Talga's Current NPV, page-205

Talga'sCurrent NPV (Updated October 2022)

If you add the NPV's in the Vittangi DSF and theNiska SS they have a combined NPV with an 8% discount rate of betweenUS$3.5Band US$5.7B.

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The range is due to the Talnode-C sale price range of $7,500 to $11,250/tused in the Niska SS.

In the Vittangi DFS, a 24 years LOMisUS$12,312/t anode and is forecast as a flat price of US$11,875/t anodefrom2030. As this is a more detail document and has been completed since theNiska SS I think we can use the upper range of Talnode-C sales price ofUS$11,250/tin calculating the Niska NPV.

	NPV 8% Discount	Calculation	Net Equity
1	Vittangi DFS	$1,054,000,000	60%	$632,400,000
2	Niska SS	$4,650,000,000	67%	$3,115,500,000
3	Total	$5,704,000,000	~65%	$3,747,900,000
4
5	Share On Issue	350000000
6	US$/SP	$10.71
7	A$/SP	$16.47	Ex Rate	0.65

Even after allowing for a ~35% dilution via ProjectEquity Financing, at an annual 100kt Talnode-C production rate we still get acurrent NPV SP of ~$16.50.

So what will move the SP closer to the $16.50?

1. Permits. The Environmental Court hearing is duein February next year with a decision due by the end of March.

2. Off Take Agreements. We have one Non-Binding OffTake Agreement with ACC, with a decision to go to Binding due by 30^thNovember 2022.

Now that the EVA Plant is operational, the final stage of qualificationand testing by the Automotive OEM’s and Battery Manufacture has commence.

In the EVA Commissioned and Operating announcement it said:

“Large scale commercial testing is a critical stagein the EV customer procurement process for active anode material.”

“More than 20 battery manufacturers and automotivecustomers engaged to receive Talnode®-C samples for large-scale EV batteryqualification and procurement processes”

This being the case I would expect we may have some more binding purchaseagreements in the next 3-6 month, conditional on Permits being granted.

The longer Talga can hold out the more desperate the Auto OEM's andBattery Manufactures are going to become and more willing to pay the price thatTalga wants.

So, it is now a game of Musical Chairs with the Auto OEM's and BatteryManufactures dancing around Talga, ACC now has the option of taking the first chair.Once they do that’s when the music stops and everyone else will scramble to geta seat on the very limited chairs. They all know that there is going to be ashortage of anode material and none of them can afford to be left standingwithout a seat at the Talnode-C & Si banquet table.

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3. Funding. From the recent update:

Talga's projectfinancing strategy targets a mix of project equity and debt, with a focus onEuropean institutional and government-backed funding instruments. To assistexecution of this strategy, Talga appointed BurnVoir Corporate Finance asspecialist financial advisor.

Further tocompleting value engineering and having received a number of Letters ofInterest from leading financiers, Talga has commenced a detailed engagement anddue diligence process with financiers, focused on debt structuring and terms.Whilst responses remain non-binding and contingent upon satisfactory duediligence and approvals, financiers have continued to demonstrate strongstrategic alignment and credit appetite to provide project financing at targetproject gearing.

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4. Resource Upgrade. With the final drilling results in an updated graphiteresource is expected to be complete before the ended of December Quarter.

I the resource upgrade will be around 40Mt at @>25% Cg. This would equate to~ 10t of Cg which would be enough to produce 500Kt of anode for the next 20year. Which is still only half the amount Europe will require by 2030.

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It is likely that we may have two to three ofthe above before the end this year with the Permit by the March Quarter or bythe end of this Financial Year at the latest. If that was the case, I could seethe SP well north of $5. Which would give Talga an MC of ~A$1.75B, which wouldstill be less than a third of the combined diluted NVP's.

Also remember that all the calculations are onlyon 100kt of Talnode per annum. I'm sure that once resource upgrade drilling iscompleted, we will see production increase 5-10 times this amount over the next10 yrs. Giving Talga a further 5-10 times increase in MC.

There is no such thing as a sure thing, as we foundout at the end of November last year, but I'm confident that there is minimaldownside risk at the current SP.

As always do you own research.

Gero