A former junior mining company with $4 million of assets has rocketed to a market value of $160 million by transforming itself into a player in the hot nanotechnology sector. Stephane Robert, chief executive of Raymor Industries Inc., isn't shy about talking up the stock even after a more than a 550-per-cent increase in its value since early December.

"It's is a bargain right now because we'll be the best nanotech company in world," Robert said in an interview. Despite sales of just $1 million in 2005 and a net loss of $5.6 million, the stock has climbed from 43 cents in early December to a high last week of $2.80 on the TSX Venture Exchange.

Raymor stock closed at $2.42 yesterday. Raymor's losses last year are mainly write-offs of its mining assets.

Part of its success might result from regular promotional press releases that generate a buzz among penny stock investors on Internet message boards.

One of the company's press releases in April trumpeted that the firm had been named one of the top 100 nanotech companies in the world in the Fortune 500 edition of Fortune magazine. The company neglected to say that the recognition came in an advertisement placed by a nanotech trade association.

The TSX Venture Exchange took issue with another of the company's press releases that forecast earnings, halting the stock for a few hours until Raymor issued a clarification.

Raymor caught investors' attention when it announced it will be able this summer to produce 10,000 grams of single-walled carbon nanotubes a day at $20 to $30 U.S. a gram, using a process developed at the Institut national de la recherche scientifique in Varennes.

The going price for nanotubes can be as much as $500 U.S. a gram, depending on purity and quality, which discourages their use.

Nanotechnology is the science of manipulating matter at the molecular level. Single-walled carbon nanotubes have many qualities that make them ideal for reinforcing materials and for making heat or electrical conductors.

Their uses include military armour, battery electrodes, computer chips and golf clubs.

"Nanotubes can make an airplane lighter and save on fuel," Robert said. "They disperse heat more efficiently and de-ice the wings.”

"Just to meet demand in aerospace we will need more than the production equipment we have. We'll have to build more very soon," he added.

Analyst Marithy Khim of Union Securities put Raymor shares at a target price of $2.44 on a speculative buy rating. "They did a lot of marketing on their stocks. Otherwise, it's hard to justify the price," Khim said.

While such market gains are seen in other nanotech companies that have yet to turn a profit, Khim said it's too soon to say there is a bubble.

"Scientists agree that if we want to go forward, we have to go to nanotech. Is it a bubble? It might be too soon to say," Khim said. "Nanotech companies will have to make a profit one day or another."

Lux Research, a New York nanotech research and advisory firm, calculates the total value of products that use nanomaterials to hit $2.6 trillion in 2014. Most profitable applications of nanotech, an analyst said, will come from end-products that employ some nanotechnology rather than the raw materials themselves.

(www.nanovip.com)