TLG Ann: Talga Achieves Anode Project Milestones - 12th Sep 2023, 8:17am

[annb0t]

TLG Ann: Talga Achieves Anode Project Milestones
Price Sensitive: Y
Date: 12th Sep 2023, 8:17am

>>> Read announcement: Google: TLG Market Announcements

 

[Semmel]

Great announcement Let the ground be shoveled

Though I have trouble parsing this paragraph:
Finalisation of Project debt facilities with the selected banking consortium remains subject to
finalisation of approvals, completion of remaining due diligence and execution of definitive debt facility
documentation, which are expected to include customary project financing terms and conditions.
Drawdowns under the facility would be subject to customary conditions precedent. Customer
negotiations to allocate supply and underpin debt financing agreements are progressing.

Can someone with more finance terminology please unpack that and state it in longer form?

 

[cosors]

I have no idea about the financial latin either and therefore concentrate on:

"Following expressions of interest exceeding its debt target, Talga has completed selection of the banking consortium to provide all of the debt funding for the Vittangi Anode Project.
In addition to the European Investment Bank (ASX:TLG 20 June 2023), the consortium comprises multiple government-owned export credit agencies and European commercial banks with strong credentials in the energy transition and mining sectors."

 

[WheresTheMonkey]

Great announcement Let the ground be shoveled

Though I have trouble parsing this paragraph:
Finalisation of Project debt facilities with the selected banking consortium remains subject to
finalisation of approvals, completion of remaining due diligence and execution of definitive debt facility
documentation, which are expected to include customary project financing terms and conditions.
Drawdowns under the facility would be subject to customary conditions precedent. Customer
negotiations to allocate supply and underpin debt financing agreements are progressing.

Can someone with more finance terminology please unpack that and state it in longer form?

OK but this is very simplistic

Finalisation of Project debt facilities with the selected banking consortium remains subject to
finalisation of approvals, -------------------
Deadline 28 September for Supreme Court and possibly clarity on what the local council is going to do regarding the mining plan.

completion of remaining due diligence------------
The Financiers will likely want to look at TLG accounts and it having sufficient working capital to keep the lights on whilst construction is underway (we can expect a CR) and quality controls, quality of management i.e. technical expertise to complete the project on time and on budget

and execution of definitive debt facility documentation, ....................................................................
Mark did say in latest Webinar that even the lawyers drawing up the agreements were on holiday and there were still procedural bits to finalise. Did you all notice our CFO Melissa Roberts was at the ground break ceremony ?

which are expected to include customary project financing terms and conditions.....................
The usual loan agreements with $Amount, Term (Years), Security over Plant & Equipment plus Buildings , Payback, Default provisions etc

Drawdowns under the facility would be subject to customary conditions precedent.
Drawdowns are generally dependent on proof equipment or works have been manufactured/completed and is on a ship or train on the way to the Refinery or Mining site. This would be done by an independent Quantity Surveyor/Engineer who would sign off on the drawdown to pay for the Equipment or Earthworks/Building Construction once satisfied it is on it's way or has been installed. Basically they estimate % complete and then allow the drawdown upto that % of the facility plus a bit more. This prevents a Company drawing down more than it has completed and then running out of $ before construction is completed.e.g a $10M conveyor belt has been completed in Germany and is on its way to Sweden plus a $1M airconditioning unit/work has been completed on site. You would be entitled to drawdown say $11M plus a bit (10% ?) more for your overheads i.e. insuring the conveyor belt in transit and paying it's freight, paying the independent QS or engineer etc

Customer negotiations to allocate supply and underpin debt financing agreements are progressing.
Offtakes must be finalised and binding therefore guaranteeing your projected revenue before any financing is forthcoming

 

[JNRB]

The first domino has fallen.
Looks like everything else is lined up nicely for
> mine permit
>> off take
>>> financing
>>>> $$$

IMO With only a couple of weeks till the appeals deadline (I think supreme court appeal very unlikely), I expect to see shorts begin to make an orderly exit. My guess is that's why SP has managed to not fall back to far this time after our last rise. For me, time for one last top-up.

Also - congrats to Mark and the team on the progress. And fantastic work on the way this sod-turning ceremony has been promoted and communicated. I'm sure it's great for the company, but also great to see as a shareholder. Really appreciate also the little on-site videos.

