In the Q3, Applied Minerals Inc 's corporate clients experienced a deterioration by -16.19 % in their costs of revenue, compared to a year ago, sequentially costs of revenue grew by 7.76 %. During the corresponding time, Applied Minerals Inc recorded a revenue increase by 392.67 % year on year, sequentially revenue grew by 54.75 %. While revenue at the Applied Minerals Inc 's corporate clients fell by -14.28 % year on year, sequentially revenue grew by 12.92 %.
Customers of Applied Minerals Inc saw their costs of revenue deteriorate by -16.19 % in Q3 compare to a year ago, sequentially costs of revenue grew by 7.76 %, for the same period Applied Minerals Inc recorded revenue increase by 392.67 % year on year, sequentially revenue grew by 54.75 %.
Applied Minerals Inc's Comment on Sales, Marketing and Customers
The following discusses the markets into which the Company is marketing its DRAGONITE
and AMIRON products. It cannot be assured that we will be successful penetrating
these markets. The discussion does not discuss certain problems of selling into
these markets, which are discussed elsewhere in the Business section or in the
Risk Factors section.
DRAGONITE
The following is a description of the application markets to which the Company
is marketing its halloysite-based DRAGONITE products:
Molecular Sieves and Catalyst.
Molecular Sieves. A molecular sieve is a material with very small holes of precise
and uniform size. These holes are small enough to block large molecules while
allowing small molecules to pass. Many molecular sieves are used as desiccants
(substances that induce or sustain a state of dryness). Zeolites are a form of
molecular sieve that are crystalline with a skeletal composed of aluminosilicates.
We believe that DRAGONITE works very well with zeolites and helps entrap water
and impurities both within halloysite’s hollow tubular structure as well
as the porous outer walls, enhancing the drying of natural gas and air, the separation
of liquid from product streams, and the separation of impurities from a gas stream.
Catalysts. Halloysite can be used as a catalyst for fluid cracking for oil and
in methane to olephin. Crude oil petroleum must be processed in order to make
it into gasoline and other fuels. Part of that process includes cracking, whereby
large are two general types of cracking, thermal and catalytic. Catalytic cracking
involves the addition of a catalyst to speed up the cracking. The reactive nature
of halloysite lends itself to being an effective catalyst especially for high
sulfur oil. Halloysite can also be used as a support for catalysts, which are
applied to the halloysite as a coating.
Halloysite from the Dragon Mine was mined and processed as a catalyst for petroleum
cracking from 1949 to 1976.
Nucleation of Polymers; Reinforcement of Polymers
Nucleation. Plastics and polymers are composed of long molecular chains that form
irregular, entangled coils in a melted resin, the phase in which a resin is liquid
and its molecules can move about freely. In semi-crystalline polymers, the chains
rearrange upon freezing and form partly ordered regions. Examples of semi-crystalline
polymers are polyethylene (PE), polypropylene (PP), Nylon 6 and Nylon 6-6. Crystallization
of a polymer occurs as a result of nucleation, a process that starts with small,
nanometer-sized domains upon which the polymer chains arrange in an orderly manner
to develop larger crystals. The overall rate of crystallization of a polymer be
can increased by a nucleating agent. In plastic molding processes, especially
in injection molding, the plastic part must remain in the mold until crystallization
is complete (freezing). To the extent that crystallization is accelerated, the
time in the mold can be reduced, thereby resulting in productivity enhancement.
We believe that DRAGONITE added to a resin at a loading of just 1% can significantly
speed up the process of crystallization.
We believe DRAGONITE can be effective as a nucleating agent for both polyethylene
and polypropylene.
Reinforcement Fillers. Many plastics are reinforced with a filler to enhance the
mechanical properties of a polymer. Reinforced plastics, in certain instances,
can compete with stiffer materials like metal while also offering an opportunity
to reduce the weight of a manufactured part (“light-weighting”).
We believe that the utilization of DRAGONITE as a reinforcing filler results in
the improvement of one or more mechanical properties of a polymer such as modulus
(the measure of how well a polymer resists breaking when pulled apart), strength
(the measure of the stress needed to break a polymer), and impact resistance (the
measure of a polymer’s resistance when impacted by a sharp and sudden stress)
and can offer a value proposition when compared to certain traditional fillers.
Flame Retardant Additives
Flame retardants are widely used in flammable and flame resistant plastics and
are found in electronics, building insulation, polyurethane foam, and wire and
cable.
