TLG Ann: Trading Halt - 6th Oct 2022, 9:54am

[annb0t]

TLG Ann: Trading Halt
Price Sensitive: Y
Date: 6th Oct 2022, 9:54am

>>> Read announcement: Google: TLG Market Announcements

 

[BigDog]

No comment until the details are provided

 

[Lolitsalan]

From AFR


Listed graphite explorer Talga Resources had Euroz Hartleys and Morgan Stanley drumming up interest in a $20 million share placement on Thursday morning.

Graphite’s used in electric vehicles. Paul Morris/Bloomberg

The brokers were offering shares in Talga at $1.10 a pop, a 17per cent discount to the last close and 16.2 per cent lower than the 10-day volume weighted average price.

The term sheet sent to potential investors said Talga would use the proceeds for its European projects Vittangi (engineering, early works and long-lead items), Niska (drilling to expand resources), EVA production and trial mine costs, and for general working capital and offer costs.

It planned to run a $10 million share placement plan later at the same offer price as the placement.

Bids into the placement were due 5pm Thursday.

Talga had a $404 million market capitalisation before the raising. It had negative cashflow of $9.09 million for the June quarter and had $13 million cash in the bank.

 

[ACinEur]

If this turns out to be true it’s disappointing and goes against MT’s optimism. I would really have like a European institution on the register. Oh well top up time once the dust has settled and we see the fine print

 

[WheresTheMonkey]

We should se how well the placement went sometime this afternoon (Perth minus 3 AEST so morning for them).............................hopefully

 

[BigDog]

Lots of questions with most leading to why now if all is on track for binding agreement November and permits Q1 ‘23?

Optimistically, this gives TLG plenty of cash for the next 12-18months with allowance for further exploration and long lead items (with minimal dilution, 6.5%) which keeps us on track for production in 2024.

Pessimistically, this is a hint that Q1’23 timeline for permits is known to be a no go and time can’t stand still until permits are granted.

Could be wrong on each of these and shortly after the SSP the binding agreement drops and shareholders win especially the ones that jumped on for their last chance at bargain basement prices…. I wish to dream!

 

[curiousmagpie]

If you read between the lines of the placement announcement, there was only $5m cash in the bank at 30 September. So they burned $7m in Q1FY23, which would leave the next quarterly (due end of this month) showing less than 1 quarter of funding left. That would raise red flags of Talga as a going concern, so would ACC's DD have allowed them to sign a binding offtake with that info? My assumption is no.

Given this cash situation it's no surprise it's been done now. Were expectations that this raise could have been done at a higher SP following the initial non-binding offtake announcement? Probably. But here we are.

 

[WheresTheMonkey]

If you read between the lines of the placement announcement, there was only $5m cash in the bank at 30 September. So they burned $7m in Q1FY23, which would leave the next quarterly (due end of this month) showing less than 1 quarter of funding left. That would raise red flags of Talga as a going concern, so would ACC's DD have allowed them to sign a binding offtake with that info? My assumption is no.

Given this cash situation it's no surprise it's been done now. Were expectations that this raise could have been done at a higher SP following the initial non-binding offtake announcement? Probably. But here we are.

Completely agree. Just look at the Audit Report in the 30 June Statutory Accounts

Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial statements, which indicates that the Group had cash and cash equivalents as at 30 June 2022 of $13 million. The cash out flows from operating and investing activities for the year amounted to $38,955,326. Further funding in the form of debt and/or equity raisings will be required to progress the Group’s activities. These events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

No chance of ACC signing up with that in the accounts

 

[Slymeat]

I’m disappointed in the fact that MT vehemently denied needing cash and lied that a CR was not needed. I even stood up for him in discussing the interview—I stated it seemed like the interviewer was hounding him over revenue and cash. He obviously knew the truth was different to what MT was saying.

End result of the $1.10 CR price is those who bought yesterday at $1.325 would now be bitterly dissappointed with their immediate 20c per share losses.

I think MT could have answered in a better way than outright lying. This CR must have been a done and dusted deal when he lied in that interview.

