TLG Discussion 2022

[cosors]

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Talga Group is pleased to invite you to register for the February 2024 Investor Webinar. Date: Thursday 1 February Time: 4:00pm AWST / 7:00pm AEDT What: Talga’s Managing Director Mark Thompson will provide an update on the Company’s Vittangi Anode Project and its recent corporate activities, followed by a Question and Answer (Q&A) session. Questions can be lodged online during the webinar or submitted ahead of time via email at info@talgagroup.com.

Register for the webinar​

 

[teilenswert]

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​ Talga Group is pleased to invite you to register for the February 2024 Investor Webinar. Date: Thursday 1 February Time: 4:00pm AWST / 7:00pm AEDT What: Talga’s Managing Director Mark Thompson will provide an update on the Company’s Vittangi Anode Project and its recent corporate activities, followed by a Question and Answer (Q&A) session. Questions can be lodged online during the webinar or submitted ahead of time via email at info@talgagroup.com.

​ Register for the webinar​

I have got used to the fact that most of my questions are ignored and Mark will cherry-pick questions to (not further) deteriorate the mood among webinar participants. Therefore, I limit myself to three questions:

• Assuming the mine gets final approval during February, what is the timeline of Offtake Agreements and funding (both announced for early 2023, but of course dependent on permitting)? Are all of these things a foregone conclusion or do we have to factor in all kinds of delays that are beyond our control?
• Due to known external factors, costs are going through the roof for what feels like all market participants, while the sales prices for raw materials and battery materials are in the basement. How far have we come from the assumptions in the DFS? What CAPEX, OPEX and revenues are now realistic?
• Talga allegedly has super-innovative products for future battery production (Talnode-Si, Talnode-E) - why do all competitors except Talga manage to make progress here and build up production capacities together with partners? Amprius Technologies, Enovix, Sila Nanotechnologies, Group14 Technologies - to name just a few. That way, Mark doesn't have to complain about why we might never got the valuation on the market that he had in mind.

I'm just frustrated that I didn't just invest my money in big tech companies (Nvidia & Co. ). But, as they say, shared suffering is half suffering.

 

[curiousmagpie]

This is brutal. 50% down in 2 months and increasingly pessimistic about this as every day goes by. What a disaster.

Going to be a very long road to recover even to $1 from this destruction.
At what point does an opportunistic auto company or battery manufacturer try and take this out? Would they even bother with the permit uncertainty?

Time to find out how good Tal-Si really is?

Have to admit that I broke my usual disciplined controls and over-invested in this one. Hope everyone else is doing ok.

 

[anbuck]

I'm still trying to understand what has caused the graphite oversupply. I realize that existing graphite producers have expanded production and also that the Chinese economy is soft, but I don't see anything so far that would diverge greatly from what we would've expected a year or two ago. The fact that existing producers were planning on expanding production was known and while the Chinese economy has softened, it's not like EV sales have fallen off of a cliff, so I don't quite get why projections of graphite prices were so off. I guess it's just that graphite supply has grown slightly faster than expected, but EV demand has grown slower than expected?

I'm not so worried about the courts. They've taken much longer than they should, but I think we'll be past that soon enough and future expansions will likely be covered by legislation that forces the permitting process to complete within two years. I'm more concerned about when/if graphite prices will recover. I don't have a way of know the answer to that because I don't fully understand the factors that have led us to the current pricing situation, so can't begin to predict future pricing.

 

[curiousmagpie]

I'm still trying to understand what has caused the graphite oversupply. I realize that existing graphite producers have expanded production and also that the Chinese economy is soft, but I don't see anything so far that would diverge greatly from what we would've expected a year or two ago. The fact that existing producers were planning on expanding production was known and while the Chinese economy has softened, it's not like EV sales have fallen off of a cliff, so I don't quite get why projections of graphite prices were so off. I guess it's just that graphite supply has grown slightly faster than expected, but EV demand has grown slower than expected?