Plastic manufacturers typically mix or load a small amount of flame retardant
into plastic to lower the risk of flammability of their products. We believe that
DRAGONITE can be used as a partial replacement for Alumina Trihydrate (ATH) and
Magnesium Hydroxide (MDH) in certain applications and as a synergist to ATH and
MDH in other applications.
At typical loadings, ATH and MDH can adversely affect certain mechanical properties
of plastics. We believe that DRAGONITE, in conjunction with ATH and MDH, exhibits
a synergistic performance. Our research and development indicates that DRAGONITE
can be used to replace 50% - 75% of antimony trioxide (ATO) in plastic without
affecting flame retardancy, retaining the same rating under UL 94, the Standard
for Safety of Flammability of Plastic Materials for Parts in Devices and Appliances
testing.
Generally speaking, we believe the use of DRAGONITE instead of other fire retardant
products should allow a manufacturer to use less fire retardant. In addition,
using DRAGONITE may enable the manufacturer to reduce the weight of the manufactured
part.
Other clays compete in the markets for partially replacing ATH, MDH, and ATO.
Cementing
The Company markets its DRAGONITE product to the cement admixture market. Research
demonstrates how DRAGONITE, when added to a cement formulation, results in significant
improvements in tensile strength that are more than twice the improvements in
compressive strength while also reducing in permeability.
Binders for Ceramics
DRAGONITE is an effective binder for traditional ceramic products (any of various
hard, brittle, heat-resistant and corrosion-resistant materials made by shaping
and then firing a nonmetallic mineral, such as clay, at a high temperature). Binders
are substances that improve the mechanical strength of green ceramic bodies so
they can pass through production steps before firing without breakage. We believe
that DRAGONITE, when used as a binder, also effectuates an improvement in the
casting rate of the ceramic manufacturing process. This would equate to an increase
in manufacturing efficiency.
Cosmetics
Halloysite in DRAGONITE has a tubular shape that may be suited for an array of
cosmetic applications. We believe that the adsorptive nature of the halloysite
found in halloysite clay can serve as a hypoallergenic skin cleanser capable of
removing unwanted toxins and oils from the skin without the need for harsh chemicals;
of halloysite is also capable of exfoliating the skin; and, halloysite has been
shown to be capable of functioning as a non-irritating carrier and release mechanism
of cosmetic ingredients for a long lasting application.
Controlled Release Carriers
We believe that the halloysite present in DRAGONITE clay can act as an effective
carrier of active ingredients, enabling an agent to be released from the carrier
over an extended time frame. We believe that this controlled release capability
can be utilized in oilfield applications, paints and coatings.
AMIRON
The Company markets its AMIRON line of natural iron oxide-based products to the
pigmentary and technical application markets. The iron oxide resource at the Dragon
Mine has a high content of Fe2O3, The iron oxide is of high chemical purity, possesses
high surface area, fine grains, dispersability, good tinting strength, enhanced
color saturation, low color variation, and a low level of heavy metals content,
high surface area (25 m2/g – 125 m2/g and reactivity. For these reasons,
we refer to the Dragon Mine’s iron oxide resource as an “advanced”
natural iron oxide.
Pigments.
We can produce natural iron oxide pigments. These compete with synthetic iron
oxide pigments that are produced from basic chemicals. Synthetic iron oxides account
for approximately 80% of the market; natural iron oxides account for approximately
20%. Generally speaking, synthetic iron oxides cost much more to produce than
natural iron oxides and sell for prices significantly in excess of natural iron
oxides. Traditionally, natural iron oxides, due to their variance in quality,
have not been able to compete with synthetic in the pigment market. We believe
that the consistency of purity (high level of Fe2O3), desirable dispersability,
color consistency, and UV protection, as well as the lower price, of our iron
oxide should enable us to compete to some extent with higher priced synthetic
iron oxides.
The major focus of our efforts in the pigment area involves the use of pigments
for mulch. We are currently working to perfect a formula that does not run in
the rain. We also believe that our AMIRON pigments can be used for artistic paint,
semi-transparent and opaque exterior wood stain, semi-transparent cosmetics, food
contact colorants, and pharmaceutical applications.
Technical Applications.