I do believe the reason for the CR is sound and the money will get put to good cause. I just don‘t like anyone lying!

I held MT in high esteem. A lot of that shine has now been lost, and probably permanently.

 

[ACinEur]

Agreed with most of the comments above, slightly less ‘shine’ on MT… Having said that interesting to see UBS AG (Private Bank) in the top 5 holders… this is a step in the right direction and raising profile with HNW investors… got to be a good thing. Having reviewed the slide pack in detail it seems to me it all hangs on the environmental court approvals Q1 next year. So time to top up on the lows, cap raising and we get the approvals…I’ve got a couple of holdings in a very similar spot so time to turn down the (market) noise and get on with life. All will be good
Happy W/end Al

 

[WheresTheMonkey]

I don't want to harp on it but MT is severely constrained in what he can say.

This is what was said in the Kohler interview
***********************************************************************************************************************
AK: Right, so you’ll probably need to raise some more money soon, won’t you?

MT: We’re always reviewing our capital needs, Alan.

AK: Right, very good, I’m sure you are. Can I ask will you be raising more money soon?

MT: I couldn’t answer that either. I must say obviously the markets are extremely choppy right now, we’ve got a lot of opportunities with a lot of different groups, certainly the share price has come off from some recent highs but it’s also holding up pretty well, I think, compared to peers. We’re heading into project financing stage where we’ve got a number of investment banks and state institutions visiting the site looking at the project finance. At some stage we’ll be transitioning from standard sort of equity or company equity facing strategies to more project finance strategies but along that pathway there’s always things you have to respond to depending on how the timing is going and the outside world. That’s about all I can say right now.
**************************************************************************************************************************

And there it is right there......

we’ll be transitioning from standard sort of equity or company equity facing strategies.............but along that pathway there’s always things you have to respond to

And that is Code for Equity Raises are still possible and could happen at anytime.

Actually it's not really Code. The text and sentiment is quite clear in fact.

MT is very much a prisoner of the ASX Disclosure Requirements. He must report to the ASX first and foremost not to us via an interview

Continuous Disclosure
In accordance with the Corporations Act and ASX Listing Rules, listed companies must disclose any information not generally available and that a reasonable person would expect to have a material effect on the price or value of the company’s securities if that information was generally available.

This may include material changes to the business, a material acquisition or disposal, details of a material agreement, under or over subscriptions to an issue of securities, or a takeover bid.

The continuous disclosure obligations are a key regulatory requirement for listed companies, and the directors are responsible for making timely disclosures to support informed trading. Relevant information should be assessed immediately as to whether it ought to be disclosed.

If there is any doubt, the company should consider whether it would be appropriate to enter into a trading halt until the matter can be determined and any required disclosures made.

@Semmel or @ cosors could either of you good lads just post this over at Hot Crappies plus the post
on the qualified Audit Report.

That’s the cruncher tackle

Claim it as your own

Just to shut them up

I’m banned there now

They are still whining over at HC and it annoys me because they should get over it and add good content rather than whinge

If not Semmel or cosors anyone else can post it

Thankyou

 

[Semmel]

Yes its not possible fr a CEO to say in an interview that they will need another CR to keep the lights on before they actually rise the capital on the open market. Asking this question is useless.

On another note. I am wondering why they sell the new stock for 1.1AUD. That is awfully low. I mean, we are not at the same situation as last CR, thats for sure, but it also shows that Talga believes they have a weak hand. They could have sold for 1.2 or even 1.25AUD. Do they believe that the market wouldnt give them a small discount like that? Anyone with experience how this works usually?

 

[WheresTheMonkey]

Yes its not possible fr a CEO to say in an interview that they will need another CR to keep the lights on before they actually rise the capital on the open market. Asking this question is useless.

On another note. I am wondering why they sell the new stock for 1.1AUD. That is awfully low. I mean, we are not at the same situation as last CR, thats for sure, but it also shows that Talga believes they have a weak hand. They could have sold for 1.2 or even 1.25AUD. Do they believe that the market wouldnt give them a small discount like that? Anyone with experience how this works usually?