I'm not so worried about the courts. They've taken much longer than they should, but I think we'll be past that soon enough and future expansions will likely be covered by legislation that forces the permitting process to complete within two years. I'm more concerned about when/if graphite prices will recover. I don't have a way of know the answer to that because I don't fully understand the factors that have led us to the current pricing situation, so can't begin to predict future pricing.

I think the short answer is the speed and size of the (Chinese) supply response of synthetic graphite has been bigger than analysts expected in the last 12-18 months. And as yet no one is willing to pay the green premium, so price is king.

EV demand for 2023 has actually been hitting expectations, even exceeding in some cases (eg both Bloomberg and Goldman Sachs had 14-15% EV penetration in 2023 as a bullish case - actual numbers tracking at about 16%).
Although anecdotally I have been seeing a shift in the general narrative/sentiment around electric vehicles changing more to the negative in the last 6 months as it gets dragged into an issue for the culture wars.

Agree about not worrying about the courts per se - the permit will get approved. The issue is how delays have affected funding and subsequent additional dilution as a result. I used to base by conservative Talga valuation case on around 500m shares on issue - have to be realistic and anticipate anything up to double that now, maybe more.

 

[WheresTheMonkey]

Don't get too excited if you see a TLG announcement this week. It wont be for the permits just the Quarterly which is due by 31 January

 

[ACinEur]

This is brutal. 50% down in 2 months and increasingly pessimistic about this as every day goes by. What a disaster.

Going to be a very long road to recover even to $1 from this destruction.
At what point does an opportunistic auto company or battery manufacturer try and take this out? Would they even bother with the permit uncertainty?

Time to find out how good Tal-Si really is?

Have to admit that I broke my usual disciplined controls and over-invested in this one. Hope everyone else is doing ok.

Ditto…

 

[WheresTheMonkey]

I think the short answer is the speed and size of the (Chinese) supply response of synthetic graphite has been bigger than analysts expected in the last 12-18 months. And as yet no one is willing to pay the green premium, so price is king.

EV demand for 2023 has actually been hitting expectations, even exceeding in some cases (eg both Bloomberg and Goldman Sachs had 14-15% EV penetration in 2023 as a bullish case - actual numbers tracking at about 16%).
Although anecdotally I have been seeing a shift in the general narrative/sentiment around electric vehicles changing more to the negative in the last 6 months as it gets dragged into an issue for the culture wars.

Agree about not worrying about the courts per se - the permit will get approved. The issue is how delays have affected funding and subsequent additional dilution as a result. I used to base by conservative Talga valuation case on around 500m shares on issue - have to be realistic and anticipate anything up to double that now, maybe more.

Don't worry you are not alone. This will turn. Lithium and Nickel are getting smashed at the moment and graphite (or should I really say anode producers) are collateral damage.

The Chinese have allegedly found a massive new lithium resource in one of their provinces (https://www.globaltimes.cn/page/202401/1305640.shtml) plus Indonesia is digging up nickel at a much more cost effective rate than BHP Billiton.

Baby and Bathwater come to mind

 

[curiousmagpie]

Don't worry you are not alone. This will turn. Lithium and Nickel are getting smashed at the moment and graphite (or should I really say anode producers) are collateral damage.

The Chinese have allegedly found a massive new lithium resource in one of their provinces plus Indonesia is digging up nickel at a much more cost effective rate than BHP Billiton.

Baby and Bathwater come to mind

well yes things certainly could be worse - trying to get a capital intensive nickel project out of the ground now would be a death sentence for the company (just look at QPM)

while the battery materials sector has copped a flogging I don't think it's completely right to say that graphite/anode is just collateral damage of lithium/nickel/cobalt prices falling, as to me that would imply that anode pricing is going just fine. Clearly not.

