TLG Ann: Talga Presentation - Macquarie Group Critical Minerals Forum - 28th Jun 2022, 12:52pm

[annb0t]

TLG Ann: Talga Presentation - Macquarie Group Critical Minerals Forum
Price Sensitive: N
Date: 28th Jun 2022, 12:52pm

>>> Read announcement: Google: TLG Market Announcements

 

[WheresTheMonkey]

Project Financing not happening until permits sorted which puts it into 2023. No real surprise there but will Mitsui stick around ?

 

[Semmel]

Finished the slides just now and yeah,the financing in 2023 is the only thing I saw which we didn't know before. It's early in the morning so I might have missed another nugget, but looks like that's it. Good to see they are public though. That was my criticism just a few days ago and now there is at least some movement, which makes me happy

I don't really understand how they can target production start in 2024 with financing available in 2023. How are they going to order, get delivered and commissioned equipment in ~1.5 years? That sounds borderline impossible to me. If it was Tesla, sure, they have a history to make things like that work. But Talga doesn't. Not sure how they imagine to do that. I must be missing something.

 

[TentCity]

Project Financing not happening until permits sorted which puts it into 2023. No real surprise there but will Mitsui stick around ?

Yeah, this is the second time Talga has spoken about financing options and Mitsui has not been referenced to specifically. They are still listed as a partner in the slide deck, but I’m bracing for the Aug 31 announcement that the MoU won’t be renewed.

I actually don’t think it is a big deal as all the action is in Europe anyway and I’m confident that Talga as plenty of alternative financing options that will lessen the need to give away a stake in the company unnecessarily.

I particularly liked the references on Slide 17 that spoke to ‘Pricing Strategy’:
- “Reference high end synthetic product”
- “Maintain high price exposure to expected increase in graphite anode prices”
-“Current commercial strategy ensures Talga continues to build competitive tension for commercial agreements and is best positioned to optimise any agreement terms secured”

 

[WheresTheMonkey]

Sithas22 just posted this over at HC and since I don't recall him posting here at TSE I'm going to plagiarize it

........Using some back-napkin math, 25K tonnes (total permitted for trial) at 24% Cg and 90% recovery is 5.4K tonnes anode. Assuming a $12K/t sell price, that's $64.8M. Obviously, most of that 25K tonnes is being mined in Q3 and won't show up as sales until Q4. But, the point here is that just the EVA plant has potential to generate plenty of revenue to keep things running.

Frankly, if TLG can keep the EVA plant running at 5.4K tonnes anode in 2023 (after getting permits for the full mine), revenue of $64.8M alone would justify a higher SP without even accounting for the massive growth potential.

My question is ...................Does the EVA plant have that capacity ?

I am thinking it has as I thought it ran at 500 tonnes per month .......................is that right ?

 

[WheresTheMonkey]

On Page 17................has this increased since last announcement when I think it was around 28 ?

Customers by type:

11 Automotive companies

37 Battery manufacturers and associated value chain players

 

[Semmel]

Sithas22 just posted this over at HC and since I don't recall him posting here at TSE I'm going to plagiarize it

........Using some back-napkin math, 25K tonnes (total permitted for trial) at 24% Cg and 90% recovery is 5.4K tonnes anode. Assuming a $12K/t sell price, that's $64.8M. Obviously, most of that 25K tonnes is being mined in Q3 and won't show up as sales until Q4. But, the point here is that just the EVA plant has potential to generate plenty of revenue to keep things running.

Frankly, if TLG can keep the EVA plant running at 5.4K tonnes anode in 2023 (after getting permits for the full mine), revenue of $64.8M alone would justify a higher SP without even accounting for the massive growth potential.

My question is ...................Does the EVA plant have that capacity ?

I am thinking it has as I thought it ran at 500 tonnes per month .......................is that right ?

According to my notes on the Rho Motion podcast, it has a capacity of 1t per month.

Media

Oh yes. Forgive me that is my bad.

thestockexchange.com.au

 

[WheresTheMonkey]

According to my notes on the Rho Motion podcast, it has a capacity of 1t per month.

Media

Oh yes. Forgive me that is my bad.

thestockexchange.com.au

OK so nowhere near 500 tonne per month

 

[Semmel]

On Page 17................has this increased since last announcement when I think it was around 28 ?

Customers by type:

11 Automotive companies

37 Battery manufacturers and associated value chain players

I remember similar numbers from last announcements.

 

[Affenhorst]

According to my notes on the Rho Motion podcast, it has a capacity of 1t per month.

Media

Oh yes. Forgive me that is my bad.

thestockexchange.com.au

That would be pathetically little and wouldn't jive at all with the amount they're mining. Sure it's not per day?

 

[Semmel]

That would be pathetically little and wouldn't jive at all with the amount they're mining. Sure it's not per day?

Unfortunately, the Rho Motion seminar is not available any more and I posted my notes at the time. No one contested that aspect so I guess that is what was said. If there is any conflicting information, I am happy to change the statement.

12 tpa seems like enough to qualify the product, dont you think? The EVA plant was never meant to produce material for industrial applications. Its a proof of concept of the industrial process. I dont find that particularly unbelievable. But I am not experienced in mining either and I have no idea what is typical for such a stage of a project.