 

[WheresTheMonkey]

The first domino has fallen.
Looks like everything else is lined up nicely for
> mine permit
>> off take
>>> financing
>>>> $$$

IMO With only a couple of weeks till the appeals deadline (I think supreme court appeal very unlikely), I expect to see shorts begin to make an orderly exit. My guess is that's why SP has managed to not fall back to far this time after our last rise. For me, time for one last top-up.

Also - congrats to Mark and the team on the progress. And fantastic work on the way this sod-turning ceremony has been promoted and communicated. I'm sure it's great for the company, but also great to see as a shareholder. Really appreciate also the little on-site videos.

Mmmmm.......Yes I kind of agree..............but............I'm still concerned about the Nimby Council delaying the Mining Plan forcing further "non quantifiable" delays even though such action by them would ultimately be futile.

 

[JNRB]

Mmmmm.......Yes I kind of agree..............but............I'm still concerned about the Nimby Council delaying the Mining Plan forcing further "non quantifiable" delays even though such action by them would ultimately be futile.

Yeah me too a bit. But Per Erik and rest of the management don't seem worried by it at all, so that gives me some comfort. I also ultimately believe that more people are in favour of the mine than opposed, just the opposition are louder. And ultimately the councilors don't get elected by the minority. I think it's mostly just bluster from the councilors to make it look like they're not just gonna roll over for every mining outfit that comes to town.

 

[BlackBeak]

The first domino has fallen.
Looks like everything else is lined up nicely for
> mine permit
>> off take
>>> financing
>>>> $$$

IMO With only a couple of weeks till the appeals deadline (I think supreme court appeal very unlikely), I expect to see shorts begin to make an orderly exit. My guess is that's why SP has managed to not fall back to far this time after our last rise. For me, time for one last top-up.

Also - congrats to Mark and the team on the progress. And fantastic work on the way this sod-turning ceremony has been promoted and communicated. I'm sure it's great for the company, but also great to see as a shareholder. Really appreciate also the little on-site videos.

I think the chance of them winning an appeal is 0, but I 99% expect them to lodge appeals to the Supreme Court anyway. They would want to delay the project as much as they could, and if they lodge an appeal it will take time to decide whether the appeals will be heard or not (similar to the court of appeals process which just took months). They could even lodge it to delay things and just withdraw it later knowing they won’t win. I don’t think the end of September is the end of the appeals process for us unfortunately.

 

[JNRB]

I think the chance of them winning an appeal is 0, but I 99% expect them to lodge appeals to the Supreme Court anyway. They would want to delay the project as much as they could, and if they lodge an appeal it will take time to decide whether the appeals will be heard or not (similar to the court of appeals process which just took months). They could even lodge it to delay things and just withdraw it later knowing they won’t win. I don’t think the end of September is the end of the appeals process for us unfortunately.

remember it's going to cost them quite some money to appeal... money that could be better spent on other battles. it's a big commitment to make just out of spite.

 

[Semmel]

I think the chance of them winning an appeal is 0, but I 99% expect them to lodge appeals to the Supreme Court anyway. They would want to delay the project as much as they could, and if they lodge an appeal it will take time to decide whether the appeals will be heard or not (similar to the court of appeals process which just took months). They could even lodge it to delay things and just withdraw it later knowing they won’t win. I don’t think the end of September is the end of the appeals process for us unfortunately.

I'm not as sure that they will appeal but I agree with you.

OK but this is very simplistic

Finalisation of Project debt facilities with the selected banking consortium remains subject to
finalisation of approvals, -------------------
Deadline 28 September for Supreme Court and possibly clarity on what the local council is going to do regarding the mining plan.

completion of remaining due diligence------------
The Financiers will likely want to look at TLG accounts and it having sufficient working capital to keep the lights on whilst construction is underway (we can expect a CR) and quality controls, quality of management i.e. technical expertise to complete the project on time and on budget

and execution of definitive debt facility documentation, ....................................................................
Mark did say in latest Webinar that even the lawyers drawing up the agreements were on holiday and there were still procedural bits to finalise. Did you all notice our CFO Melissa Roberts was at the ground break ceremony ?

which are expected to include customary project financing terms and conditions.....................
The usual loan agreements with $Amount, Term (Years), Security over Plant & Equipment plus Buildings , Payback, Default provisions etc