What I'm looking out for (and will be asking in webinar where appropriate):
-any hint that anyone anywhere is currently willing to pay the fabled "green premium"
-any news from Talga that state funding (eg grants) is something being actively worked on and specifically whether receiving a grant in 2024 is a possibility
-how long the ramp-up phase for Vittangi anode production is from the end of the commissioning period to full nameplate capacity run-rate. The DFS seems to suggest this will hit full run-rate immediately upon completion of the plant, whereas Syrah are currently saying 18 months from completion to reach full run-rate of just 11kpta at Vidalia. Why?
-the upcoming Syrah quarterly presentations as it usually include some very useful information on anode pricing, supply/demand, and global production so
-Why are Talga not presenting at Benchmark's EU event in March especially as it's in Sweden? How credible are Benchmark now anyway after their Li & anode forecasts from as recently as 2022?

I really hope Mark fronts up to some tough questions in the webinar. He clearly can't be happy about the destruction of his own wealth and the business he's spent 10+ years building, so would be nice to see a bit of fire from him next week.

 

[Semmel]

I think one of the reasons the share price is so low is because fund managers anticipate that funding for the mine is done issuing new shares. That lowers the share price in anticipation of a huge funding round, which is a vicious circle because it increases the number of shares that need to be issued. However, mark repeatedly said that funding is not done through company shares but by project partnerships. There is no evidence for either one, so it's speculation but I think fund managers just don't believe Mark here.

The mood on EVs gets negative primarily because traditional OEMs fail to make compelling and affordable EVs. Also they failed to make a compelling charging infrastructure. Teslas supercharger network is the only thing that works reliably. Imagine you drive a gas car and 50% of the fueling stations are broken and there would be way less stations.. wouldn't work! As the OEMs realize they dropped the ball, they start lobbying about EVs being shit to safe their business. Slowing down demand. And I don't say that as a Tesla fanboy, which I am, but no one knows that in real life. I had multiple conversations where people told experience with EVs, and the prevailing narrative is: if you want an EV, get a Tesla. But it's so expensive.. which it isn't, really, but that's the perception.

My point is, European EV manufacturers are shit and that is a problem for Talga. We still have a lot of battery plants going and I believe there is growing demand on anode from that front. But I have a hard time seeing an incentive to use green battery materials when you can just fake your way out by buying CO2 certificates from the hydro power plant. Hopefully the EU implements the import tarrif soon. To make the economics more compelling.

 

[WheresTheMonkey]

-how long the ramp-up phase for Vittangi anode production is from the end of the commissioning period to full nameplate capacity run-rate. The DFS seems to suggest this will hit full run-rate immediately upon completion of the plant, whereas Syrah are currently saying 18 months from completion to reach full run-rate of just 11kpta at Vidalia. Why?

That's a fair enough question but there is a helluva lot more processing for Syrah's ore than Talga's. Remember we have an Anode mine Syrah has a Graphite mine

Note from Syrah's webpage regarding Vidalia

• Value add processing: Milling, purification and surface treatment
• Product: 18-micron and 12-micron coated purified spherical graphite

Vidalia Active Anode Material Facility

A globally significant vertically integrated natural graphite and battery anode company, supplying battery and industrial markets with high quality, environmentally differentiated and customer qualified products.

www.syrahresources.com.au

 

[WheresTheMonkey]

I think one of the reasons the share price is so low is because fund managers anticipate that funding for the mine is done issuing new shares

Yes definitely. In fact if you look at Lithium and Nickel producers and their production scale backs in Australia fund managers would rightly be thinking there is no way TLG will get any Debt funding at all so it must be from Equity

If MT and Melissa Roberts can indeed pull a rabbit out of the hat then we will all be smiling.

Syrah has already received a US$220M grant and is in line for a US$300M loan. So for TLG given the uniqueness of the project in terms of location, quality, the likelihood it will be declared a strategic project, and the domination by China of the graphite space and doing so with the help of their government subsidies anything could be on the cards

 

[WheresTheMonkey]

And if any of you have the time and wish to have a crack at creating a Project Financing Model here be my guest LOL

Project Finance - Definition, Modeling Example

Project finance allows shareholders to raise finance for a project without the lenders having a claim on their other assets.

www.fe.training

 

[cosors]

About graphene and little mention of Talga

Graphene Roadmap Briefs (No. 3): meta-market analysis 2023
31 January 2024
https://iopscience.iop.org/article/10.1088/2053-1583/ad1e78/pdf

 

[WheresTheMonkey]

Did anyone have a look at the latest Top Shareholders ?