 

[Monkeymandan]

Unfortunately, the Rho Motion seminar is not available any more and I posted my notes at the time. No one contested that aspect so I guess that is what was said. If there is any conflicting information, I am happy to change the statement.

12 tpa seems like enough to qualify the product, dont you think? The EVA plant was never meant to produce material for industrial applications. Its a proof of concept of the industrial process. I dont find that particularly unbelievable. But I am not experienced in mining either and I have no idea what is typical for such a stage of a project.

Yep - was definitely 1 tonne per month quoted in the presentation. I think people mis-understand the point of the EVA. It’s purely to demonstrate the specified product can be produced consistently over a period of time. So tens or hundreds of kilos to a customer on a reoccurring basis, rather than one off samples that a pilot plant would produce. The revenue from this will be negligible, but it opens an otherwise locked door to vast revenue once qualified.

 

[WheresTheMonkey]

200 tonnes per annum at Page 29 in the December 2020 Investor Presentation. It notes that customers require between 10 and 500kg to carry out qualification.

And this further note ............."Battery anode material for use by auto manufacturers requires the testing of increasing volumes prior to entering into binding off-take agreements"

https://talgagroup.eu-central-1.linodeobjects.com/app/uploads/imports/presentations/cc3f17f9-6d38-4351-b50b-f3b042508973/Investorpresentation.pdf

 

[Semmel]

200 tonnes per annum at Page 29 in the December 2020 Investor Presentation. It notes that customers require between 10 and 500kg to carry out qualification.

And this further note ............."Battery anode material for use by auto manufacturers requires the testing of increasing volumes prior to entering into binding off-take agreements"

https://talgagroup.eu-central-1.linodeobjects.com/app/uploads/imports/presentations/cc3f17f9-6d38-4351-b50b-f3b042508973/Investorpresentation.pdf

Hmm, interesting. So did something change in between December 2020 and April 2022 or do we not understand something?

 

[WheresTheMonkey]

Hmm, interesting. So did something change in between December 2020 and April 2022 or do we not understand something?

It's a big difference so I think someone mis-spoke at the Rho motion seminar especially given the statement about accelerated quantities and the range of amounts required. Otherwise it could take upto a year to get OEMs the samples if we went at such a snail pace of 1 tonne per month.

Then would come the testing phase.

I think 200 tpa sounds more like it

 

[Affenhorst]

It's a big difference so I think someone mis-spoke at the Rho motion seminar especially given the statement about accelerated quantities and the range of amounts required. Otherwise it could take upto a year to get OEMs the samples if we went at such a snail pace of 1 tonne per month.

Then would come the testing phase.

I think 200 tpa sounds more like it

Sounds about right to me. Perhaps the 1 t was just during commissioning/very early ramp or indeed it was meant to say per day.

1 t/month would be like 3 buckets per day. An awful lot of machinery for such tiny output.

 

[WheresTheMonkey]

Sounds about right to me. Perhaps the 1 t was just during commissioning/very early ramp or indeed it was meant to say per day.

1 t/month would be like 3 buckets per day. An awful lot of machinery for such tiny output.

This EVA design must be able to be scaled up big time. I mean $22M to produce 200tpa at the scale we are aiming for in the future would blow our Capex to pieces LOL

 

[Semmel]

It's a big difference so I think someone mis-spoke at the Rho motion seminar especially given the statement about accelerated quantities and the range of amounts required. Otherwise it could take upto a year to get OEMs the samples if we went at such a snail pace of 1 tonne per month.

Then would come the testing phase.

I think 200 tpa sounds more like it

We can only speculate. It's frustrating, i would love to have a recording now to understand the context. I do t think they misspoke, 200 tpa is wildly different than 1 tpm. So the context of the statements must be different or something. I think we will see it in the next quarterly reports in the amount of anode that is sold for qualifications.

 

[cosors]

This EVA design must be able to be scaled up big time. I mean $22M to produce 200tpa at the scale we are aiming for in the future would blow our Capex to pieces LOL

The EVA stays where it is and is not build to be scaled up as far as I know. It will remain in parallel as a research center for the cluster. Unfortunately, it did not work out with the visit of BigGMoney on site, the output would have been my question.
Nevertheless, we are just preparing for the approved mining of 25,000t this year. With the given purity of the ore, the calculation is simple how much material can be used for anodes. Why mine it if you can't process it and just store it?! I think it might be more than we suspect but not nearly as much as mass production.

"31 May 2022
...
Following a successful first phase trial mine in Q4 2021 (ASX:TLG 1 September 2021), the Company will now extract the balance of the permitted 25,000 tonnes of graphite ore from Talga’s Niska South deposit starting early next month.
...
The raw material extracted from the trial mine will provide feed for large scale battery anode sample production, including at Talga’s recently commissioned Electric Vehicle Anode (“EVA”) plant in Luleå, Sweden (ASX:TLG 31 March 2022)."
https://talgagroup.eu-central-1.lin...1094345/20220531TrialMineCommencement_ASX.pdf

 

[WheresTheMonkey]

Hey @cosors you and @Semmel can get down to Stuttgart and ask some questions LOL