Among the technical applications for our AMIRON are the following: adsorbents
(iron oxide can be used to remove arsenic, copper, lead, chromium, cadmium from
drinking water) and to remove contaminants and moisture from gases (under a supply
agreement, the Company may not sell, at least until 2020, iron oxide to remove
hydrogen sulfide from liquids or gases). Other applications include iron oxide
for use in agriculture, as an additive in pet food, and for use in steel casing
in foundries.
Applied Minerals Inc’s Comment on Sales, Marketing and Customers
The following discusses the markets into which the Company is marketing its DRAGONITE
and AMIRON products. It cannot be assured that we will be successful penetrating
these markets. The discussion does not discuss certain problems of selling into
these markets, which are discussed elsewhere in the Business section or in the
Risk Factors section.
DRAGONITE
The following is a description of the application markets to which the Company
is marketing its halloysite-based DRAGONITE products:
Molecular Sieves and Catalyst.
Molecular Sieves. A molecular sieve is a material with very small holes of precise
and uniform size. These holes are small enough to block large molecules while
allowing small molecules to pass. Many molecular sieves are used as desiccants
(substances that induce or sustain a state of dryness). Zeolites are a form of
molecular sieve that are crystalline with a skeletal composed of aluminosilicates.
We believe that DRAGONITE works very well with zeolites and helps entrap water
and impurities both within halloysite’s hollow tubular structure as well
as the porous outer walls, enhancing the drying of natural gas and air, the separation
of liquid from product streams, and the separation of impurities from a gas stream.
Catalysts. Halloysite can be used as a catalyst for fluid cracking for oil and
in methane to olephin. Crude oil petroleum must be processed in order to make
it into gasoline and other fuels. Part of that process includes cracking, whereby
large are two general types of cracking, thermal and catalytic. Catalytic cracking
involves the addition of a catalyst to speed up the cracking. The reactive nature
of halloysite lends itself to being an effective catalyst especially for high
sulfur oil. Halloysite can also be used as a support for catalysts, which are
applied to the halloysite as a coating.
Halloysite from the Dragon Mine was mined and processed as a catalyst for petroleum
cracking from 1949 to 1976.
Nucleation of Polymers; Reinforcement of Polymers
Nucleation. Plastics and polymers are composed of long molecular chains that form
irregular, entangled coils in a melted resin, the phase in which a resin is liquid
and its molecules can move about freely. In semi-crystalline polymers, the chains
rearrange upon freezing and form partly ordered regions. Examples of semi-crystalline
polymers are polyethylene (PE), polypropylene (PP), Nylon 6 and Nylon 6-6. Crystallization
of a polymer occurs as a result of nucleation, a process that starts with small,
nanometer-sized domains upon which the polymer chains arrange in an orderly manner
to develop larger crystals. The overall rate of crystallization of a polymer be
can increased by a nucleating agent. In plastic molding processes, especially
in injection molding, the plastic part must remain in the mold until crystallization
is complete (freezing). To the extent that crystallization is accelerated, the
time in the mold can be reduced, thereby resulting in productivity enhancement.
We believe that DRAGONITE added to a resin at a loading of just 1% can significantly
speed up the process of crystallization.
We believe DRAGONITE can be effective as a nucleating agent for both polyethylene
and polypropylene.
Reinforcement Fillers. Many plastics are reinforced with a filler to enhance the
mechanical properties of a polymer. Reinforced plastics, in certain instances,
can compete with stiffer materials like metal while also offering an opportunity
to reduce the weight of a manufactured part (“light-weighting”).
We believe that the utilization of DRAGONITE as a reinforcing filler results in
the improvement of one or more mechanical properties of a polymer such as modulus
(the measure of how well a polymer resists breaking when pulled apart), strength
(the measure of the stress needed to break a polymer), and impact resistance (the
measure of a polymer’s resistance when impacted by a sharp and sudden stress)
and can offer a value proposition when compared to certain traditional fillers.
Flame Retardant Additives
Flame retardants are widely used in flammable and flame resistant plastics and
are found in electronics, building insulation, polyurethane foam, and wire and
cable.
Plastic manufacturers typically mix or load a small amount of flame retardant
into plastic to lower the risk of flammability of their products. We believe that
DRAGONITE can be used as a partial replacement for Alumina Trihydrate (ATH) and
Magnesium Hydroxide (MDH) in certain applications and as a synergist to ATH and
MDH in other applications.
