SANTA ROSA -– With a potential $1 billion market for color-enhanced g emstones beckoning, Teos Group Inc. is ready to build a manufacturing operation in Santa Rosa and produce a treasure chest of multihued jewels.

The Teos partners, two former employees of Deposition Sciences Inc. in Santa Rosa, were gearing up to bring production of their original coated topaz in-house, but what's spurred them to move even more quickly is the current crackdown by the U.S. Nuclear Regulatory Commission on irradiated blue topaz.

"This opportunity is like low-hanging fruit," said Teos Chief Executive Officer Lee Pierce, who left the coating-innovator Deposition Sciences to market the invention of partner and scientist Dr. Don Rogers. Teos was formed in 2005.

The partners hold an exclusive licensing agreement with Deposition Sciences for its patented thin coating formula, which adds an opalescent sheen to colorless topaz and other stones.

They sell them to jewelry manufacturers and loose stone dealers.

Most colored topaz and some other gemstones get their tint from a bombardment of neutrons in a type of cyclotron. The longer the bombardment, the deeper the hue becomes. Dark blue topaz must be cooled for up to two years before it is safe to wear.

Nuclear Regulatory Commission requirements for importers of irradiated gemstones to be licensed and to test for radiation have been largely ignored. None are currently licensed, according to commission records, nor are there any facilities licensed to do the testing.

Reacting to the commission, the American Gem Trade Association issued a statement late last month calling for members to do their own radiation checks. In response, several major jewelry chains and department stores are considering, or have already stopped selling, blue topaz, according to a report in the industry publication NationalJewelerNetwork.com.

"The market for blue topaz is $1 billion," said Mr. Pierce. "Orders for our Tavelite non-irradiated stone are increasing, and we believe our technology can provide a stone very similar to the irradiated product."

The cost of such a product would be about the same as an irradiated stone — about $4 a carat — but no cooling period would delay time to market.

Teos is looking for a Series A round of $2 million in investment funding to step up R&D and production. The partners already have purchased their first piece of manufacturing equipment and expect to have it running by October. Up till now they've used contract manufacturers.

"Our business plan projects break-even in month nine, $44 million in revenues in year five," said Mr. Pierce, who is the vice mayor of Santa Rosa.

"We anticipate about 50 employees."

All manufacturing will take place in Sonoma County, he said.

According to Kenny Harrison, owner and president of Star Ring Inc. in Chatsworth, Calif., there's a lot of interest from retailers on an expanded line of Tavelite stones.

"The supply of colored stones is already limited, but the jewelry industry is constantly searching for new colors and different looks," he said.

Author - Loralee Stevens - North Bay Business Journal