Ann: Talga secures key mine permit, page-18

Valuation Considerations for Talga – June 2025

1. Production and Pricing

• Refined production capacity: 19,500 tonnes/year of Talnode®-C

• Current pricing for premium graphite anode materials (natural, high-purity): USD ~$10,000–15,000/tonne depending on grade and contract terms
  (Use midpoint: USD $12,500/t)

Annual Revenue Potential = 19,500 t × $12,500 = USD $243 million/year

2. Operating Margins (from prior DFS & FEED updates)

• Prior studies suggested robust EBITDA margins of ~40–50%.

• Let's apply a conservative 40% EBITDA margin:

  Annual EBITDA = $243M × 40% = USD $97 million

3. CapEx and Timeline

• Last reported FEED study (April 2024) included capex updates, but let's estimate:

  • Capex likely around USD $250–300 million

  • Production could begin around 2026–2027 depending on final financing and build timeline

4. Enterprise Value

Using a conservative EV/EBITDA multiple of 8x (typical for mid-cap materials players):

EV = 8 × $97M = USD $776 million
≈ AUD $1.15 billion at current exchange rates

5. Net Present Value (NPV)

Discounting future cash flows (starting ~2027) over ~15-year mine life with 8–10% WACC:

• Unlevered NPV ≈ AUD 800M–1.2B, depending on actual pricing, opex, capex, and discount rate.

Per-Share Valuation

• Current shares on issue: ~460 million (check latest exact figure)

• Implied value per share =
  $1.15B / 460M = ~$2.50 per share

⚠️ Current share price (June 2025): Likely trading well below this, reflecting funding risk, execution uncertainty, and market sentiment. There’s a clear disconnect between fundamental value and market cap.

Strategic Premium

Talga is:

• The only permitted natural graphite anode project in Europe

• A recipient of a €70M EU grant

• Aligned with both the Critical Raw Materials Act and Net Zero Industry Act

This could justify a strategic acquisition premium, especially as:

• Northvolt, Umicore, or other EU supply chain players scramble for secured graphite

• China's dominance in graphite remains a geopolitical concern

Conclusion

Now that permits are secured, Talga’s valuation should step-change upwards as:

• Funding is finalised

• Construction begins

• Strategic interest intensifies

Fair value (risked): AUD $1.50–2.00/share
Upside (funded and producing): AUD $2.50–3.00+/share