The Ellis Martin Report Interview with Paul Gill of Lomiko Metals
December 21, 2015
TEMR: I’m Ellis Martin. Join me for a conversation with Paul Gill, CEO of Lomiko Metals, trading on the TSX Venture Exchange as LMR and in the U.S. on the OTC as LMRMF. Lomiko Metals is focused on the exploration and development of minerals for the new green economy, such as graphite, and also has a 100% interest in Lomiko Technologies Incorporated, an investor in graphene technology and manufacturer of electronic products. Paul welcome back to the program.
Paul Gill: Thanks Ellis. Thanks for having me on.
TEMR: It’s been a long time since we visited, at least on this radio program. There was certainly quite a buzz with regard to graphene and graphite when I covered this company about 4 or 5 years ago or so, before many of the related technologies were deployed. What has changed in that timeframe? How’s the market changed and how have we gone from concept to production more or less?
Paul Gill: That’s exactly what we planned to do when we first made arrangements with graphene labs in 2013. That’s exactly what we’ve done. We invested in Graphene 3D Lab back in 2013, pre-IPO and then helped them again with another investment during the IPO. That stock has done very well. It’s recently signed a research and development agreement and royalty agreement with a Fortune 500 company. Graphene is here to stay. We’re looking forward to more and more activity.
TEMR: What are some of the across the board uses for graphene and graphite?
Paul Gill: At this time we have such a varied amount of graphene patents out there. There’s 12,000 that have been filed to date. What we look at for graphite is very stabilized types of uses. One is a battery graphite is used in batteries, such as lithium-ion batteries, lubricants, et cetra. We think the electric vehicle applications are going to be getting bigger and bigger and wider and wider spread. The medical device applications in hospitals, et cetera, are going to increase, think of MRIs. Think of motorized wheelchairs. Think of golf carts as another application. Graphite has a long way to go, but the real sizzle here is about the graphene. Graphene is 200 times stronger than steel by weight. It is 1,000 times more conductive than copper and it has the flexibility of rubber. It’s an amazing product. We can imagine where all these wonderful uses are going to take us.
TEMR: Really between graphite and graphene we’re really looking at pretty much everything.
Paul Gill: The only think I can, sort of, equate it to Ellis is the advent and the introduction of plastic in the 1930s, ‘40s, ‘50s and ‘60s. So versatile we haven’t got a good idea of what to do with it to yet. The general public hasn’t got a good idea of what to do with it yet. The scientists and the large Fortune 500 companies are all over it. You know that once they have spent $5 billion in research, which has just happened a little while ago, filed 12,000 patents and they’ve awarded the Nobel Prize for physics for the isolation and discovery of graphene in 2010 to University of Manchester scientists, we know that this is coming. It’s up to us, the people who are at the cutting edge of investing to really pay attention. What I’ve done and gone out there and made the initial investments. We would like to get more and more support for Lomiko Metals and Lomiko Technologies in order to continue our investment into graphene and graphite uses. We think the future is very, very bright for these two minerals.
TEMR: Well, you took a 10% stake in Graphene 3D and a 40% interest in a private company called Graphene Energy Storage Devices. Are you looking for an addition to mining that you’re doing successfully? Are you looking for more companies that you can take a stake in down the road and that’s where you potentially may seek investment in the future?
Paul Gill: Yes, absolutely. It’s a bit of a transformation our company is going through. Our base concept is to discover minerals that are going to be used for the green economy. That’s why we’re after lithium, graphite, cobalt, other types of rare earths, et cetera, at the base case. Now we’ve really vertically integrated so we’re looking towards the applications of the processing of that graphite into graphene and the end uses of that particular product. That’s where Energy Storage came from. We’re working on a graphene super capacitor with Stony Brook University in New York. That report should be out very shortly. The Graphene 3D is working on and has a product for sale that will put graphene and all its wonderful capabilities into a 3D printer filament and be able to print out electronic objects are 3D. That makes a great opportunity. Yeah we’re looking high and low for where we can get new graphene applications and people who have interesting patents and invest in them. I think that’s a good spot to be.
TEMR: Where are you looking for potential acquisitions? Anywhere they might be on the planet? North America? Europe? Asia?
Paul Gill: Yeah, we’ve looked in Europe and South America, Asia. We’re looking for opportunity. Opportunity means you have to be prepared for it. We have to raise the cash in Lomiko in order to be prepared for those opportunities. That opportunity is someone who has an isolated patent. One that doesn’t have a lot of overlap with it because there is a lot of overlap in graphene patents right now and secondly, one that has a huge market potential. Think about graphene and all its conductivity and creating an ink out of that graphene so you can print electronic circuits. That’s a lot of interesting properties there. You can also create a paint using a combination of graphene and molybdenum and some other metals and that would coat the bottom of ships. Lockheed Martin has a graphene filter that it’s working on to filter seawater to create freshwater. There is the U.S. army patent on infrared contact lenses using graphene. You can see the wide variety of patents here, the very interesting applications. We think ther4e’s opportunity out there. We’re on it. We need people to come and support us in our activity at Lomiko and we can I think really pave the future at this point.
