This is objectively v good news today.
I've started accumulating a position again because 40c seems like a good entry given this news. Starting small because the market's underwhelming reaction to this is keeping me hesitant.
There still doesn't seem to be a lot of confidence that Talga can deliver this project. I would expect a €70MM grant to send this above 50c.
If the full €70MM is awarded this = approximately 30% of equity capex funded and a significant reduction in future dilution.
Why isn't there stronger buying here?
The market must be thinking like me: we need more solid progress to regain trust and confidence in the company.
Positive tailwinds
- EV market picking up again (see TSLA overnight)
- EU exchange rates falling (debt funding cheaper)
- Enviro permit case progressing through the SC
- Local issues progressing. The Green Acceleration office seems to be effective
Concerns
- Banking the €70MM is not a certainty. I've reviewed previous EU innovation grants and about 93% of projects make it from "grant preparation" phase to signing (source: 30 of 32 signed & 15 of 16 signed). I don't know why projects failed at the last hurdle.
- Anode pricing & state of NG market is not recovering yet
- State of the EU battery manufacturing industry (a mess)
- Lack of news on Tal-Si (I think there is a possibility this is a fizzer)