Talga Updates and Discussion thread
- Thread starter Semmel
- Start date
WheresTheMonkey
Regular
Niklas Karlsson ex CFO Studsvik Group ( September 2021 to June 2024) which has over 500 employees in 7 countries and is listed on the NASDAQ OMX Stockholm
He moves around a lot........................https://se.linkedin.com/in/niklas-emil-karlsson
Seems like he is a contractor until they find a permanent
He moves around a lot........................https://se.linkedin.com/in/niklas-emil-karlsson
Seems like he is a contractor until they find a permanent
The Benchmark world presentation today.
Discussions with strategic investors under way at the project level. Does that mean giving up a proportion of resource ownership??
Over all very positive.
Debt consortium finalised.
Huge $EU70 MILL
Advanced off take discussions underway.
Discussions with strategic investors underway.
We are a high tech company with a world class resource
Discussions with strategic investors under way at the project level. Does that mean giving up a proportion of resource ownership??
Over all very positive.
Debt consortium finalised.
Huge $EU70 MILL
Advanced off take discussions underway.
Discussions with strategic investors underway.
We are a high tech company with a world class resource
WheresTheMonkey
Regular
I'm not sure if rhythm34 is on this forum but he/she attended one of the Benchmark Seminars being held currently and has summarised it as follows here (look towards the end of the thread)Hope I’m wrong
https://hotcrapper.com.au/threads/ann-talga-presentation-at-the-benchmark-world-tour-events.8448564/
WheresTheMonkey
Regular
LOL just realised Zeebot has sabotaged links back to there. Oh well you all know where to find it LOL
Hope this works... rhythm34 post
Iattended one of these events. My opinions only.
Talga
Macro
Mark’s presentation seemed well received and you can tell he is respected as a genuine expert in the field.
He knows the value of what Talga have, and as a major shareholder isn’t in it todo a deal that will see shareholders burnt. Being a founder led business at a pivotal moment like this is crucial as his interests are aligned with shareholders.
Given Talga’s position in the bottom decile of the cost curve, the strategic benefit of an OEM taking first-mover advantage by doing a deal with Talga is huge. What a strategically minded OEM should be doing is underwriting financing of Vittangi while agreeing to pay an above-market rate (ie above 2024/5 artificially suppressedChina market rate) for the majority of the initial 19,500tpa AAM, to enable theOEM to secure huge volumes (200,000tpa+) at a below-market rate in 2030 and beyond. If Talga can secure this kind of deal it’s a path to achieve the higher margins promised for Vittangi, then still good margins on expansion compared to competitors (because of place at bottom of the cost curve).
A few years ago MT said that they would prefer not to lock up 100% capacity into long term offtakes so as to leave some capacity to sell into the spot market. This means when prices spike they can capture the full benefits of any price cycle likePLS did so well in 2022.
This still seems like a very good strategy. Just need to get the first thing built –something MT acknowledged as the hardest part.
Iattended one of these events. My opinions only.
Talga
- The importance of Talga’s IP was emphasised, and how valued this by partners Talga is in discussion with. Talga owning it its own IP gives potential partners security in any long term offtake deals. They don’t get this same security with companies that are licencing IP from China (basically everyone but Talga?)
- MT is very positive on the recycling opportunity. He said he’s not aware of anyone else that has turned black mass into high performing anode material. A world-first? More IP.
- Expects all appeals to be concluded within months and finance package to follow
- He expressed some surprise that the EUR70m grant hasn’t been acknowledged more strongly by the market. Direct reference to the ~$200m market cap vs $100m+ free money
- Talnode-Si has made it back on to the presentation slides, but no detail on how far along commercialisation plans are. Fears of its demise have been greatly exaggerated! They can’t be telling the market about commercialisation if there are no current discussions underway.
- Aero lithium SQM JV - watch this space...
Macro
- Despite slowdown in EV sales growth, demand outlook for the future is still huge. Possibly bigger than any previous forecasts because of BESS growth. CATL’s listing docs back this up. Electric trucks also a good potential growth area for Talga.