The price and number of shares to be issued are decided at around 7am before ASX opens

I read something about it somewhere

 

[cosors]

I don't want to harp on it but MT is severely constrained in what he can say.

This is what was said in the Kohler interview
***********************************************************************************************************************
AK: Right, so you’ll probably need to raise some more money soon, won’t you?

MT: We’re always reviewing our capital needs, Alan.

AK: Right, very good, I’m sure you are. Can I ask will you be raising more money soon?

MT: I couldn’t answer that either. I must say obviously the markets are extremely choppy right now, we’ve got a lot of opportunities with a lot of different groups, certainly the share price has come off from some recent highs but it’s also holding up pretty well, I think, compared to peers. We’re heading into project financing stage where we’ve got a number of investment banks and state institutions visiting the site looking at the project finance. At some stage we’ll be transitioning from standard sort of equity or company equity facing strategies to more project finance strategies but along that pathway there’s always things you have to respond to depending on how the timing is going and the outside world. That’s about all I can say right now.
**************************************************************************************************************************

And there it is right there......

we’ll be transitioning from standard sort of equity or company equity facing strategies.............but along that pathway there’s always things you have to respond to

And that is Code for Equity Raises are still possible and could happen at anytime.

Actually it's not really Code. The text and sentiment is quite clear in fact.

MT is very much a prisoner of the ASX Disclosure Requirements. He must report to the ASX first and foremost not to us via an interview

Continuous Disclosure
In accordance with the Corporations Act and ASX Listing Rules, listed companies must disclose any information not generally available and that a reasonable person would expect to have a material effect on the price or value of the company’s securities if that information was generally available.

This may include material changes to the business, a material acquisition or disposal, details of a material agreement, under or over subscriptions to an issue of securities, or a takeover bid.

The continuous disclosure obligations are a key regulatory requirement for listed companies, and the directors are responsible for making timely disclosures to support informed trading. Relevant information should be assessed immediately as to whether it ought to be disclosed.

If there is any doubt, the company should consider whether it would be appropriate to enter into a trading halt until the matter can be determined and any required disclosures made.

@Semmel or @ cosors could either of you good lads just post this over at Hot Crappies plus the post
on the qualified Audit Report.

That’s the cruncher tackle

Claim it as your own

Just to shut them up

I’m banned there now

They are still whining over at HC and it annoys me because they should get over it and add good content rather than whinge

If not Semmel or cosors anyone else can post it

Thankyou

I can't do it, I've kicked myself out of HC.
And still briefly my summary: I do not find all this dramatic, on the contrary. It is now done and without burdening the balance sheet with debts in view of all the negotiations in the background. You have already explained the low issue price to us, thank you for that! And away again
___
And we now have a new major shareholder. I still don't know what to make of GS.
...and that's exactly why companies go public to get our money for investments. Those who are crying now should not invest in the stock market. Money does not fall from the sky.

 

[Semmel]

@Semmel or @ cosors could either of you good lads just post this over at Hot Crappies plus the post
on the qualified Audit Report.

That’s the cruncher tackle

Claim it as your own

Just to shut them up

I’m banned there now

They are still whining over at HC and it annoys me because they should get over it and add good content rather than whinge

If not Semmel or cosors anyone else can post it

Thankyou

Naa... I could post there but to what end? Tig would quote me 7 times in a row and each time with a higher pitched shrieking voice complaining about my dictatorship here or how russia is conquering the world or some shit. I dont care about HC any more. I read HC in case there is some nugget of good information or opinion (like HG64 voiced the other day) but other than that, meh!

 

[Beach]

The price and number of shares to be issued are decided at around 7am before ASX opens

I read something about it somewhere

Hi all, hope you doing well. It a shame MT could not get a binding agreement signed before the capital raise. Guess the new benchmark price is $1.10. So when we have a proper red day on the ASX we should be able to topup at 90c. Just have to wait. Good to see they succeeded to raise at $1.10. That's a good sign, people still believe in the project. Still at the mercy of the Swedish government, hopefully we will not need another CR before permitting gets approved.