Drawdowns under the facility would be subject to customary conditions precedent.
Drawdowns are generally dependent on proof equipment or works have been manufactured/completed and is on a ship or train on the way to the Refinery or Mining site. This would be done by an independent Quantity Surveyor/Engineer who would sign off on the drawdown to pay for the Equipment or Earthworks/Building Construction once satisfied it is on it's way or has been installed. Basically they estimate % complete and then allow the drawdown upto that % of the facility plus a bit more. This prevents a Company drawing down more than it has completed and then running out of $ before construction is completed.e.g a $10M conveyor belt has been completed in Germany and is on its way to Sweden plus a $1M airconditioning unit/work has been completed on site. You would be entitled to drawdown say $11M plus a bit (10% ?) more for your overheads i.e. insuring the conveyor belt in transit and paying it's freight, paying the independent QS or engineer etc

Customer negotiations to allocate supply and underpin debt financing agreements are progressing.
Offtakes must be finalised and binding therefore guaranteeing your projected revenue before any financing is forthcoming

Dude, thank you so much! I would not have understood it on my own. Cheers!!!

I would not be surprised if offtakers want to see the finances sorted out before signing a contract while financers want offtakers sorted out before financing.. question is who is going to have chicken soup and who is eating scrambled eggs?

 

[cosors]

I think the chance of them winning an appeal is 0, but I 99% expect them to lodge appeals to the Supreme Court anyway. They would want to delay the project as much as they could, and if they lodge an appeal it will take time to decide whether the appeals will be heard or not (similar to the court of appeals process which just took months). They could even lodge it to delay things and just withdraw it later knowing they won’t win. I don’t think the end of September is the end of the appeals process for us unfortunately.

I suspect that even if they raise the money it won't take long to process. And that's because this time there's no information to be checked and no reconciliation to be done. That's all already done. The field for valid reasons has become tiny. So they could try to prove that the court made a gross mistake. Or they could try to prove that the court acted or ruled incorrectly.
I have read through every scrap. I don't see what they could meaningfully argue. So they could lastly take the financial risk and package the nothingness into many words that then have to be read. But nothing more. No holidays in between. I rather see the door closing for them. But I don't want to rule out a worst case scenario. But from my point of view that would be far quicker off the table than you suggest, I think.

 

[cosors]

I would not be surprised if offtakers want to see the finances sorted out before signing a contract while financers want offtakers sorted out before financing..

I know exactly what you mean. Please, not such a scenario!

 

[DAH]

I think the chance of them winning an appeal is 0, but I 99% expect them to lodge appeals to the Supreme Court anyway. They would want to delay the project as much as they could, and if they lodge an appeal it will take time to decide whether the appeals will be heard or not (similar to the court of appeals process which just took months). They could even lodge it to delay things and just withdraw it later knowing they won’t win. I don’t think the end of September is the end of the appeals process for us unfortunately.

I'm with you Blackbeak. I expect the Nature Conservancy to at least lodge hoping to sumply cause delays - I recall the fella at the court hearing... super emotional with minimal logic. Waste of donor funds IMO. Here's hoping we're wrong.

I think the councillors are all bark and no bite - they'll know there's minimal upside with potential downside being they P off their constituents or other stakeholders inc senior politicians who could easily jam up their future career progression. Not a good look and for what? A small NG mine that's critical to the EU.

Semmell, I'd be confident any binding offtakes will have a plethora of clauses which will certainly cover off on any failure by TLG to execute debt financing.

All in all we're looking strong!
After 10+ years accumulating, I can't believe where the SP is sitting given progress. How many of your other investments are having new legislative Acts created to ensure their success!?

 

[BlackBeak]

remember it's going to cost them quite some money to appeal... money that could be better spent on other battles. it's a big commitment to make just out of spite.

I couldn’t find anything about a cost to lodge an appeal on the domstol website: https://www.domstol.se/en/supreme-court/about-proceedings/appeals-and-leave-to-appeal/

I remember something being said about having to pay a bond to pay the opposing sides lawyers if you do appeal. I was curious if that’s paid when you lodge it or once the court has decided that they’ll hear your appeal. If it’s the latter, then it might not cost much to delay the project another month (it says on the above website that’s the usual processing time to decide if an appeal will be heard).

If it’s the former, I still think they could lodge and have a 99% chance of getting their bond back after the month and they’ve been denied. Or the 1% chance it will be heard and they can do some serious delays to the permit.

It seems to me their only cost that they won’t get back is to pay a lawyer to lodge the appeal?

I do really hope this is all over and done with and there’s no appeals at the end of the month. But I feel like it’s possible it doesn’t happen. Plus I’ve been in TLG for so many years it would feel weird to have permits done and be in the home stretch!

