The balance though looks terrible to be honest. We spend about 11M this quarter, we had 4M in the banks from last quarter and got 30M from issuing shares. Now, we have 23M left. Thats 2 quarters at current run rate. If we dont get finance loan this quarter, there will be new shares issued next quarter. This burn rate is too high for a company like Talga in my opinion.
Lets talk about the costs for a minute.
Payments for
(a) exploration & evaluation (i) (4,690)
(b) development (ii) (1,810)
(c) qualification plant production (iii) (1,624)
(d) staff costs - corporate (990)
(e) administration and corporate costs (2,008)
Cant do much about staff costs without firing people, we cant do that. administration and corporate costs is up from 800M last quarter. Why? Can we expect this to go down again? Development is Talnode Si, the UK center and similar activities. We kind of need these as Talnode-Si and additives can become a very significant part of the Talga story. Qualification plant production is the EVA plant. We kind of need that as well, no way to cut costs there.
And then there is the elephant in the room, 4.5M for exploration & evaluation, which includes the footnote "Exploration and evaluation includes Sweden trial mining, technical & FEED studies, and exploitation permitting costs". So, the trail mining is done, is it? Or is it on going? The FEED studies are done. Leaving the exploitation permitting costs. Is the permitting process this expensive? This should also include drilling and the resource upgrade costs. With drilling being paused, I hope this number goes down significantly next quarter.
Nevertheless, we need the financing being done asap, I dont want Talga to issue new shares twice a year to cover its running costs. Its gonna take at least until 2025 before Talga becomes cash flow positive. That is at current rate about 80 to 100M of running costs. Even with the loan of EIB and others, which is supposed to cover building the mine and processing facilities, there are probably plenty of new shares to be issued on the way. I hope the EIB is making a decision soon.
