Bristow goes with technology and selects the stock to watch in 2022
Welcome to 2022! I’m cautiously optimistic that this will be the year we get to put Covid in the rear-view mirror and get on with life without always waiting for the next shoe to drop (or a new variant to take hold). I’m happy to put 2021 in the history books and anticipate the bright future that could be. In that vein, I’d like to look ahead to what I think could be an exciting story for 2022. Now don’t get me wrong, I’m not saying this is my top pick or suggesting it will go up. This is simply my perspective on a company that has a lot going on that could be rewarded by the market this year.
The path of least resistance, after this week’s market action, would be to pick a uranium stock. Between how this group performed in 2021 and even more impressively, the first couple of trading days of 2022, it would certainly make for an easy article to write. I’m also a fan of junior base and precious metal mining companies, especially ones with plenty of results pending, but not today. The future is technology, so my exciting stock for 2022 is a technology company that posted a respectable 35% return in 2021 but is well positioned for 2022. It also happened to evolve out of a junior mining exploration company so it’s the best of both worlds.
If you haven’t figured out what company I’m talking about yet, it’s Zentek Ltd. (TSXV: ZEN), formerly known as ZEN Graphene Solutions Ltd. There is so much going on at Zentek it’s hard to know where to start. The Company currently describes itself as an IP development and commercialization company focused on next-gen healthcare solutions in the areas of prevention, detection and treatment. Zentek is currently focused on commercializing ZENGuard™, a patent-pending coating shown to have 99% antimicrobial activity, including against COVID-19, and the potential to use similar compounds as products against infectious diseases. The Company also has an exclusive agreement to be the global commercializing partner for a newly developed aptamer-based rapid pathogen detection technology. But that’s just the tip of the iceberg in my opinion.
The near-term catalyst is all about the antimicrobial coating ZENGuardTM, which was developed as a virucidal graphene-oxide (“GO”) based compound to be applied as a coating onto fabrics, which included personal protective equipment such as face masks in an effort to increase protection afforded by such products. In September 2021 the Company received Health Canada approval for the sale of ZENGuard™ coated masks and entered into a binding definitive license and supply agreement with Trebor Rx Corp. for the supply of ZENGuard™ to coat face masks and potentially other health care products. To date, Trebor has purchased, and the Company has delivered, quantities of ZENGuard™ coating sufficient for the production of 10,000,000 masks currently done via third parties. However, development is underway of the Company’s industrial scale facility to produce ZENGuard™ and to coat materials. The Company anticipates assembly and installation of the industrial scale production equipment to be completed during Q1 2022, at which point production is expected to commence while commissioning, optimization and production ramp-up occurs over the following two to three months. Once this industrial process is in operation, the Company expects the production capacity of ZENGuard™ to increase significantly.
Zentek recently closed a bought deal public offering and a non-brokered private placement for aggregate proceeds of C$33 million to assist in the build out of their facility as well as research and development, acceleration of business growth opportunities and working capital. Other growth opportunities include the development of a new carbon-based nanotechnology-enhanced icephobic coating to reduce ice accretion. The Company anticipates applications for aircraft, wind turbines, ocean vessels, and building structures to increase safety and efficiency outcomes in ice-forming weather conditions. In late November Zentek announced it had been awarded an R&D test contract through the Innovation Solutions Canada Testing Stream to test ZENGuard™ coated HVAC filters with interest from 3 different units within the National Research Council of Canada. Other innovations include the development of a stable diesel fuel additive, which increased the performance of diesel fuel by up to 10% in initial testing.
There is an awful lot going on at Zentek so I would encourage you to go check out their website to learn more because I’ve only scratched the surface of this stock to watch in 2022. Granted it’s not a small cap with a market cap of roughly $466 million after the closing of the latest capital raise earlier this week. Nevertheless, there are plenty of near-term catalysts with having their own production facility operational in the next few months and some pretty creative and unique opportunities being developed to propel this Company into the future.