TEMR: I want to ask you about how individuals or institutions or folks can get involved? But, there’s one potential application I’m thinking of and as I sit here in Southern California where the sun shines most every day of the year, and you mentioned graphene and a paint, why wouldn’t some sort of graphene paint or graphene in itself be coating all of these buildings here and conducting and storing energy in the future? Why wouldn’t it do that?
Paul Gill: Absolutely. I’m sure that there is a patent. I think there is a pat on that particular end-use, using graphene as a paint. It’s a good thermal conductor as well as a electrical conductor. Heat is what solar panels are all about. You’re creating heat and you’re using that heat to run an engine or heat water or some other application. Yeah, I think that there’s a definite, definite use for graphene in Southern California.
TEMR: You mentioned the company uses vertical integration and I want to get into that and your Kickstarter campaign, but let’s talk about the about the bottom end of that vertical integration, that’s the ground. What are you doing as far as mining the minerals is concerned?
Paul Gill: Well, we’ve raised $5.5 million dollars in 2014 and recently deployed it at the La Loutre Project in Québec. This project is located about 50 kilometers from the only operating graphite mine in North America, which is owned by Imerys Carbon & Graphite, formerly named Timcal. We’re a very close relative, I guess, geologically speaking of this particular deposit. We want to find something that will provide graphite for the next 20 or 30 years. Now we’re not adverse to selling the product and the project to Imerys if that opportunity comes up, but our first goal is to define the resource. That’s what we’re working on now. We’ve drilled about 130 holes into the deposit, discovered long intercepts of graphite that are crystal and flake graphite. We’re watching carefully the prices of graphite, which are ranging between $1,500.00 and $3,500.00 per ton depending on the carbon purity and the flake size. If you look at something that’s 94% carbon purity plus above 50 mesh in size that is something that sells for $3,500.00 U.S. a ton. Our costs, because it’s close to surface are going to be very low. We think that we’ve got a really good opportunity to find a very robust resource that we can then sell to one of these big companies.
TEMR: What is your plan for securing funds to further develop your resource and to further develop the acquisitional aspect of your business plan?
Paul Gill: Yeah, absolutely an important question. That’s one of the biggest questions facing companies like ours that are junior companies. We have a couple of different opportunities. One, we have taken some of the funds that we’ve raised in 2014 and deployed them into the licensing of electronic products in order to establish a revenue stream. We’ve licensed three products, two power convertor products, which have an end-user already defined and have about 5 or 6 million units of this particular device that are sold per year. We have an agreement with a distributor that has about 250,000 units ready to be bought. We’re about to manufacture that particular product so that will establish a revenue stream. We have a second project, which is the focus of a Kickstarter campaign called the Spider Charger, which essentially is a device that replaces your normal outlet or your standard outlet. What it does is it provides three ports on each side including the two normal plugs and it will be eight ports thus the spider name that can be plugged in and charge phones or iPads or any other electronic device. The reason for the USB ports is that it charges more efficiently using those ports. You only need to have one or two of these per house and you can charge all of your devices.
TEMR: So essentially every home and every business should switch out their AV outlets and install a device like this. The market’s huge.
Paul Gill: The market is absolutely huge. We know the market is there because there’s other groups that have similar products that have been on the market and have been successful. There’s one that has two USB plugs in the front. The only downside to having the USB ports in the front is that if you were to plug in a phone charger with a power convertor at the end of it, it blocks those USB ports. That’s the only disadvantage. We’ve solved that problem and we’ve come up with a unique design that we have a patent pending on and also a trademark on Spider Chargers. We‘re talking to distributors now and getting Underwriter Labs and Canadian Standards Association approvals. The sole purpose of this is to get enough revenue and attract enough to then establish a profit from it. That defends our position when it comes to the graphite project and provides us some revenue in the interim because that’s obviously a long-term project. It also allows us to be patient on selling or doing a transaction on the shares we received from Graphene 3D when we did the initial private placement. Those are worth about $1 million dollars right now. They have been worth as high as $8 million just at the IPO stage. That company just recently closed a $1 million dollar financing to get new products. We think that if we’re patient with this company with the Fortune 500 company deal that they have, with the 8,000 customers they have, they’re going to be a very, very big surprise to a lot of people in the future and we want to continue to own that 10%.
