I was sent this yesterday - ASX Bet article on AXE It was posted last Friday I believe but well worth a read.................
r/ASX_Bets
•Postedby
u/Katerys11
3 days ago
The big & simpy Archer (ASX:AXE) DD
DD
Righto boys, it’s time to bring Archer’s glory and gains to the peopleof asxbets subreddit. And to continue my constant (allegedly shameful) publicadoration of the CEO Dr Mo. Ditch the candle stocks and come look at some realshit.
Archer Materials (née Exploration) is a deep tech stock with a range ofverticals, with its key projects being the 12CQ Quantum Computingroom-temperature chip, and the A1 “Lab on a chip” Biosensor. It’s history is inexploration and mining although it has been moving away from that to focus ontech. Suffice to say it has the building blocks of any good ASX penny punt allin one place; tech, biotech, and mining. I’m not going to get too into theweeds with the technological advantages of AXE's tech, partially because it’spretty heavy and partially because I’m not here pretending to be an expert onQC or biotech. But let me spell it out for you.
First let’s get the big one of out the way; room temperature quantumcomputing (QC). If you know the basics of QC, feel free to skip ahead. If not,savour Tech Daddy MC explaining in this video from IBM, with whom Archer is partnered via its Quantum network:
I mean, i prefer beard-era Dr Mo, but still, hi
Quantum computers do already exist, but they need serious infrastructureto create the cryogenic temperatures for completing computations, which is inthe realm of a dozen millikelvin, ie literally colder than outer space. Here'sa quick google image result of a traditional one;
Seriously, look at this f*ing thing
Sure, you can use the existing quantum computers like a service - send aproblem to an available QC like that one and get it to spit you out an answer -but that’s not going to be widespread enough to utilise this tech to it’s fullrevolutionary potential. There needs to be universal availability. So the raceis on to create a more commercially and technically accessible quantum computerand get it in the hands and devices of the end user. Few have claimed to bedoing this, but in the fine print you’ll find that only some of thecomponents are at room temperature, and others require cooling, which doesn’thelp reduce the heft of a device. Enter AXE.
AXE's 12CQ in-development chip is fully room temperature, and the qubitis a few hundred atoms wide. Now, before the tech nerdscome rushing at me for comparing a qubit (single element of a quantum chip,which in turn is a single element of a computer) with a full computer setup,yeah, ok, I know. The production of the final device in its entirety is still apipe dream, but Rome wasn’t built in a day and the next generation of computerswon’t be either. Consistent, focused progress towards the commercial chip goalis what is needed and Archer delivers. They share a steady stream of updates onthe tech and on the patent process. Recently the first patent was granted bythe Japanese Patent office. Yep that’s right - it’s starting to get patentsapproved. Truly remarkable stuff. Hell even the military wants a piece andthey’ve recently agreed to collaborate with the Australian Missile Corporationto support the government’s defence goals.
There is no other opportunity on the ASX to get into this space, and nota handful internationally that are as advanced as Archer. There is of course arisk that AXE is beaten to the punch, but with their novel approach I find itmore likely they will be alongside the teamsdeclaring quantum breakthroughs with its unique utilisation. The end productmay or may not be a fully working product but their strategic partnerships willallow them to develop the tech up to their potential and then leverage theirpartners’ strengths to make it a saleable good.
Is that not enough? Let’s talk about the A1 biosensing lab-on-a-chip.The A1 chip uses ultra thin graphene for use as a multi-disease rapid-detectionbiosensor. This tool essentially miniaturised existing lab tests and utiliseson-chip microfluidic channels for sorting, handling and analysing liquids andgas all on a chip only a few millimeters big. Unfathomable for the averagepunter. The miniaturisation is a difficult technical challenge but represents asignificant decrease in time to provide diagnostic testing occurring at thepoint-of-care. The biochip is being developed in-house with industry partners,in a move to speed up the time to commercialisation. The hiring of Dr RebeccaSoffe also highlights Archer’s knack for hiring brilliant people and settingthem to work on commercially-explosive deep tech in their area of expertise.
Still not enough? How about a history as a penny miner? Anyone familiarwith the penny stock lay of the land will need no further explanation than thelist of tenements and commodities below:
From the 2020 Annual Report
For the uninitiated, what we see here is not only a tonne of classicAussie mining goods, but other more niche stuff too. Kaolin and Halloysitenaturally observed at the Eyre Peninsula tenements (sold to NextGen) arehigh-value materials for deep tech applications.
The tenements (held in 3 fully owned Archer subsidiaries) have all beensold off to iTech, NextGen and Baudin, But of course they didn’t just sell thetenements, they’ve got shares in the purchaser and royalties to come. Some ofthese shares, namely the iTech shares, they passed directly on to theshareholders like the good guys they are. Allof them. 50 million iTech shares, slated to be listed on the ASX for 20c a popin September, with one iTech share being awarded for every 4.6 AXE shares. Soyou can tack 4.3c straight onto your AXE valuation. Nice. Meanwhile, Archer isretaining all the NextGen sales revenue and drawing a 2% smelter return, aka royalty,from its eventual production. So while it’s no longer an explorer, it stands toprofit from the work and diligence it had in the space for years to come, andto give AXE holders free exposure into further exploration or development ofits prior tenements.
Financially, AXE is robust for a penny. No cash flow to date, but solidmanagement of the funds they do have through clever partnerships and capraising. The latest newsletter had its cash in bank at $6.6M, which will onlybe boosted by the final sales of the mining tenements. These guys have done 2cap raises in the last few years; one at 18c and one at 60c. A buyer of eitherof these is laughing at the current $1 share price. There’s no whispers ofanother one on the horizon and with a quarterly spend of ~$0.5M, that leaves 11quarters funded (according to the 2021 March Q1 report). What other penny canboast such a runway?
And speaking of boasting, how does the performance look?
Sitting at a cool market cap of $222M, this baby has a tonne of room togrow for a long term holder. It’s grown from 8c in 2019, to a whopping $1-ishin 2021. Hell, this thing touched $1.24 at its peak. That’s 1100% gain over 2years, and it’s showing no signs of slowing down if you’re willing to sit on itlong term. And if you’re not? AXE pumps with the best of them - announcementssend this thing rocketing. Its IBM partnership sent it from ~18c to a whopping60c, and it’s first QC patent sent it from 50c to a peak of $1.24. If you’rethe type to park your capital somewhere and sell the news, this is a good one.Do not get caught out trying to jump in too late! I’m not into TA, but even Iknow this is a juicy chart;
Juicy
This is a future superstar selling (as of Friday) for under a dollar. Takea big hit of HotCopper Hopium, peak your risk tolerance, and jump on.
TLDR;
·Room temperature quantum computing is a massive technologicalbreakthrough, and AXE is the best vessel for it on the ASX, if notinternationally, with consistent progress updates and patent approvals startingto come in.
·Biosensing is another emerging deep-tech market AXE is using itsadvanced materials and expertise to commercially penetrate with development ofa “lab-on-a-chip” miniature graphene biosensor.
·Found some good shiny/expensive rocks and has a stake in the new ownersthey sold them to, plus royalties from production. Gave the holders all theshares their received from soon-to-be-listed-at-20c iTech, because they arelads.
·Lots of cash in the bank, nearly 3 years worth which is phenomenal for apenny.
·Chart goes up, slow over long period and fast in short bursts, so flipit or hold it to suit your investment strat.
·You’re seriously still investing in companies run by crusty old men whenTHIS EXISTS?
Bluesteel. Seriously, hi
Ok thanks! Bye!
(20min delay)