Lots of folks have been asking about this pitch from Alternative Energy Speculator, a newsletter that has brought us a few interesting ideas (and, of course, a few duds) in the past. At the moment they’re charging about $500 for a year’s subscription, and clearly there are a lot of folks who’d like to learn a bit about their latest teaser pick without shelling out half an ounce of gold, so let’s dig into it and see if the Thinkolator can help …
Here’s how the pitch opens:
“It alleviates safety concerns, reduces radioactive half-life, and saves billions in operating costs. But, more importantly, it could triple shareholder value in the next 6 months…
“At this very moment, on the ninth floor of a Vancouver office building, a (currently) $0.16 metals company prepares to revolutionize the global nuclear power industry.
“In these early stages, it’s a move that not 1 in 10,000 investors sees coming.
“But their discovery is guaranteed to take the entire world by storm.
“You see, this tiny outfit just created — for lack of a better term — a monster metal.
“… A unique hybrid that, when easily mixed with 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”
Wow … that sounds pretty good, right? They tease us that this company doesn’t just create this special hybrid metal, but they also “control the world’s largest deposits of the minerals required to produce it …”
And the share are already up more than 60% as they’ve “completed the test phases” over the last five months.
So what is this “monster metal?” They go on to tell us that it’s Beryllium Oxide, and that this teased (and unnamed, of course) company funded research at two universities (Purdue and Texas A&M) that “created” this hybrid metal and discovered that it could make uranium much safer … here’s how they put it:
“… next to uranium, it’s about to become the most sought-after, highly-demanded metal for nuclear power plants across the world.
“For its characteristics alone include: a melting point of 4,500 degrees… thermal conductivity matched only by diamonds… able to dissipate heat and cool faster than any other metal… several times stronger than steel… and still the second lightest metal on earth.
“In other words, just knowing the properties of the metal and what is required for nuclear reactors, beryllium instantly becomes the most ideal fit.
“But until now, its use has been reserved to special projects: in small doses for X-Ray windows, high-speed aircrafts, missiles, and communications satellites.
“In fact, it wouldn’t be until this company funded a 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 Three Times Your Money”
So that’s it — this company that we’re teased about apparently has effective control of the world’s supply of Beryllium Oxide (BeO), and they are lining up deals with major companies, and they expect to be the key supplier of this critical alloy and “launch to the top of the industry” when their test phases are completed.
So who is it? Well, I tossed it into the Thinkolator just to make sure … but this solution was also sent in by an army of amateur gumshoes, so I certainly wasn’t the first to figger it. This company is: IBC Advanced Alloys (IB on the Venture Exchange in Canada, IAALF on the pink sheets). This company is absolutely tiny, so even you — yes, I mean YOU — buying a few shares for your IRA could drive the share price up, so please be careful and patient if you do decide you’d like to invest in this one.
They describe themselves as “a vertically integrated Beryllium and advanced alloys company” — they have an interesting and up-to-date investor presentation on their home page if you’re interested in getting some background on the company. They are not the world’s largest Beryllium producer, not even close, but they do have claims in Utah near the Spor Mountain Mine, which is operated by Brush Wellman and currently, according to them, supplies 60% of the world’s Beryllium (FYI: Brush is publicly traded, too, at ticker BW in NY, they’re expected to be profitable next year). They also have claims in Colorado, including the second largest historical beryllium producing mine, and in Brazil.
In their investor presentation, IBC says that they target revenues of $50 million by 2014 and have manufacturing capacity for more than $100 million in revenue, in what they say in the same presentation is a $2 billion market for Beryllium and its alloys. That’s not exactly “controlling the world’s supply,” but they do have relationships with some big nuclear players (GE and Westinghouse, along with Kazatomprom, the Kazakhstan nuclear operator). IBC gets most of their revenue currently from the foundries and fabricators that they own, this is a new company that has rolled up a few existing operations to become “vertically integrated,” with $11.6 million in sales from their manufacturing segment in 2009 (down, thanks to the weak economy, from $19.8 million in 2008). They also are in the process of acquiring another alloy manufacturer, Beralcast, which produces Beryllium/Aluminum alloys that they think have huge potential in aerospace (Beryllium is the second lightest metal on the periodic table — heavier only than Lithium).
And yes, just to reiterate, this is an absolutely microscopic company — they have 150 million shares, fully diluted, and the shares have been driven up to 20 cents (Canadian) by this latest promo surge from Alternative Energy Speculator. That means their market cap is C$30 million, one of the smaller companies I’ve ever looked at. They are trying to create a vertically integrated company to mine, process, alloy and sell Beryllium products to the medical, aerospace, telecom and, yes, nuclear industries, but this is still — as the company itself will tell you — is way, way out at the end of the risk/reward continuum as a fledgling microcap.
The Nuclear reserach stuff is real — I don’t know if it will end up taking the global nuclear industry by storm, but they did do the research and make findings similar to those teased with Purdue and Texas A&M, and as a decided non-expert it does sound compelling to me. There was a good article on them in Business in Vancouver, a local magazine, back in June that focused on the nuclear stuff [pdf file], in case you want a bit more info (and perhaps a bit more boosterism).
Financially, there’s not much to say — you know they’re teensy, and they are, of course, unprofitable. Revenues might be as high as C$4 million for the most recent quarter when they report, which would be a big jump of 40% over the previous year, but they have been losing money for what looks like their entire (just a few years) existence, with an accumulated deficit of close to C$20 million, and they have to this point been losing somewhere between a half million and a million dollars each quarter, so I assume that before they get to those days of huge potential sale many years from now they’ll have to raise lots more money by selling lots more shares, or else get some lucrative partnership deals with big aerospace or nuclear companies, akin to what exploratory stage biotech companies get with big pharmaceutical firms. From my relatively brief look at the shares, the nuclear stuff looks like interesting R&D, with the huge grain of salt added that making any change to nuclear reactors or fuel is going to take a lot of convincing and a lot of time … and the other stuff looks like an unprofitable alloy maker with some future potential, competing with much larger players. That’s not to say it’s not worth your speculation dollars, though I’d be extra careful — with tiny stocks like this investment newsletter attention tends to drive them briefly crazy, but when that attention wanes, absent other “real” catalysts, the stocks tend to drift back to where they were before the new investors came calling.
Oh, yes, and just in case you want to dot the i’s, they are headquartered in Vancouver, on the ninth floor of an office building. Whether that’s the last detail that makes this a worthwhile investment is, of course, a call for you to make … it is, after all, your money. Let us know what your thoughts are on Beryllium, other nuclear advancements (we also see quite a bit of teasing for Thorium as a uranium replacement every now and then, which just about always points at recent IPO Lightbridge — LTBR — though that may be even more of a shakeup for the industry than this Beryllium alloy stuff), or, of course, this tiny little company itself … that’s why the friendly little comment box sits below, awaiting your attention.
And of course, we do always want to know what you think of newsletters you’ve subscribed to — we’ve had a couple comments on Alternative Energy Speculator’s work, but we would love more if you’ve had experience with that newsletter, just click here to share your opinion.
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