UniSuper have crept onto the list at Number 3. They might lend their shares for shorting but by themselves would likely be a long term holder
Looks like they took a chunk of the Kinetic holding.

I'd hazard a guess and say UBS looks like it might be a shorter in the previous Top 5 yet out of this Top 5

Pentwater have added to their position.

MT has dropped due to the $30,000 limit of the last SPP not being enough to keep him at 4%. Same with Ellerston and Yandal.

Top 5
Pentwater Capital Management 4.2%
Mark Thompson – M Director 3.8%
UniSuper 3.1%
Yandal Investments 1.6%
Ellerston Capital 1.5%

Previous Top 5 (November Webinar)
Kinetic Investment Partners 4.7%
Mark Thompson – M Director 4.0%
Pentwater Capital Management 3.6%
UBS AG (Private Banking) 3.2%
Ellerston Capital 1.7%
Yandal Investments 1.7%

UniSuper is an Australian superannuation fund that provides superannuation services to employees of Australia's higher education and research sector. The fund has over 620,000 members and $120 billion in assets (funds under management and total member accounts at 7 July 2021).[1]

UniSuper is a not-for-profit company whose shareholders are 37 Australian universities and is governed by a corporate Trustee, UniSuper Limited. All the universities have representation on the Consultative Committee.

 

[Diogenese]

​ View this email in your browser ​

​

​ Talga Group is pleased to invite you to register for the February 2024 Investor Webinar. Date: Thursday 1 February Time: 4:00pm AWST / 7:00pm AEDT What: Talga’s Managing Director Mark Thompson will provide an update on the Company’s Vittangi Anode Project and its recent corporate activities, followed by a Question and Answer (Q&A) session. Questions can be lodged online during the webinar or submitted ahead of time via email at info@talgagroup.com.

​ Register for the webinar​

We know 9% Talnode Si improves capacity by 40%, so how much does 50% increase capacity? Is it linear or asymptotic?

... and what is the cost differential?

I guess the Si expansion prevents the use of much greater Si%.

 

[Monkeymandan]

We know 9% Talnode Si improves capacity by 40%, so how much does 50% increase capacity? Is it linear or asymptotic?

... and what is the cost differential?

I guess the Si expansion prevents the use of much greater Si%.

View attachment 55744

Linear as I understand it, however the swelling would be prohibitive at higher concentrations. MT spoke to this a while back. You could dose at 50% tal-Si, but it’s not the design intent - your cycle life would be prohibitively short. So it’s sweet spot is probably around the 5-20% mark, where significant gain in capacity is worth the marginal degradation of cycle life.

 

[Diogenese]

Bullish. As. Fuck

Linear as I understand it, however the swelling would be prohibitive at higher concentrations. MT spoke to this a while back. You could dose at 50% tal-Si, but it’s not the design intent - your cycle life would be prohibitively short. So it’s sweet spot is probably around the 5-20% mark, where significant gain in capacity is worth the marginal degradation of cycle life.

Thanks MMD,

So if you had an application which required only infrequent recharging or disposable* battery (eg, smoke detector ...), a high Si load could be useful?

* Of course, when I say "disposable", I mean "recyclable".

 

[Monkeymandan]

Thanks MMD,

So if you had an application which required only infrequent recharging or disposable* battery (eg, smoke detector ...), a high Si load could be useful?

* Of course, when I say "disposable", I mean "recyclable".

Yes - a device with a short lifespan or where you want whopping capacity for a one-off (or few) uses, that would be your use case for a very high silicon load. Kamikaze drone springs to mind.

I think a big use case for tal-Si will in fact be at the opposite end of the scale though, to make LFP and other cheaper battery chemistries comparable to NCM etc in terms of performance.

 

[WheresTheMonkey]

Yes - a device with a short lifespan or where you want whopping capacity for a one-off (or few) uses, that would be your use case for a very high silicon load.

Defibrillators