A day after a 29% jump in share price
, executives for IBC Advanced Alloys (TSX:V.IB
, Stock Forum
) have figured out what caused the jump – an analysis piece by Byron King
that the company says said things they cannot say.
IBC Investor Relations head Ian Tootill told Stockhouse Thursday that the jump took them by surprise, and reiterated that IBC’s work testing Beralcast ® alloys in partnership with giant military/aerospace supplier Lockheed Martin Corporation is ongoing.
“IBC has no contractual relationship with Byron King other than he’s been a long-term follower with keen interest in IBC, and has obviously interested subscribers,” says Tootill.
Those news releases, one discussing the bringing on of a PR firm
, and another about the hiring of an executive VP of business development
, may indicate that IBC is feeling confident enough in its manufacturing tech to start investing in ‘next stage’ pieces of the business: actual sales contracts.
Tootill won’t make predictions – he can’t. But King sure did, and investors pulled their triggers in large numbers.
Beryllium aluminum alloy products aren’t new in the aerospace game, bringing three times more stiffness than aluminum(by weight), and with 22% less weight, but they’re also costly and wasteful to machine and thus considered very high end. IBC’s technology allows the company to cast such parts, instead of machining, allowing them to potentially replace more expensive machined options.
“Many companies would like to use beryllium aluminum alloys, so we have significant market potential in replacing those more expensive machined parts. We have the advantage of casting technology, and we’ve been pushing hard to prove it out in testing for use in aerospace.”
As part of that testing, Lockheed Martin gave the company a jet fighter part to replicate with their casting tech – a very complex component at that – with the thinking that if IBC could pass that test with flying colours, simpler parts would be no big deal.
That’s been a long row to hoe and, though Tootill can’t say much about it, what with restrictions on forward-looking statements and confidentiality concerns in working in partnership with a US military supplier, he will say: “There are always challenges to this kind of thing, but they’ve been steadily removed and we’re continuing our move forward. Everything we’ve said is happening is continuing to happen and there is progress.”
For investors, especially longs who have watched the stock flip about for the last year, this non-news will be good news.
In the military-industrial supply game, there are only three kinds of news releases: ‘We’ve started testing,’ ‘we’ve finished testing and we got the contract,’ and ‘we screwed up on the testing and will be looking for new jobs Monday.’ Due to the need for secrecy, ‘in-between’ updates, the kind of things that keeps mining company stocks buzzing between drill results, just aren’t permitted. And for a junior tech company on an exchange that wants news all the time, those long pauses in between press releases can be interminable.
“We’ve required a lot of patience on the part of shareholders and management, certainly,” said Tootill. “The runway is long for the development of aerospace products, especially for us as we’re introducing a disruptive new process.”
“It’s taking longer than we thought, but we were fortunate that last December we were able to talk about the fact that we were working with Lockheed Martin on the potential for Beralcast® to be used in F-35 Lightning II fighter parts, and subsequently a lot of work has gone on and we finally feel confident enough that IBC can put some more building blocks in place.”
IBC Advanced Alloys has a market cap of $16.7m with 79.5 million shares outstanding.
FULL DISCLOSURE: IBC Advanced Alloys is a Stockhouse Publishing client