TLG Discussion 2022

[curiousmagpie]

I've asked you before as to what fundamentals have changed since you invested but you didn't answer. I can only see the fundamentals as having improved, along with a lot of de-risking. So again the issue seems to be your intolerance of a shite share price, and lack of public proof of progress. I get it as most get caught up in this cycle, but you're invested in a business, not a share price.

I'm happy to race you over 5 years. You close out your Talga position and pick the next winner and we'll race!

The fundamentals that have changed negatively since I made a substantial investment (bought my first shares more than 4 years ago but not a big position, most came in last 4 years) include:

Outside company control to different extents:
First production 2024. Now 2026 (maybe)
Niska expansion production 2026. Now 2030 (maybe)
Anode price has collapsed. Benchmark were forecasting $12,000+/t for Talga, but the reality now that is unachievable in this market. $8,000/t would be lucky.

Within company control to different extents
ACC offtake to become binding shortly! That was nearly 2 years ago. Does it still have a pulse?
Verkor offtake... 18 months and counting
Graphene! The graphene hype was what made me first pay attention to Talga. Has there been any progress at all? The ship coating plans sunk to the bottom of the baltic. Any other progress?
Tal-Si development could have been progressed without permits. All we have are promises. Nothing has been closed.
Capital management strategy - ramping up staff and other overhead costs with expectation of revenue sooner than it will come. Seems like a mistake now. Interesting to see when they start cutting jobs.



The company has no doubt made substantial progress in 4 years, but ultimately has nothing to show for it. The collapse of the share price means funding is hard, despite EIB the de-risking. Permitting has been de-risked with granting of the permit but the appeals and delays have caused even more damage. And the longer the talk goes on of commercial progress without deals being done the riskier this gets imo. Easy to see in hindsight but this has been a slow moving car crash that I should have bailed from sooner.

As for picking a bigger winner than Talga over a 5 year time frame - I invested what I took out of Talga into White Haven Coal at $8. Willing to bet over 5 years total returns will be higher than Talga.

 

[DAH]

The fundamentals that have changed negatively since I made a substantial investment (bought my first shares more than 4 years ago but not a big position, most came in last 4 years) include:

Outside company control to different extents:
First production 2024. Now 2026 (maybe)
Niska expansion production 2026. Now 2030 (maybe)
Anode price has collapsed. Benchmark were forecasting $12,000+/t for Talga, but the reality now that is unachievable in this market. $8,000/t would be lucky.

Within company control to different extents
ACC offtake to become binding shortly! That was nearly 2 years ago. Does it still have a pulse?
Verkor offtake... 18 months and counting
Graphene! The graphene hype was what made me first pay attention to Talga. Has there been any progress at all? The ship coating plans sunk to the bottom of the baltic. Any other progress?
Tal-Si development could have been progressed without permits. All we have are promises. Nothing has been closed.
Capital management strategy - ramping up staff and other overhead costs with expectation of revenue sooner than it will come. Seems like a mistake now. Interesting to see when they start cutting jobs.



The company has no doubt made substantial progress in 4 years, but ultimately has nothing to show for it. The collapse of the share price means funding is hard, despite EIB the de-risking. Permitting has been de-risked with granting of the permit but the appeals and delays have caused even more damage. And the longer the talk goes on of commercial progress without deals being done the riskier this gets imo. Easy to see in hindsight but this has been a slow moving car crash that I should have bailed from sooner.

As for picking a bigger winner than Talga over a 5 year time frame - I invested what I took out of Talga into White Haven Coal at $8. Willing to bet over 5 years total returns will be higher than Talga.

Curious, damn too much here for me to address on my painful mobile phone.

IMO you very much seem to be looking at all the wrong things and when you do, you focus on the negative.

You're right, timelines have been pushed, anode price is down, but that's short-sighted thinking. I see it different, where TLG will front load stage 1 when it kicks off (as they appear to be to catch up). Most demand is still years off and we'll chase such permits etc under the CRMA. Pricing will change and an ex-China price will be established.

TBH - I reckon these delays will ironically see TLG in a much stronger position given they'll now have access to grants as well as strategic partners somewhat desperate for our product - no other small player is obtaining capital in the manner TLG appears to be.

I agree the ACC deal should've been explained but my guess is its confidential. They are 3 parties with varying needs, but I'm as confident as I can be they'll be a cornerstone strategic partner. The EIB don't sign off without clarity on likely offtakes. ACC and Verkor are still named, check the quarterlies. Graphene is being sold (non material for now) and I can only assume larger deal/s await the SC.