At typical loadings, ATH and MDH can adversely affect certain mechanical properties
of plastics. We believe that DRAGONITE, in conjunction with ATH and MDH, exhibits
a synergistic performance. Our research and development indicates that DRAGONITE
can be used to replace 50% - 75% of antimony trioxide (ATO) in plastic without
affecting flame retardancy, retaining the same rating under UL 94, the Standard
for Safety of Flammability of Plastic Materials for Parts in Devices and Appliances
testing.
Generally speaking, we believe the use of DRAGONITE instead of other fire retardant
products should allow a manufacturer to use less fire retardant. In addition,
using DRAGONITE may enable the manufacturer to reduce the weight of the manufactured
part.
Other clays compete in the markets for partially replacing ATH, MDH, and ATO.
Cementing
The Company markets its DRAGONITE product to the cement admixture market. Research
demonstrates how DRAGONITE, when added to a cement formulation, results in significant
improvements in tensile strength that are more than twice the improvements in
compressive strength while also reducing in permeability.
Binders for Ceramics
DRAGONITE is an effective binder for traditional ceramic products (any of various
hard, brittle, heat-resistant and corrosion-resistant materials made by shaping
and then firing a nonmetallic mineral, such as clay, at a high temperature). Binders
are substances that improve the mechanical strength of green ceramic bodies so
they can pass through production steps before firing without breakage. We believe
that DRAGONITE, when used as a binder, also effectuates an improvement in the
casting rate of the ceramic manufacturing process. This would equate to an increase
in manufacturing efficiency.
Cosmetics
Halloysite in DRAGONITE has a tubular shape that may be suited for an array of
cosmetic applications. We believe that the adsorptive nature of the halloysite
found in halloysite clay can serve as a hypoallergenic skin cleanser capable of
removing unwanted toxins and oils from the skin without the need for harsh chemicals;
of halloysite is also capable of exfoliating the skin; and, halloysite has been
shown to be capable of functioning as a non-irritating carrier and release mechanism
of cosmetic ingredients for a long lasting application.
Controlled Release Carriers
We believe that the halloysite present in DRAGONITE clay can act as an effective
carrier of active ingredients, enabling an agent to be released from the carrier
over an extended time frame. We believe that this controlled release capability
can be utilized in oilfield applications, paints and coatings.
AMIRON
The Company markets its AMIRON line of natural iron oxide-based products to the
pigmentary and technical application markets. The iron oxide resource at the Dragon
Mine has a high content of Fe2O3, The iron oxide is of high chemical purity, possesses
high surface area, fine grains, dispersability, good tinting strength, enhanced
color saturation, low color variation, and a low level of heavy metals content,
high surface area (25 m2/g – 125 m2/g and reactivity. For these reasons,
we refer to the Dragon Mine’s iron oxide resource as an “advanced”
natural iron oxide.
Pigments.
We can produce natural iron oxide pigments. These compete with synthetic iron
oxide pigments that are produced from basic chemicals. Synthetic iron oxides account
for approximately 80% of the market; natural iron oxides account for approximately
20%. Generally speaking, synthetic iron oxides cost much more to produce than
natural iron oxides and sell for prices significantly in excess of natural iron
oxides. Traditionally, natural iron oxides, due to their variance in quality,
have not been able to compete with synthetic in the pigment market. We believe
that the consistency of purity (high level of Fe2O3), desirable dispersability,
color consistency, and UV protection, as well as the lower price, of our iron
oxide should enable us to compete to some extent with higher priced synthetic
iron oxides.
The major focus of our efforts in the pigment area involves the use of pigments
for mulch. We are currently working to perfect a formula that does not run in
the rain. We also believe that our AMIRON pigments can be used for artistic paint,
semi-transparent and opaque exterior wood stain, semi-transparent cosmetics, food
contact colorants, and pharmaceutical applications.
Technical Applications.
Among the technical applications for our AMIRON are the following: adsorbents
(iron oxide can be used to remove arsenic, copper, lead, chromium, cadmium from
drinking water) and to remove contaminants and moisture from gases (under a supply
agreement, the Company may not sell, at least until 2020, iron oxide to remove
hydrogen sulfide from liquids or gases). Other applications include iron oxide
for use in agriculture, as an additive in pet food, and for use in steel casing
in foundries.
Sources:
Applied Minerals Inc’s official press releases and regulatory filings; CSIMarket.com’s market research; and the financial filings and press releases of other companies cited in this report.
Updated on:
Focus of this report: Applied Minerals Inc’s corporate clients.
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