Talga Valuation v Lithium, page-36

Yep.

Last year it was "36 active commercial engagements covering majority of planned European Li-ion battery manufacturers and 6 major global automotive OEMs."

This year it is "62 active programs across 48 customer engagements Talga is now working directly with 11 automotive companies and the majority of announced battery manufacturers in Europe under advancing qualification and procurement processes."

It takes about 18 months to qualify the anode, and I'd say a lot of these potential customers got on board during the first half of last year. So we should have a pretty good idea who wants to buy in the next 6-12 months (maybe less).

Direct comparisons to lithium are not apt, from my understanding. But I feel like I am going mad watching some of the lithium company valuations. Mark Thompson says graphitic anodes aren't like a metal where you can purify it to a certain degree, and it's good to go. He describes anodes as a "touchy-feely thing" and that no two graphite deposits are the same (The Limiting Factor: Mark Thompson - Talga). So arguably, it may be harder to produce graphitic anodes than lithium as there is more back-and-forth required between buyer and seller to ensure a high-quality product.

Furthermore, 100% of spherical graphite comes from China, and most natural graphite comes from China. But for lithium, 60% is processed in China, but most lithium comes from Australia or South America. If Europe is going to be strict on supply-chain security & ESG, and even if they aren't, China still needs to serve its growing EV market. So then, where will the European factories source their graphite for their planned 500 GWh of production in 2030? Note that this requires about 600k tonnes of anode per annum.

My point is that graphite supply may be in an even more delicate position than lithium. Not only do these supply issues seem so obvious to me. But Talga has so much stacked in their favour to capitalise on this. Although conversely, Talga's share price doesn't match what I am seeing. So I can't tell if I have beaten the market to the punch here. Or I have misunderstood something.

But every time I try and scrutinise the company, I find another set of pros. For example, when I compared TLG's permits to ASX lithium darlings PLL and VUL. I found out that both of those two aren't even in the same league as Talga. PLL has been made look like absolute amateurs with their non-existent community consultations and friction with local government. When I tried to find out if graphite would stop being used in anodes within the next 5-10 years, it turned out that QS are not even close to being done, and Toyota use graphite in their solid-state batteries. Also, Talga is progressing well with its future-proofing technologies like Talnode-Si and graphene.

My conviction remains at an all-time high. I think the company is being grossly undervalued and it makes no sense. I thought I was pretty happy with my position in Talga, but I think I need to add to it and double down. Hopefully, my conviction and aggression will be rewarded.