Helmdacil
I know I had said I would hold my own counsel, but, with all due respect, I think a comment is warranted here.
You mention Berkshire Hathaway and by association the two leading lights who manage that fund. I would argue that much of that success is a consequence of strategic investment decisions that identify undervalued assets that the market dismisses because those assets are not 'sexy' enough. The funds performance over the years speaks for itself. Those two managers will not live for ever and therein lies the rub.
There continues to be a relentless negative campaign on the question of permits and whether they will be awarded, when other companies in the battery material space in Europe are trading at multiples of what Talga is trading at with minimal factual backing and often with any downside completely ignored.
Beowulf, an iron ore deposit in the mountains to the North of Talga's deposit, has received a permit. I am quite staggered by this news, although it is good news for the shareholders of Beowulf. Last time I looked there was no feasibility study on this mine. Furthermore there was strong resistance from the Sami people and we are talking about moving mountains here, not a couple of million tons of ore a year, the most that Talga would be looking at extracting if it were to increase production to 500,000 tons of active anode material. Beowulf are looking at a multiple of Talga's most ambitious plans and Beowulf would be through a huge open pit, whilst Talga will go underground for a minimal environmental footprint. Finally, last time I looked iron ore does not fall into the category of a critical material, green or otherwise, when hydrogen energy input is implemented.
The Olyu Tolgoi mine in Mongolia is a straw man argument, by this I mean that if Rio Tinto cannot make a go of it on time and on budget then no other operation is capable of doing so. This is a generalisation stretching the conclusion way too far. Again this mine in Mongolia is a huge and deep open pit operation, therefore the comparison does not stand up.
I see no evidence of Talga being insolvent or of Talga not achieving objectives on time and on budget. In fact the opposite is true. Talga raised sufficient funds to build the pilot electric vehicle active anode plant in Sweden at Swerim's facilities. It has done so on time and on budget, probably with some excess cash on hand from the required contingency. Talga raised a multiple of what it was looking for from the retail shareholders, some of which has been deployed for the very successful drilling campaign that has just concluded. Just how big the new reserve/resource statement will be is any one's guess, but what is certain we are not talking a percentage increase, but a quantum multiple increase when it is released this quarter if the drill results released to the ASX are anything to go by. Those results went twice as deep, with in fill and step out drilling, as well as extending to other areas of interest. All of those results were spectacular, the deeper the higher the grade, the deeper the wider the strike.
This new drilling campaign at Vitangi is funded by shelving the Jalkunnen drilling campaign for the time being according to ASX releases and therefore will not deplete the cash reserves as you suggest. Furthermore now that the EVA plant at Lulea is commissioned and in production a steady stream of income might start to appear in the quarterly reports. I suspect these will not be heroic large amounts to start with as it would be pointless to produce large amounts of stock, which costs money, when every OEM end user has their own very specific criteria on what they need, blended with synthetic or otherwise. The fact that Talga is in serious discussions with some 20 end users demonstrates the flexibility of the production equipment that has been installed.
Lastly, Talga has done all of this and has just over 300 million shares outstanding, quite remarkable.
As always please do your own research. I continue to hold.
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