TEMR: From what I’ve been hearing, your company, sort of, separates itself from the rest of the junior mining sector. I would consider you company a bit of a specialized tech metal company. How would you describe it and how should you position the company to potential investors who maybe have been burned in the mining sector?
Paul Gill: Absolutely a good question. We are positioning ourselves as more than just a mining company. The reason that we’re doing that is because look at the disaster mining has become at this point in time. I think it’s a real serious issue right now that we have many mining companies ready to go under with no other avenue to raise money other than to go to the market. We don’t want to be caught in that situation. What we have done is created a revenue stream and a profit stream from these electronic products. We’ve got R&D going on in graphene and energy storage devices. We’ve got a robust, robust situation that no one really knows about yet. From 10,000 feet we look like any other mining company, but we’re going to surprise people with the kind of activity that we have and we’ve already accomplished. The opportunities that are there for the future we’re positioning ourselves to be the funder for many other graphene transactions and high-end products made out of graphite. That’s where the real market is. That’s where the real profit is.
TEMR: So when you’re looking for financing, which you need for your company, you described one instrument of finding financing that will protect your current shareholder base from potential further dilution. What are some of the other methods?
Paul Gill: Some of the other methods are actually as we get our graphene products up and running to license those products to other larger groups. That’s essentially a very good role to play is to be that mezzanine finance group that comes in and takes a product that is sitting on the shelf with an academic that doesn’t want to take the risk of developing it and commercializing it. We’ll step in at that point if we feel that there’s an opportunity and provide that first half a million dollars that they need to develop that product and then go and find a end-user for that product that will take it to the commercialization. I think we’re going to provide a very useful service. We have a lot of people that are now contacting us to request us participating in their companies. I think that’s a great place to be when people are calling you asking you to participate in groundbreaking research and you’re getting known as a groundbreaking company, you’re in the right spot and people will notice. That’s the situation now. We’re seeing some people getting out there and finding us, but we certainly need a lot more support and a lot more opportunity exists right now.
TEMR: Tell us about the Kickstarter campaign.
Paul Gill: Yeah. What we’ve done with the Spider Charger I described before, which is the wall unit that has 8 ports and charges 8 phones at a time with--- 6 with USB, 2 with normal outlets, we’ve actually gone on Kickstarter and started that campaign. We’re about a week in. It’s 2% funded already. The first 10% is the hardest so we could certainly help that project out and the funds are going to get the product UL and CSA certified and ready for distributors to use. That’s the biggest obstacle right now for big companies to come and get that product on the shelves.
TEMR: Big companies that sell to construction companies, major electrical concerns, places like Home Depot. When I sit in L.A. and look at all the skyscrapers or a city like Vancouver, Toronto, New York potential for just one or two large, large buildings to outfit all them with these devices is just amazing. It’s probably a company changer. Your stock is at about $0.03½ to $0.05, an amazing potential entrance opportunity. Tell us about the share structure.
Paul Gill: Right now Lomiko has 155 million shares out trading at $0.03½ to $0.04 in Canada and $0.03 in the U.S. We’re not well known at this point. We haven’t really started lighting up the charts at this point. What we are looking at is deliver on a resource, the first few deals on our Spider Charger, the development of Graphene 3D into a viable company. We’re firing on all cylinders. I think we’re going to break through in the next little while. I think that’s the opportunity for people who are interested in looking at companies that might change the way we do things. In the next little while we hope to be able to go and talk to those guys that are building these skyscrapers and have sales for the electrical companies that install devices, such as outlets, in those new real estate developments. That’s a good starting point and then retrofitting. Going to places like Home Depot is another one. We think there’s three excellent opportunities here with the graphene, with the electronic devices and with the base metal graphite.
TEMR: You’re quite pleased with the way the business is forming itself since we first learned about Lomiko I believe probably 6 or 7 years ago.
Paul Gill: As Lomiko we’ve developed what we wanted, which was a mineral asset from the graphite. We’ve gone forward from there and invested in companies we thought were going to change the world in graphene and seeing them go IPO and continue to hold share positions in those companies. Now we’ve gone on to where there’s a nice level of markup into the electronic products industry and hopefully will build a nice base for us to display our graphene products in the future. That’s really exciting to be a hub for new graphene products would be an ultimate goal for us.
TEMR: Paul thanks so much for joining me today on the program. It’s great to visit with you again. I look forward to more update on both Lomiko Metals and Lomiko Technologies in the future.
Paul Gill: Thanks Ellis.
TEMR: I’ve been chatting with Paul Gill, CEO of Lomiko Metals, trading on the TSX Venture Exchange as LMR and in the U.S. on the OTC as LMRMF. Listen to this segment again on the homepage of our website, Ellismartinreport.com and download the entire Ellis Martin Report on iTunes or TuneIn radio.