’s invention was better suited for large scale production.)

With Noyce’s microchip, computers were no longer restricted to the size of a room. The microchip could downsize the most powerful computers to the size of a hand calculator.

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As the years went on, the semiconductor industry advanced at break neck speeds.

‘ The integrated circuit…has unleashed change comparable to the Industrial Revolution by making the computer revolution and the digital age possible,’ The New York Times wrote in September 2008.

‘ Today there are far more chips on earth than people. All around us, millions of them are tirelessly at work - in computers, phones, television sets, printers, copiers, CD players, PlayStations, cars, trains, airplanes, in almost all electronics.

‘ Without them, there would be no iPod, no Blackberry. There would be no laptop computer or International Space Station or the Hubble Space Telescope.

‘ There would be no Apple, Intel, Samsung, Nokia, Microsoft or Google; no Silicon Valley; no multibillion-dollar semiconductor industry.

‘There would be no Internet.’

Now, as we head into 2019, there is a new material to catapult civilisation into a new era.

And if you get in early, there’s no telling the kind of gains you could potentially see.

Endless possibilities

Graphene (a single layer of graphite) first came into focus in 1962. But we’ve actually known about it for a lot longer than that. People back in the Neolithic age knew about graphite.

Yet it wasn’t until 1962 that we first observed (via microscope) graphene. What did we do with the marvels of graphene back in the 60s?

Bugger all.

It wasn’t until 2004 that two scientists in Manchester rediscovered this glorious material. The American Physical Society wrote of the rediscovery:

‘ Scientists often find ingenious ways to attain their research objectives, even if that objective is a truly two-dimensional material that many physicists felt could not be grown.

‘ In 2003, one ingenious physicist took a block of graphite, some Scotch tape and a lot of patience and persistence and produced a magnificent new wonder material that is a million times thinner than paper, stronger than diamond, more conductive than copper.

‘ It is called graphene, and it took the physics community by storm when the first paper appeared the following year.’

The website, Graphenea continues:

‘ The first time graphene was artificially produced; scientists literally took a piece of graphite and dissected it layer by layer until only 1 single layer remained. This process is known as mechanical exfoliation.

‘ This resulting monolayer of graphite (known as graphene) is only 1 atom thick and is therefore the thinnest material possible to be created without becoming unstable when being open to the elements (temperature, air, etc.).

‘ Because graphene is only 1 atom thick, it is possible to create other materials by interjecting the graphene layers with other compounds (for example, one layer of

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graphene, one layer of another compound, followed by another layer of graphene, and so on), effectively using graphene as atomic scaffolding from which other materials are engineered.

‘ These newly created compounds could also be superlative materials, just like graphene, but with potentially even more applications.’

You’ve read about a few potential applications already. But the list just goes on and on.

Drugs and antibodies could be laced with graphene, for example. It would act as a protective sheath until the drug reached a targeted area.

In effect, doctors could target specific bacteria or abnormalities, making drugs like chemotherapy treatments more effective.

When experimenting with graphene-based circuits, IBM researchers said they perform 10,000-times better than existing options. This not only means faster computers and smartphones, but potentially a super artificial intelligence around the corner.

It’s a fascinating mix of science, technology, and futurism.

The added bonus is that there are opportunities to invest in. Of course, you have to know where to look.

And in this free report, that’s exactly what I’ll show you, now…

Three Aussie stocks to profit from this super material

There’s little doubt graphene will have a huge impact on the future.

The huge profit potential has got mining companies scattering to find more of this super material (graphite not graphene).

What that means is there could be a couple of multi-bagger graphite players out there already. There might also be a couple of bad eggs too.

It goes without saying you shouldn’t put any more money into graphite or graphene stocks than you’re willing to lose.

So, now that you have some understanding of the basic risks, let’s take a look at three promising graphene stocks for 2019.

First up is Hazer Group Ltd [ASX:HZR].

Rather than trying to mine graphite, Hazer is trying to commercialise the Hazer Process. I’ll let Hazer explain what this means:

‘ Prior to listing, over eight years was spent developing the underlying Hazer Process, using natural gas and unprocessed iron ore to create low cost, low-emission “clean” hydrogen, considered to be a key fuel in the transition to low carbon economy.

‘ In addition to the hydrogen product, the Hazer Process produces synthetic graphite, used in lithium ion batteries, lubrication and industrial applications.’

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Source: Hazergroup.com.au

In 2018, Hazer claimed they could potentially produce hydrogen and graphite at a cost 75% lower than conventional methods.

And this isn’t just any ordinary graphite. This is graphite of 80–95% purity.

At the moment, Hazer is yet to make a dollar from their Hazer Process. But they continue to spend on research and development and their pilot plant.

In mid-2018, Hazer moved to phase two of their pre-pilot plant.

They’ve demonstrated on-line injection of iron ore catalyst into the pre-pilot plant.

It was a significant step towards scaling up their technology.

At the moment, Hazer can produce about 29 kilograms of graphite per day and eight kilograms of hydrogen per day. It represents a 650% increase from production levels from their first generation plant.

It goes without saying that an investment in such a process will take time. If Hazer can become a major graphite player, however, then the wait could be well worth it.

The second exciting graphite player is Aussie producer, First Graphene Ltd [ASX:FGR].

In two and a half years, First Graphene has progressed from initial testing to constructing a commercial-sized production facility.

First Graphene is not only a producer, but a miner of graphite. Chairman, Warwick Grigor explains:

‘ …First Graphite is sourcing the raw material from its own mines as well as buying from third parties, nut this is only the begging of the value chain.’

Source: First Graphene 2017 Annual Report

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At the moment, First Graphene has multiple mining projects in Sri Lanka. But as mentioned, the company is also trying to move further up the value chain.

First Graphene are already working with the University of Adelaide, Swinburne University of Technology and Flinders University to develop flame retardants, longer lasting lithium-ion batteries and vortex fluidic devices, which give you the ability to manipulate single cell organisms.

Clearly, First Graphene has big plans for the future. And they’ve got their fingers in multiple pies, from mining to intellectual property applications.

Compared to its peers, First Graphene is thinking of the long game.

They’re setting themselves up not just to profit from the sale of graphite, but also the production of graphene and patented applications of this super material.

Real sales from actual clients are yet to come through. But First Graphene might not be long off.

The last graphite player you might want to look at is Anson Resources Ltd [ASX:ASN].

Anson is a mining play, pure and simple. They explore for minerals in the mid-west of Western Australia and in the state of Utah, US.

Their project in Utah aims to get high grades of lithium out of the ground.

Source: Anson Resources 2017 Annual Report

At the moment, Anson holds a 10% interest in the project. However that could increase by:

• 40% if Anson defines one or more drill holes, while expending US$666,000 • 20% if Anson drills and logs one or more holes, expending US$2.3 million

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Their project in WA is their graphite play. The site contains extensive levels of graphitic schist mineralisation. Meaning there’s a good chance Anson could find high-grades of graphite within these deposits.

Source: Anson Resources 2017 Annual Report

Anson, like Hazer and First Graphene, doesn’t enjoy reoccurring sales from graphite endeavours…yet.

Also know that there’s a chance none of these stocks will be winners.

These three stocks are not recommendations. You shouldn’t buy the first names you see. If you’re interested in graphene and its future potential, I urge you to continue researching.

Think of this report as a launching pad. These are the initial ideas. Here, you need to go on and do your own research.

Learn more about the industry and the individual businesses within it.

The hope is, you’ll find amazing opportunities profiting from our newest super material: graphene.

Happy hunting,

Harje Ronngard, Editor, Money Morning

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