According to AFR it's a $30 milion capital raise: "Euroz Hartleys and Morgan Stanley drumming up interest in a $20 million share placement ... offering shares in Talga at $1.10..." "It [Talga] planned to run a $10 million share purchase plan later at the same offer price as the placement." So we have $30 m /$1.10 = 27.3 million new shares added to the existing 304.9 million shares = 8.95% dilution.
Now why raise $30 million at a low share price if permits are in half year reach?
I am positive MT wants to make this the last cash raise before permitting, but permitting still could take a while longer than expected. And until permitting no financing deal to decent conditions is possible, that should be obvious. But the show must go on, the competition is not sleeping, Talga must push on with the project on its own resources even if final permits may be delayed.
In a recent Bloomberg interview published August 28th, Martin Phillips said about the permitting process: "The basic problem we're getting is that there is this unlimited process time. That creates the challenge for us to keep financing our company while we wait for the Swedish authorities to make a decision."
And Mark Thompson said in his interview with youtuber ASX investor in early September on the permitting process: "The only downer is the uncertainty. [...] Back in June the submissions from stakeholders closed, and we have positive submissions as well as the usual negative ones. But importantly we had some key government authorities make statements that were far beyond what we expected in support for the project. [...] But we don't find out for sure until early next year. There will be a decision made which will give that strong direction of which way they are going. It doesn't mean it's the end of that process. There may be some need for some information or some other process that's happening."
In other words: Management is preparing for the possibility of another possible delay in the permitting process. And nobody should say MT didn't tell us. Just take your time and listen to him.
A likely delay after the decison of the Court scheduled for February is a possible appeal to the Land and Environmental Court of Appeals (Mark- och MiljöÖverdomstolen) and after that an appeal to the Supreme Court (Högsta Domstolen).
In the famous case of Botnia Exploration the timeline was: November 2020: Court decision granting the permit May 2021: Court of Appeal's decision - again appealed by a nature conservationist's organization October 2021: Decision by the Supreme Court giving Botnia's permit final legal force.
So we may have up to 10-12 months further protraction in the legal process possibly until Q1-2024. IMO the company is now raising enough cash to keep not only going but to be able to advance the project on its own until 2024.
And what about the Stellantis/Mercedes offtake agreement due to be binding by end of November if these delays are possible?
I think it is possible even without permits. 1. Stellantis also made an offtake agreement last year with Vulcan who didn't have permits. 2. We can even fulfill the obligations for the first year even if not receiving final permits until 2024: The MoU foresees a ramp up phase from 2023-2025. We are now mining a total of 25,000 tonnes from the trial mine, that's about 4,875 tonnes of active anode material to be produced at our EVA. Surely not all of this will be needed for customer qualification programs.
Thank you if you had the patience to read so far. Sorry for disappounting some, this is not downramping in any way. Just making aware we need to be patient. I'd like to finish with another quote from MT in his ASX investor interview:
"We are in a first class jurisdiction. The only way you are going to be allowed to operate is if you have very first class conditions. But if you do, you gonna be there for a hundred years."
(20min delay)