Its simple: Talga are for now, Europe's only near term answer to addressing their supply of natural graphite anode as well as recycling the stuff. The graphite resource by law needs to be extracted. Talga are very capable. They have products every auto OEM and cell maker will want (without tapping China). This is where the focus should be.

And the only way Whitehaven outperforms Talga is if Talga are still waiting on appeals. You're picking a ~$7B company to outperform a $200M company that has its deck stacked. I'll take that bet!

I'm off to have a beer with @brewm0re

 

[WheresTheMonkey]

ACC wasn't announced as being subject to permits. Are you saying the company was being untruthful here?


View attachment 65982

Of course it's going to be subject to permits given qualification was based on Vittangi graphite. Sometimes the bleeding obvious is just not stated .

No they are being truthful based on what was known at the time. Remember the original court decision awarding permits came in April 2023 all but five months after the above deadline.

No lawyer would recommend you go ahead with a binding agreement by November 2022. The grind of the Swedish Courts and the opposition of the Nimbys would have been apparent by then.

 

[Semmel]

The fundamentals that have changed negatively since I made a substantial investment (bought my first shares more than 4 years ago but not a big position, most came in last 4 years) include:

Outside company control to different extents:
First production 2024. Now 2026 (maybe)
Niska expansion production 2026. Now 2030 (maybe)
Anode price has collapsed. Benchmark were forecasting $12,000+/t for Talga, but the reality now that is unachievable in this market. $8,000/t would be lucky.

Within company control to different extents
ACC offtake to become binding shortly! That was nearly 2 years ago. Does it still have a pulse?
Verkor offtake... 18 months and counting
Graphene! The graphene hype was what made me first pay attention to Talga. Has there been any progress at all? The ship coating plans sunk to the bottom of the baltic. Any other progress?
Tal-Si development could have been progressed without permits. All we have are promises. Nothing has been closed.
Capital management strategy - ramping up staff and other overhead costs with expectation of revenue sooner than it will come. Seems like a mistake now. Interesting to see when they start cutting jobs.



The company has no doubt made substantial progress in 4 years, but ultimately has nothing to show for it. The collapse of the share price means funding is hard, despite EIB the de-risking. Permitting has been de-risked with granting of the permit but the appeals and delays have caused even more damage. And the longer the talk goes on of commercial progress without deals being done the riskier this gets imo. Easy to see in hindsight but this has been a slow moving car crash that I should have bailed from sooner.

As for picking a bigger winner than Talga over a 5 year time frame - I invested what I took out of Talga into White Haven Coal at $8. Willing to bet over 5 years total returns will be higher than Talga.

First up magpie, thx for giving your views in the forum. I dont agree with your conclusions, but I very much respect the fact that you give us friendly opposition. That is (for the sake of this forum) valuable.

If you are looking at Talga purely from an investment perspective and not look at the company, of course, it is a disappointment and it doesnt matter why it is like this. Even the 5 year horizon that DAH mentions is not sufficient, because you could have reasonably have the same time horizon in 2019 and there is nothing to show for it. Everyone, and I mean EVERYONE has underestimated the court rigmarole. I love Talga being in sweden and being subject to much higher standards of mining than chinese manufacturers. That is because I care about the environment. And Talga being held to higher standards is GOOD. However, Talga has MET the high standards and is STILL punished. Just because its possible to do so in the Swedish court system, not because its actually good or justified (in my opinion). Talga has kept to the rules and that is all you can ask for it. If the rules are wrong, its not Talgas fault and the NIMBYs are wrong here. They should take it up with politicians that make the rules and change them if its not enough. And if the rules state "no mining in northern sweden, not for any reason, fullstop" than thats it and we can all go home and we wouldnt have invested in Talga in the first place. But this preventing the application of the rules because you disagree with them is BS and hurts Talga more than it should. I, and no one I know, was able to foresee this long of a process. Sweden should pay damages to Talga for this. Not that this would help Talga now, but its rediculous the way it goes at moment. In terms of investment, it was my and everyone elses lack of imagination that this takes so long, including Talga.

* The nonbinding offtake agreement with ACC is symptom of that. Everyone thought the pie can be distributed end of 2022. It is still in the oven.
* Graphene.. well, ets hope there is some progress at some point. Talga (in my opinion) correctly assessed that battery anodes are a better future for the company than graphene. It was too early to go all-in graphene, which is became apparent in hind sight, Talga did a good job recognizing that.
* Talndode-Si: Talga, again, underestimated the time it take the courts to make a decision. Or even look at the paperwork. As did everyone else. I say this for some time now, but I think it was a strategic mistake to qoalify Talnode-Si using Vittanghi graphite. It should have been synthetic, then we would already be building factories now. I try to push Talga in that direction, as I hope someone will read the forum and float the idea by MT. At least, make Talga internally think about it. Synthetic doesnt have to come from petrolium feedstock. But again, it takes some development to make it happen and build a supply chain. Its tough work, but I hope Talga considers it as Sweden has become anti-cooperation and anti-green movement. Maybe CRMA can save the situation but I wouldnt bet the company on it.