 

[Semmel]

Semmell, I'd be confident any binding offtakes will have a plethora of clauses which will certainly cover off on any failure by TLG to execute debt financing.

All in all we're looking strong!
After 10+ years accumulating, I can't believe where the SP is sitting given progress. How many of your other investments are having new legislative Acts created to ensure their success!?

Sure I am confident there is a way to open the gordian knot. Thats why I made fun of the chicken and egg problem Its just the irony of the situation that .. some shady companies get money thrown at them for no reason and Talga gets scrutinized like no tomorrow. To be fair, they are not entirely master of their own destiny with all the influencers having the power to prevent the mine, the factory, the planning, the whatever. Its gonna be all good in the end. Maybe they get the intense look under the hood because it all sounds too good to be true.

Wow 10 years! I am with the company since 0.42 Euros.. about 0.60AUD a few years ago. Feels like a long time, but 10 years.. thats a long, long time. Didnt you fear of it all melting away at some point? I mean, of 10 Talga like companies, maybe 1 will make it to profitability.. How could you tell so early? I guess, one can patiently wait 10 years for a potential 10x of ones investment, but still its a long way to walk. And other opportunities along the way always present them selfs which make you doubt your decisions.

 

[WheresTheMonkey]

I couldn’t find anything about a cost to lodge an appeal on the domstol website: https://www.domstol.se/en/supreme-court/about-proceedings/appeals-and-leave-to-appeal/

I remember something being said about having to pay a bond to pay the opposing sides lawyers if you do appeal. I was curious if that’s paid when you lodge it or once the court has decided that they’ll hear your appeal. If it’s the latter, then it might not cost much to delay the project another month (it says on the above website that’s the usual processing time to decide if an appeal will be heard).

I possibly posted that.

I know it occurs in Australia and the UK (similar systems) as the highest courts (which are always the most expensive) in the Land allow the respondent (TLG) to argue the the plaintiff (the NIMBYs) having exhausted all other avenues and being of limited financial means to be required to pay into the Court $X to cover the legal fees of the respondent (TLG) in case the NIMBYs lose.

Usually it goes only a limited way to covering the respondent's legal fees so if they (the NIMBYs) did pull out of the court case they probably wont get much of their bond back and nor should they as in many cases the legal work in the lead up to the hearing chews up most of the $$$$ for both sides.

Obviously the Swedish Court system differs to the English/Australian system but usually this type of "nuts and bolts" procedural stuff is common in Western Court Systems to discourage vexatious litigants (i.e. those that abuse the court system because they can).

 

[JNRB]

I possibly posted that.

I know it occurs in Australia and the UK (similar systems) as the highest courts (which are always the most expensive) in the Land allow the respondent (TLG) to argue the the plaintiff (the NIMBYs) having exhausted all other avenues and being of limited financial means to be required to pay into the Court $X to cover the legal fees of the respondent (TLG) in case the NIMBYs lose.

Usually it goes only a limited way to covering the respondent's legal fees so if they (the NIMBYs) did pull out of the court case they probably wont get much of their bond back and nor should they as in many cases the legal work in the lead up to the hearing chews up most of the $$$$ for both sides.

Obviously the Swedish Court system differs to the English/Australian system but usually this type of "nuts and bolts" procedural stuff is common in Western Court Systems to discourage vexatious litigants (i.e. those that abuse the court system because they can).

Exactly. There's systems in place, cost being part, to discourage people from making frivolous claims ie an appeal they know they have no chance of but are doing simply to delay a project.
Not to mention I'm sure a lawyer that gave them such advice would be in breach of some sort of professional code of conduct
(What!? Lawyers have a code of conduct!?! Yes most registered professionals do, even lawyers. They're just very good at skirting around theirs. But it can still put limits on them)

 

[DAH]

Sure I am confident there is a way to open the gordian knot. Thats why I made fun of the chicken and egg problem Its just the irony of the situation that .. some shady companies get money thrown at them for no reason and Talga gets scrutinized like no tomorrow. To be fair, they are not entirely master of their own destiny with all the influencers having the power to prevent the mine, the factory, the planning, the whatever. Its gonna be all good in the end. Maybe they get the intense look under the hood because it all sounds too good to be true.

Wow 10 years! I am with the company since 0.42 Euros.. about 0.60AUD a few years ago. Feels like a long time, but 10 years.. thats a long, long time. Didnt you fear of it all melting away at some point? I mean, of 10 Talga like companies, maybe 1 will make it to profitability.. How could you tell so early? I guess, one can patiently wait 10 years for a potential 10x of ones investment, but still its a long way to walk. And other opportunities along the way always present them selfs which make you doubt your decisions.

