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Nano One poised to benefit from US strategic battery policies

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Battery materials specialist Nano One [TSX:NANO] has announced total assets of CAD 59.1m and liabilities of CAD 1.3m for its Q3 financial position. Its primary sources of cash for the quarter were ongoing government programs, interest income and also the exercise of stock options and warrants, the company said. Working capital of CAD 45.8m has been confirmed, along with cash of CAD 45.9m.

Interestingly, the company also looks well-positioned to benefit from further strategic initiatives from both the US and Canadian governments, with more detail on battery materials policy being announced by Washington in October. This has a regional dimension to it which could benefit Canadian companies in the sector, as well as their US partners.

Japan patents are big part of Asia strategy

Nano One is a fast-expanding battery materials specialist which owns its One-Pot process of the manufacture of more robust and sustainable materials for batteries, including vehicle batteries. It recently announced two additional patents in Japan and the receipt of approximately CAD 1.8m in non-dilutive, non-repayable contributions from Sustainable Development Technology Canada and BC-ICE. These were made as part of local efforts towards the final milestone of the Scaling Advanced Battery Materials project.

The grant of the Japanese patents we consider to be especially significant, as the company is already active in the Asian region working with an as yet undisclosed auto maker.

There continues to be significant political support for the battery materials sector in North America. In October President Biden announced that the US Department of Energy is awarding $2.8 billion in grants from the Bipartisan Infrastructure Law to 20 manufacturing and processing companies for projects across 12 US states.

Biden also announced the American Battery Materials Initiative, a new effort to mobilise the entire government in securing a reliable and sustainable supply of critical minerals used for power, electricity, and electric vehicles (EVs). Together, these actions are designed improve America’s energy independence, strengthen national security, and support good-paying jobs across battery supply chains.

“We’re looking forward to continued advancement on an integrated supply chain through our work with the governments of Canada and the USA,” Nano One said in a statement.

US battery initiative will require international cooperation

The US government has said that the battery initiative will leverage deep, ongoing engagement with international partners and allies to map resources, advance strategic partnerships, diversify global supply chains, and raise international environmental, community, and worker-safety standards for extraction, processing, and recycling.

Nano One seems to us to be an extremely well-positioned beneficiary of this initiative, sited as it is next door in Canada, and already enjoying Canadian government support at both a provincial and federal level.

In September Nano One and Euro Manganese [TSX.V:EMN] announced a joint demonstration of cathode materials made directly from Euro Manganese sourced electrolytic manganese metal using Nano One’s One-Pot process. Nano One’s patented One-Pot process enables cathode materials to be made directly from metals and lithium carbonate, for reduced complexity, cost, and environmental footprint.

The results align with automotive battery demands in Europe and North America for sustainably sourced critical minerals and environmentally superior and differentiated supply chains. The two companies are jointly developing economically viable and environmentally sustainable applications of high-purity electrolytic manganese metal as one of several inputs for the production of cathode active materials used in lithium-ion batteries.

Listen: Podcast with Dan Blondal, CEO of Nano One Materials Corp

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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