Ann: Archer to collaborate with Australian Defence Prime NIOA, page-115

Great pick up Tizard. See below

ARCHER MATERIALS - SITE VISIT

Yesterday I visited Archer’s Sydney operations. Dr Mohammad Choucair (CEO) showed me around and I could not have had a more knowledgeable and passionate host. Not only did Mohammad show me what they are doing, but we were joined by Matt and Michael. Both super smart and seriously connected in the world of Quantum computing. I have no idea about this technology. Most of what Mohammad talked about went way over my head. In my simple terms, Quantum computing is the 'Maybe'. With normal silicon chips it is a binary result. Yes or No. A flow chart follows, if this happening, then we do this. Yes or No. With Quantum we introduce Maybe. Another dimension.

The purpose of the visit was to make sure it is real. I am an ex-stockbroker/trader, so my knowledge of quantum physics is somewhat limited. I am not even sure Mr Cordingley covered it in my A Level Physics. So, the jargon and the concepts were a stretch. However, there were a number of things that I did manage to grasp.

Firstly, Mohammad knows his onions. He has a talented team and the access to the Sydney Uni Foundry that others would die for. That means low capex. Just brain power. They have plenty of that. Good relations with Sydney Uni and being in close proximity to the Technology Hub and others in the field is important. Scientists seem to be ace networkers. Let’s face it the internet was invented by these guys so they could talk between Unis.

The Foundry at Sydney Uni

Secondly the Sydney Uni facilities are world class. Clean rooms. Fab etc. Watching these highly skilled technicians and scientists in their ‘bunny suits’ was fascinating. And all under orange light. Blue light which is more normal is not good for foundries and labs. Makes it look very eery though. Orange lights are used in clean rooms as the blue and possibly UV light emitted from normal white lights don't accidentally ruin the resist pattern. This process involves patterning a resist material onto the surface, etching what's not covered by the resist, and then using UV light to burn off the resist.

Third the company is very aware of hype in the sector. It has become very conservative in the announcements it has made to the ASX. The clear intention is to get nailed down patents and IP, before getting too enthusiastic. Or run the risk of being a pump and dump target. Not something it is after.

I had lunch with Mohammad, and we talked about the Biochip research the company is doing and this was something I could understand. A huge jump for pathology and medical professional to be able to analyse samples quickly and for multiple markers. This technology is very exciting, and I could see the huge commercial pathways for this.

I think the market has focused too much on the Quantum side of things rather than the company as a chip maker and fabricator.

A machine that goes bing!

A Super cooled vacuum chamber. In space no one can hear you scream!

AXE is in the chip making business. It is making significant progress in Quantum chips. The room temperature aspect of Quantum is a hurdle. Creating a stable chip at room temperature is a giant step.

In the same building that AXE use, is the Microsoft lab and other high-tech users. Good place to be. At the centre of things.

Now the question that I am sure you will want answered is when does it get revenue? The key is to ensure you have IP protection and patents. No use blowing your trumpet and trying to do deals if you are going to end up in patent court in two years. Mohammad has a simple philosophy. The technology comes first. Everything else will flow from that technology.

The company is attracting smart people because it is at the cutting edge. One of the team I met yesterday was a smart guy from the UK that had just been lured away to join AXE.

It is not easy finding good people, in any business as most of us know. AXE is no exception, but the CEO is passionate about the technology, and it rubs off.

So, is it a buy? Yes, it is. But you have to be patient. This is not an overnight success story. This will take time.

The company has the resources and skills and patience to get it right. Mohammad likes to measure not twice and cut once but measure 50 times before that cut. That takes time.

The Human Health Biochip using A1 is exciting and AXE is developing this lab-on-chip technology that incorporates graphene, the thinnest material known, to provide an ultrasensitive biochemical interface for multi-disease detection and compatibility with digitised processing for biosensor device integration.

The announcements the company puts out are conservative. This is a serious company with serious resources which is building next gen technology in Quantum and Healthcare.

When I recommended it at 75c as my one stock long term portfolio I always thought it would be a 3-5-year story. I suspect it still is. The stock went nuts and hit 300c and I suggested taking profits. In hindsight, it went too hard and too fast and damaged its credibility. I hope that wasn’t down to me. I don’t think so. More the 'meme theme' at the time. Punters searching for a plaything. There will be milestones along the way and patents are crucial, so keep an eye out for those. Commercialisation will happen. First the tech, then the patents, then the door will be beaten down!

Remains a Speculative Buy but will require patience.