Pippydog
Thank you for a comprehensive summary of the AGM, which I attended. I will refrain from going over the same ground you have covered so well and limit myself to some comments and reflections.
Before I launch into that aspect as promised I enquired on how deep the deposits were to be tested. So far all four Vitangi deposits: Nunasvaara South and North, Niska South and North have been drilled to 150m or so with 125m the cut off between Inferred and indicated resources respectively. The current campaign with the assay results from the first 6 holes with another 56 to go have been remarkable. The aim is to update the reserves (commercial economic) from indicated resources and indicated resources for a clearer view of what TLG have. Mark Thompson (MT) was clearly disappointed that he did not have more assays to share. He expects the results from the remaining campaign to be known and released to the ASX throughout December 2021 well into January 2022, which will drive a revised JORC announcement. TLG are proposing to chase the deposit down to 250 meters or so as the deposit is open along strike and down dip. The video at the AGM shows how deep this might well extend, although at this point it may be unnecessary to go too far down as 1m across the 50 m width of the length at Nunasvaara South is enough to supply material for one year! (see point 9).
The thing that struck me most at this year's AGM was the concentrated focus on the technology side, it is this aspect that lead the presentation. MT discussed how specifically each product was engineered: for instance fines might end up in coatings and graphene in the highest margin product such as Talnode-Si, but the specific applications were too numerous too mention and confidential at this juncture. The next thing that I picked was a change in the language away from graphite per se or even graphene, which was replaced with references to graphitic which encompassed both. The attitude is to switch away from chasing everything as was the case a few years ago, cement being a case in point as it offers insufficient margin when compared to the other alternatives in TLG's portfolio. This shows how far behind the curve TLG's wannabe competitors are as they are only just exploring those avenues. I would compare TLG to TESLA here, who are clearly a couple of generations of EV ahead of their nearest competitor.
This brings me to some of the names being dropped, TESLA of course, not just through the model on show or a 4680 cut away battery, but also Volvo for the first time and NIO. NIO is out of China and the revelation of an office in Hong Kong in one of the slides is the clearest indication yet that things are moving beyond Europe alone and very quickly. This is reaffirmed by the reorganisation of the Cambridge site. Subsequent announcements involving the EU demonstrate to me that the EU commission is starting to hit some panic buttons for fear of missing out of a world class asset right on the doorstep within their sphere of control. MT is not only talking to senior officials in Brussels, but also EU Commissioners who are about as senior as it gets on the administration side as well as ministers on the political side.
MT stressed time and again during questions from the floor for the necessity to focus on what was economically viable, for instance theoretically speaking Lithium ion batteries are possible based on a chemistry of Lithium Air, except that to get the density necessary out of a gas, by definition extremely low density compared to a solid for of an element, makes for an impossible product with no relevance in the real world outside academia. Other questions revolved around graphite being the element that can be replaced in a battery, specifically with silicon. TLG have achieved 30% to 50% content with exponential incremental downside beyond 30% as the battery consumes itself, particularly the lithium. He went on to explain that lithium is inherently unstable and flammable so shipping large quantities anywhere is a virtual practical impossibility. In fact if any material component is to be replaced other than percentage of the graphite for a silicon combination with graphitic material it is the lithium in the cathode with a graphitic engineered material, and that would be with a graphitic material that TLG is already working along with a solid state solution. MT stated that TLG always aims to be several steps ahead so that it is able to deliver a product in scale at the appropriate time.
There was not much discussion on the JV or about Northvolt. It is my impression that the ball is firmly in the court of those particular potential partners. It is a given that Northvolt would manufacture batteries for Volvo, but they would be on a completely different production line than the one supplying VW, and even then each battery would be configured to the client's specifications depending on whether it was a van or a sports car. Permits are looking like Q2 2022 to coincide with the European summer and post the elections in Sweden in May 2022. TLG have access to enough material to take their EVA production plant to the end of 2022, by which time those aspects might be resolved in the positive. Naturally, nothing is certain, but the consequences for the Swedish economy missing out on a generational opportunity on the scale of what TLG hold does not bear thinking about.
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