Canada Connection: Neo Material Technologies

The vast natural riches of Canada remain mostly untapped, whether it’s oil, precious metals or other resources. In response, some of the nation’s best-performing public companies have focused on the exploration, processing and sale of natural resources found not only in Canada, but around the world.

Canadian-based Neo Material Technologies, Inc. (TSE: NEM) has found its place in delivering the rare earth elements that the world needs—with many of them coming from the untapped wealth being unearthed in China. For small-cap investors, Toronto-based Neo Material has remained mostly a hidden gem.

Founded in 1993, Neo Material finds and processes neodymium-iron-boron magnetic powders, rare earths and zirconium-based materials—substances required in many high-technology products ranging from catalytic converters to computers and consumer electronics, to precision motors. Its strength includes firmly holding onto proprietary manufacturing technology that it has successfully protected through the patent process.

Neo Material operates through two business divisions—Magnequench, a former General Motors Corp. (NYSE: GM) spin-off that focuses on magnetic technology, and AMR Performance Materials, which includes a neodymium production facility in Thailand. GM invented neo powder technology in 1982 and founded Magnequench to commercialize it. The two entities combined in 2005 through a reverse takeover of AMR to form the current Neo Material.
 
Neo Material, with some 1,300 employees deployed in 10 countries, was something of a pioneer in China ventures. AMR acquired stakes right out of the gate after its founding in 1993, with two joint ventures in existing rare earth facilities. It launched its neo powder manufacturing facility in Thailand in 1997.

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