All in all, its a lot tougher investment than I anticipated and its a lot harder to get going with a green product than it should be in Europe. Politics in Sweden has become anti-climate. They dont care for the climate at all, no matter what they say, as what they do is prevent projects that protect the climate.. shot down by green activists no less. If I was running Shell, I would do the same: fund green activists and make them focus on social "problems" and make them shoot at green development projects. That is of course tin-foil hat territory, but big Oil couldnt have made a better strategic move but to direct green groups to fight environmental friendly projects such as wind parks, power lines to them, and Talga among many others.

 

[JNRB]

What is the difference between a binding and non-binding agreement?
If you want to think about money, think about who's carrying the risk.

BINDING:
TALGA - gets security further in advance that a portion of product will be sold, possibly even with pre-payment. LESS RISK.
THEM - what does the other party get in return for this commitment? Security of supply, sure, but if they're signing for a project that's not yet producing then they take on a portion of the risk, and so also expect a big fat discount.

NON-BINDING:
TALGA - Easier for other party to drop out/ delay. Talga carries more risk.
THEM - They have to manage their own supply chain risk differently, but they take on none of the risk for a deposit producing. They buy the product when it's ready (or at least once everything's locked-in good to go). LESS RISK = PAY MORE.

So

non-binding? fking great. show's companies have tested our stuff and are ready to use it in their production lines. That's all I need for now.
Then we haggling on price, and I'm 100% in favour of Talga not giving away discounts just to get a signature a little earlier on. The longer time goes on, the more risk we remove from the project (permitting, grants), the more the pricing equation moves in our favour.

non-binding is fine with me.

 

[Diogenese]

First up magpie, thx for giving your views in the forum. I dont agree with your conclusions, but I very much respect the fact that you give us friendly opposition. That is (for the sake of this forum) valuable.

If you are looking at Talga purely from an investment perspective and not look at the company, of course, it is a disappointment and it doesnt matter why it is like this. Even the 5 year horizon that DAH mentions is not sufficient, because you could have reasonably have the same time horizon in 2019 and there is nothing to show for it. Everyone, and I mean EVERYONE has underestimated the court rigmarole. I love Talga being in sweden and being subject to much higher standards of mining than chinese manufacturers. That is because I care about the environment. And Talga being held to higher standards is GOOD. However, Talga has MET the high standards and is STILL punished. Just because its possible to do so in the Swedish court system, not because its actually good or justified (in my opinion). Talga has kept to the rules and that is all you can ask for it. If the rules are wrong, its not Talgas fault and the NIMBYs are wrong here. They should take it up with politicians that make the rules and change them if its not enough. And if the rules state "no mining in northern sweden, not for any reason, fullstop" than thats it and we can all go home and we wouldnt have invested in Talga in the first place. But this preventing the application of the rules because you disagree with them is BS and hurts Talga more than it should. I, and no one I know, was able to foresee this long of a process. Sweden should pay damages to Talga for this. Not that this would help Talga now, but its rediculous the way it goes at moment. In terms of investment, it was my and everyone elses lack of imagination that this takes so long, including Talga.

* The nonbinding offtake agreement with ACC is symptom of that. Everyone thought the pie can be distributed end of 2022. It is still in the oven.
* Graphene.. well, ets hope there is some progress at some point. Talga (in my opinion) correctly assessed that battery anodes are a better future for the company than graphene. It was too early to go all-in graphene, which is became apparent in hind sight, Talga did a good job recognizing that.
* Talndode-Si: Talga, again, underestimated the time it take the courts to make a decision. Or even look at the paperwork. As did everyone else. I say this for some time now, but I think it was a strategic mistake to qoalify Talnode-Si using Vittanghi graphite. It should have been synthetic, then we would already be building factories now. I try to push Talga in that direction, as I hope someone will read the forum and float the idea by MT. At least, make Talga internally think about it. Synthetic doesnt have to come from petrolium feedstock. But again, it takes some development to make it happen and build a supply chain. Its tough work, but I hope Talga considers it as Sweden has become anti-cooperation and anti-green movement. Maybe CRMA can save the situation but I wouldnt bet the company on it.