- The need for ex-China supply chains was a recurring theme throughout the day, and the acknowledgement that China has the potential to cause serious problems for the viability of all ex-China automakers. I get the impression South Korea and Japan are taking this a lot more seriously than the EU, and can move quicker. I wouldn’t be overly surprised to see Talga do a deal in this space (maybe in addition to something EU based).
- The benchmark analysts were more bullish on the possibility of price bifurcation in materials markets than I have seen from other sources. Cobalt and Nickel discussed, but graphite anode material seems like the prime candidate for this given both its CO2 profile and the potential for major supply chain risks if China continues to dominate 99% of the industry. You would think the Northvolt situation was enough of a wake-up call about how they can weaponise graphite anode material supply.
Mark’s presentation seemed well received and you can tell he is respected as a genuine expert in the field.
He knows the value of what Talga have, and as a major shareholder isn’t in it todo a deal that will see shareholders burnt. Being a founder led business at a pivotal moment like this is crucial as his interests are aligned with shareholders.
Given Talga’s position in the bottom decile of the cost curve, the strategic benefit of an OEM taking first-mover advantage by doing a deal with Talga is huge. What a strategically minded OEM should be doing is underwriting financing of Vittangi while agreeing to pay an above-market rate (ie above 2024/5 artificially suppressedChina market rate) for the majority of the initial 19,500tpa AAM, to enable theOEM to secure huge volumes (200,000tpa+) at a below-market rate in 2030 and beyond. If Talga can secure this kind of deal it’s a path to achieve the higher margins promised for Vittangi, then still good margins on expansion compared to competitors (because of place at bottom of the cost curve).
A few years ago MT said that they would prefer not to lock up 100% capacity into long term offtakes so as to leave some capacity to sell into the spot market. This means when prices spike they can capture the full benefits of any price cycle likePLS did so well in 2022.
This still seems like a very good strategy. Just need to get the first thing built –something MT acknowledged as the hardest part.
Semmel
Top 20
Thank you! From the statement:
"Expects all appeals to be concluded within months and finance package to follow", I must concede that I was wrong.
I expected that we can sign contracts with the current state of permits, both in terms of off-takes and financing. However, that statement means we cannot sign financing contracts until the appeal has been dismissed. Which means, we probably will not sign off-takes either with strategic partners because the level of strategic investment from our partners is uncertain. Meaning, we are still stuck. That is at odds with the statement by Talga that the appeal rejection in October was holding the door shut and we can now make progress. Therefore, my expectation of signing off-takes now was misguided.
Question, what gives us confidence that THIS TIME its different and we will not have to wait for the conclusion of another layer of appeals?
We are probably going to see another 10% dilution within 3 to 4 weeks. Bullocks.
Hi Semmel.
That makes me wrong too! I don't think it's that black and white though, albeit MT did somewhat paint that picture first.
I'd be very surprised if debt couldn't be approved with the mining concession as a condition of settlement. Offtakes can certainly go binding, again with this condition and others. I think the lack of clarity on strategic project status as well as not yet being able to confirm innovation funds also play into the situation. There are several moving parts and at least the equity gap cannot be set until the debt package is clarified (inc grant funds on the side). So just maybe holding off whilst getting the mining appeal turfed by the Gov't (surely a certainty), allowing these other pieces to fall into place makes sense big picture. Or perhaps we are simply waiting on appeals to finalise debt, but if that's the case it's very likely by choice IMO.
As far as a CR goes, I'm hopeful your 10% is double what we'd need, being ~40m+ shares, especially with FID hopefully not far off (to bump the sp). With some luck, we might also get early access to some of the innovation grant funds for operational cashflow that can be allocated to the refinery side of things (slow the cash burn).
Let's hope MT can elaborate Thursday - I won't hold my breath given the sensitive nature of it all. I rest easy knowing he has more skin in this game than all of us.
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