Hi Semmel,

I think if you asked Buffett he'd say 10 years is nothing! But for me, I was fixated on the energy transition for vehicles. I picked graphite, found Vittangi and MT and was sold. I had no idea how it'd play out but did my DD and watched it closely (still do of course). I only ever hold a few stocks or go index - right now TLG is front and centre and then some. Could probably have got better "returns" elsewhere but I love the Talga story, the ESG side and MT is thus far a legend in my mind. Very rare to have a CEO like him - he enables my conviction! And I'm confident if we look at returns over 20 years I'll be very pleased (as I hope you will be too). Cheers

 

[Semmel]

Hi Semmel,

I think if you asked Buffett he'd say 10 years is nothing! But for me, I was fixated on the energy transition for vehicles. I picked graphite, found Vittangi and MT and was sold. I had no idea how it'd play out but did my DD and watched it closely (still do of course). I only ever hold a few stocks or go index - right now TLG is front and centre and then some. Could probably have got better "returns" elsewhere but I love the Talga story, the ESG side and MT is thus far a legend in my mind. Very rare to have a CEO like him - he enables my conviction! And I'm confident if we look at returns over 20 years I'll be very pleased (as I hope you will be too). Cheers

I hope so too. Similar to you, I was looking for ways to invest in the mega cycle of energy transition. I started with Tesla and some time later found talga. I figured, why spread my money thin if I can put it all onto the winner (i.e. Tesla?) before it gets big? So I did, talga grew over time on top of it. My story with Talga is:
* green stock: I put money in stocks that help prevent a Venus atmosphere on Earth
* political: Talga is the only supplier of Anode with the potential of large volume production. That has not changed in the last 3 years since I am with the stock. In fact, it has gotten stronger
* Its early, pre-profit and we have a good chance to 100x the investment at some point.
* Good governance. I had stock in NVX as well, but they smelled rotton at the top. So I sold and put t all on Talga.

The only thing that is at moment questionable is the timing. Talga has the notorious problem that they listen too much to analysts of how the EV market will develop. And these analysts chronically underestimate the velocity and speed of the EV transition. Year after year, they have to up the estimates of how much stuff is needed and how soon the transition will be. Talga needs to get bold and up their ambitions and volumes big time. Its my only gripe with the company. Too small for the scale of the problem to be solved. I too like Mark a lot. Its such a contrast to the clowns at NVX 2 years ago, when I sold NVX for TLG. I missed the big hype on VUL too, but I am sure I am right about the company to succeed long term. But, I want them to get big. A lot bigger. Europe needs it politically, and Earth needs to to reduce CO2. This is true now more than ever.

Thats why I am so focussed on the expansion at moment. Its the cross roads that determine if Talga does what is needed or play it too save.

 

[Rayster]

I am very close to 10years since i started buying Talga. I got the tip from an Uber Black driver who was driving a Tesla in Sydney. Teslas were not that common place back then. We were talking about tech and the advances in things like EVs and associated tech and he told me he had a guy (MT i am assuming) in his Uber last week who ran a company who had just patented a process that could produce graphene in mass quantities. I knew of the material and thought it this could change the world. So my first buy was around $0.20 and have continually added since. A few years later there was a pivot to battery anode, i have to say I wasn’t a fan at first and was a little disappointed. At the time i couldn’t see the tidal wave MT could and MT made sense later that the volume of anode is what was needed to het the ball rolling on all the TLG elements. Over the years i started to feel that all the other companies i had invested in either didn’t show the up side TLG did or was too risky. In saying that i did look at VUL very closely when that was at $0.20 and chose to stay on the TLG horse and i have kick myself a couple of times. But i am 100% sure in the long run i have picked the right house. (Just could of made a few quick $$ on VUL along the way and hopefully got off the VUL horse a good while ago to be well and clear of it now.) Over the 10 years of my investment in TLG it has grown to a considerable sum that my nerve wouldn’t have ever allowed me to “let is ride”. If i wasn’t rock solid in my conviction with TLG. Everyone has their own perspective but for me TLG has been very well run and continually forged ahead, would i have liked permits quicker and be in production now? Sure! But building these foundations and relationships is very tricky in any business or industry. I was always going to stay in till 2024 (10 years) when i was going to start to enjoy my investment. Might stretch that to 2025 but still a once in a lifetime company and i an so happy i was here for the ride.