All in all, its a lot tougher investment than I anticipated and its a lot harder to get going with a green product than it should be in Europe. Politics in Sweden has become anti-climate. They dont care for the climate at all, no matter what they say, as what they do is prevent projects that protect the climate.. shot down by green activists no less. If I was running Shell, I would do the same: fund green activists and make them focus on social "problems" and make them shoot at green development projects. That is of course tin-foil hat territory, but big Oil couldnt have made a better strategic move but to direct green groups to fight environmental friendly projects such as wind parks, power lines to them, and Talga among many others.

The problem as I understand it is that some local government functionaries are refusing to do their job and impeding Talga's progress because they want money to which, leaving aside the ethical question, they have no legislated entitlement.

Before the rule of law, this was the system implemented by robber barons and later by minor government officials throughout the ages, and is still practiced in some countries.

Talga, whose major goals include the reduction of global CO2 emissions, is held hostage and is suffering economic loss due to their inaction, and the courts have bent over backwards to accommodate them.

Why don't they go and spray paint on the Mona Lisa like normal protestors?

 

[Semmel]

The problem as I understand it is that some local government functionaries are refusing to do their job and impeding Talga's progress because they want money to which, leaving aside the ethical question, they have no legislated entitlement.

Before the rule of law, this was the system implemented by robber barons and later by minor government officials throughout the ages, and is still practiced in some countries.

Talga, whose major goals include the reduction of global CO2 emissions, is held hostage and is suffering economic loss due to their inaction, and the courts have bent over backwards to accommodate them.

Why don't they go and spray paint on the Mona Lisa link normal protestors?

Yes, besides the SC appeal slumber, this is a real problem too. Talga became the kicking ball in this debate because it is small and can't retaliate. Imagine they would have done the same thing with the iron ore mine. Politicians would not dare to try that. But with talga? They can play their robbery game. I agree, with you here.

 

[JNRB]

Yes, besides the SC appeal slumber, this is a real problem too. Talga became the kicking ball in this debate because it is small and can't retaliate. Imagine they would have done the same thing with the iron ore mine. Politicians would not dare to try that. But with talga? They can play their robbery game. I agree, with you here.

Yep 100% I've been thinking the same thing. Small, and not a state-owned company, NIMBY's and greedy councils decided to use this to make a statement.


Also, a mining tax FOR THE COUNTRY is one thing, but I still am not convinced as to why some village should get an extra cut purely by some level of proximity. Yes if there's going to be negative effects on the community, something should be given back to offset that. But to claim a cut just because you're nearby - that's just rent-seeking. You could just as easily claim the same thing in reverse and say that because they are so far away from where most of the other revenue is generated in the country that they are less entitled to the tax generated from activities there. Makes no sense.

 

[cosors]

Yep 100% I've been thinking the same thing. Small, and not a state-owned company, NIMBY's and greedy councils decided to use this to make a statement.


Also, a mining tax FOR THE COUNTRY is one thing, but I still am not convinced as to why some village should get an extra cut purely by some level of proximity. Yes if there's going to be negative effects on the community, something should be given back to offset that. But to claim a cut just because you're nearby - that's just rent-seeking. You could just as easily claim the same thing in reverse and say that because they are so far away from where most of the other revenue is generated in the country that they are less entitled to the tax generated from activities there. Makes no sense.

That's a good point!
Here in Germany we have equalisation payments between the regions. The regions that take in a lot also pays a lot into the pot.
But I don't want to deal with the Swedish financial system.
Sweden goes green and puts the political bureaucratic brakes on wherever it can. Talga is just one example of many.
Many ecologists from Germany regularly look to Sweden. I give those around me a little insight into the reality.
For example, when people here complain about Bavaria, which also pays the most for the welfare state but has few wind turbines because they are better located in the North Sea, I briefly point out that Sweden has prevented 78% of all wind turbines through legal action and has not only not shut down its nuclear power plants, but has just extended their operating life. If that's still not enough, I'll point out that Sweden has cancelled the power line to Germany because they don't have enough electricity themselves.
Whatever. Their argument is of course another.

________
The wrong game is being played there, and the cheating is willingly allowed to continue.
Oh, we actually forgot the signature?!
Oh, our minds have been made up for years in this matter but we need more time!
Oh, our opinion has been set for two years and now we get three months to formulate our opinion?! Maybe we can ask for more time and then forget the signature. That always works with our courts.
And the court says to itself: No problem dear Swedes, do what you want, everyone in this world is equal. And some are even more equal than equal. ...if
you know what I mean. )