General Discussion, page-78

@petere I'm glad you included the Adamas interview with Niron from 2021. Lot's of background info on their iron-nitride PM's, including a long development history. The last question and Adamas is instructive.

Firstly, it provides a time-line to commercial production. Pilot plants are the sensible step between lab and commercial scale factories to prove the manufacturing and make required improvements before committing very large sums to building giga-factories. Pilot plants provide sufficient quantity of commercial samples for off-take companies to test and prove it meets all their specific performance requirements before they invest large sums/risk/reputation in a new product.

Secondly, the complete lack of mention by Adamas during their Tesla take-down 2 March 2023 raises questions. Is Niron full of the proverbial, is the US gov throwing money at a dead duck last year, did Niron just present at the ARPA-E Energy Innovation Summit to keep up the charade? Or, is Adamas talking their own book (ie hundreds of paying clients who ALL want their investors, off-take partners confident to keep funding development)? What happened to... "Niron’s iron nitride material is impressive and has potential to alleviate many of the price, supply, performance and environmental challenges associated with incumbent magnet materials, such as ferrite and NdFeB."? Obviously that dude from Neo is talking his own book, desperately, after shares fell from $22 to $8 in around 18 months (and HAS borrowed $150M from Twiggy to buy NEO shares at $15, idiots!).



In another interview recently Niron said they had shipped commercial sample Gen 1 Iron-notride magnets in 2022 and were on track to ship Gen 2 samples in 2023 from their pilot plant, with full commercial production into the market planned for 2025. Say they have problems with the pilot plant, quality control and the time line slips out another couple of years to 2027 for full commercial licensed production. That will still probably beat VHM into production, but that's not the big issue imo. VHM like all other REO developers need ~5 years to pay back capex and debt interest before that very large capex makes even $1 actual return.

If niron's RE-free magnets are as good as they say and think (raised private funds in 2021 to build pilot plant) investors and lenders look like they are picking up pennies in front of the proverbial bulldozer... That's the big risk and real issue with Tesla's guidance. What RE price level will RE-PMs be competitive with Nirons iron-nitride? If Niron's magnets are cheaper, better, supply chain risk-free then RE-magnets are dropping in price or going the way of the Dodo. It's a hell of a binary gamble investors and lenders in new developers are being asked to take on >$500M investments.

Trouble is, what if Niron magnets are fatally flawed for some reason? The world still wants RE-PMs, so it can't yet stop backing a certain amount of western RE supply chain development just in case. OK, so maybe new axial flux motors will make non-NdPr lower performance magnets satisfactory replacements because of the huge potential improvements in cost and output they promise. Maybe building out a huge western RE0-to-REmagnet supply chain is simply too expensive and technically challenging given global electrification growth... a bespoke market but growth dead-end even if Niron fails?

So many questions, I certainly don;t have all the answers, but been burned over the years enough to recognise risk when I see it. Higher risk = lower share prices, which makes for higher potential returns should the gamble pay off. Not helpful for current shareholders who see immediate mark-to-market losses now, or for higher dilution given lower share prices in the future (the vicious cycle of dilution begetting more dilution). An interesting space indeed, only time will tell...

GLTAH