Good questions. I think the best way to look at this announcement is through examples. What better example for Talga than Vulcan Energy signing a binding agreement with Stellantis from November 2021:
Vulcan Energy signs lithium supply agreement with Stellantis"Vulcan Energy Resources Ltd. (Vulcan, the Company, ASX: VUL) and Stellantis N.V. (NYSE / MTA / Euronext Paris: STLA) have signed a binding lithium hydroxide off take agreement (“Agreement”) to supply, starting 2026, a minimum of 81,000 tonnes and a maximum of 99,000 tonnes of battery grade lithium hydroxide over the duration of the initial five-year agreement...
The battery grade lithium hydroxide will be used by the three Stellantis battery production facilities in Europe – in Termoli, Italy, and the Automotive Cells Company (ACC) joint venture plants in Kaiserslautern,Germany, and Douvrin, France. The three plants combined will produce at least 120 gigawatt hours of cell capacity by 2030.
Conditions precedent include successful start of commercial operation and full product qualification. Pricing will be based on market prices on a take-or-pay basis."
So, as we can see it's the same companies that Talga will be working with and the same time-frame of 5 years. Talga could indeed have a binding agreement signed but there would no doubt be a condition for permitting approval (similar to Vulcan's conditions above).
Is it worth getting excited over? I certainly think so. It carries far more punch than other MOU announcements that Talga has had. This isn't just a broad statement of interest as it contains far more important details, such as quantities, time frames and ramping of production as well as a Novemeber 30th deadline that's around the corner. Also take into consideration what
@sithas22 has said above regarding lenders being reassured with purchase agreements before committing. Keep in mind the representatives that we had on site less than 2 weeks ago.
Further, I believe chances of this not becoming binding are slim. ACC have clearly had this plan to secure their supply for a while (look no further than Vulcan above), and Talnode-C is clearly apart of that plan. I think if this were to fall through, it would throw a massive spanner in the works for ACC.
As for the market's response, I think the current fear and uncertainty in the market has many sitting on their hands. Cliché hotcopper answer, but we are in rough waters at the moment. I saw it as an opportunity and have taken full advantage.
Anyway, all my opinion DYOR etc.
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