Reviewing a successful 12 months, marked by a number of new investment and collaboration deals with leaders in the battery materials supply chain, Dan Blondel, CEO of Canadian battery materials specialist Nano One [TSX: NANO] said that the momentum towards net zero and electrification of energy systems in now unstoppable.
Over the last decade, “The combined forces of markets, geopolitics, industries, science and engineering came together to push the energy transition forward. Inertia that initially resisted adoption now works in our favour,” Blondal said in a letter to shareholders released ahead of the company’s AGM on 26 June.
The speed of development in the battery materials sector has picked up particularly over the last couple of years as the US, Canada and Europe changed their regulation in favour of domestic production. At the same time, some of the key net zero and EV deadlines are coming closer (such as Norway’s ban on fossil fuel cars from 2025), concentrating industries’ minds on meeting regulatory targets.
Nano One is a thought leader on electrification
Though relatively small in size Nano-One has managed to position itself as a thought leader as it struck up collaborative deals with companies all along the battery supply chain. This includes mining companies Rio Tinto and Euro Manganese and materials makers and chemicals producers Umicore and BASF.
More recently, the battery materials maker also signed agreements with Canadian nobium products company CBMM, and Our New Technology, all of which are progressing their own related projects.
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Just a few days ago one of Nano One’s key collaboration partners Umicore opened its newest facility in Belgium where it plans to produce solid-state battery prototypes. The two companies entered into a joint development agreement for battery materials process technology in December.
Blondal added that the has more strategic opportunities in the pipeline, and that it remains a nimble company with tremendous commercial potential.
Nano One describes itself as being on a mission to change how battery materials are made by using its patented low-carbon, low-cost technology. Its materials have applications in electric vehicle batteries, energy storage, and consumer electronics.
Financials: disciplined capital allocation
At the end of the first quarter the company’s balance stood at $40.1m with another $7m in non-dilutive grant funding still to come, and a working capital at $35.7m. Chief financial officer Dan Martino said 2022 has been a year of rapid growth for Nano One.
Disciplined capital allocation meant that the firm used less than 20% of treasury compared with the same period last year. For instance, the acquisition of Johnson Matthey Battery Materials Canada was completed on a close-to-nil net cash basis that was offset and fuelled by a $10m investment by Rio Tinto. The company is now in the financial position to support ongoing operations, expansion and commercialisation initiatives.
Martino noted that Nano One’s cash and financial controls are strong, and the treasury is routinely monitored to ensure adherence to budgeting and achieving optimal returns. The battery material maker’s treasury is diversified amongst several Canadian chartered banks and large financial institutions to stabilise against any risk factors stemming from the banking sector.
The company’s capital strategy is designed to de-risk its scale-up efforts through diversified funding sources that include strategic partnerships, government programs and the support of retail and institutional investors. Nano One’s capital plan prioritises both short and long-term revenue generation business strategies such as scaling up multi-cathode active material (CAM) piloting, the launch of lithium-iron phosphorus cathode materials production in North America and other regions, as well as accelerating the commercial adoption of its patented processes.
