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TTT – Titomic

Australia has never been a slouch when it comes to new technology developments. The bionic ear (COH), Wi Fi, black box recorder, heart pacemaker, polymer bank notes, are just some. We punch above our weight.

Add a major player in one of the biggest global disruptive technologies – Titomic (ASX: TTT) – 3D cold metal spray. Titomic Kinetic Fusion more precisely.

The Titomic Kinetic Fusion (TKF) process makes 3D forms and coatings from powder feed stocks both metallic and non-metallic.

The additive manufacturing market is growing exponentially with estimated global sales of more than $7 billion. The total 3D printing industry could scale to over $90 billion in sales by 2023, and metals 3D printing is the fastest growing sector.

The Titomic/CSIRO patent for the TKF invention, a technological step up for this market, is a process for producing titanium or titanium alloy load-bearing structures, which comprises cold-gas dynamic spraying of titanium or titanium alloy particles on to a support member to form the load-bearing structure as a unitary construction.

This new metal TKF additive manufacturing process uses kinetic energy transfer rather than thermal energy for its application. Discovered originally by Russian scientists in the 1980’s cold spray uses pressured gas – a mixture of air, helium or nitrogen, heated to between 300-1100C. The heated gas boosts nozzle velocity to supersonic levels, where it’s mixed with a feedstock powder. The microscopic feedstock powder is only exposed to the hot gas for a short period of time and arrives at the scaffold, usually well below melting point.  The particles are accelerated to velocities between 500/1200m/s before impacting the surface of the scaffold. When the feedstock powder reaches critical velocity it plastically deforms and shears to create very strong bonds.  

Cold spray advantages are microstructural changes in the substrate material are relatively small or non-existent. There is an absence of in-flight oxidation and other chemical reactions. Thermal and oxygen sensitive depositing materials can be cold sprayed without significant material degradation – relevant for feedstocks such as Copper and Titanium. And formation of the embrittling phases is generally avoided. What comes out is a lighter, stronger and most importantly cheaper product. It avoids the need to make and join individual components, particularly when the structure is load bearing like an aircraft wing.

So, anyone from NASA to a car parts manufacture can have TTT produce a one off 3d printed titanium, stronger, lighter and cheaper than conventional manufacturing processes. Currently 80% of Titomic’s order book is from the USA – much of it defence related.

Titomic’s printing process is an order of magnitude faster than competing methods and materials are 10X cheaper. And with less wastage – some specialist aviation parts have a 90% production waste – and with aerospace industry profit margins of 10-20% eliminating waste by adopting the TKF process could become necessary for big parts manufacturers, like Boeing, to stay in business.

Healthcare (artificial knees, hips etc) is another industry amenable to TTT’s production process. Importantly for TTT, the CSIRO patent provides consideration for the whole manufacturing process. TTT is a whole- of- shop concept. It can manufacture, provide the necessary ingredients like titanium powder, and lease robotic printing equipment. Part of the global business plan is to set up “bureaus” in strategic locations which can service international clients.

TTT’s TKF process has significant advantages over other metal-based 3D technologies. Kinetic Fusion is highly scalable, operates outside of a vacuum chamber, allowing design freedom. Its robotic printers operate on a relatively large scale (45 m3 templates) compared too much smaller (1m3) for traditional 3D printing.  TTT printers run at a maximum rate of 45kg/hr deposition rate. Over time the company hopes to lift this deposition rate of 200kg/hr. This compares to existing rates of sub 1kg-9kg for other technologies.

Titomic’s share price understandably has been all over the place like a dog’s breakfast. The company’s business case/ technology story is not the easiest for investors to understand. And TTT has been gobbling up cash. The 12-month share price reflects this trading down from $2.70 to $1.50 currently.

It is difficult to value TTT – but it’s a fair bet break even revenue of around $24 million is still a couple of years away. This depends on how any robotic printers are sold at $1.5 million a pop. And how quickly the R and D cycle moves into full production.

Cash burn is about $3 million a quarter. This is expected to moderate in coming quarters. TTT has just raised $7 million at $1.70 a share. And the biggest vote of confidence in TTT, is a $2 billion technology fund manager from the USA, ARK. It stumped up all the cash raised for one of its ETF funds. 

Like many new technology investments, TTT is not a widows and orphans. Although its price volatility might have put some investors closer to the grave.

There are very few if any relevant peer valuations. But the high level of interest in the company’s production process from aviation to mining give rise to hope to a potential share price of around $3, as revenue increases.

So, invest modestly in TTT, like a venture capitalist, and go to the dark side!

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