I'm yet to see some decent analysis from these YouTube gurus on Talga!!
In his hastily pulled together investment thesis, he failed to mention:
1) Talga has just completed an oversubscribed $32m institutional and retail capital raise;
2) Talga have a longstanding MOU with Mitsui and are in discussions with other 'strategic partners' to JV into the project to support 40% of the funding of the project;
3) Talga have multiple Letters of Intent (LOIs) with key European multilateral financial institutions, development banks and export credit agencies to support 60% debt funding for the project with very attractive credit terms given ESG alignment and critical nature of graphite to Europe;
4) The CEO was the largest shareholder (now 2nd largest) and has a long track record of minimising dilution to shareholders and his financial interests are very aligned to shareholders;
5) Talga's Vittangi deposit is not only Europe's largest and highest grade JORC compliant graphite resource, but the
flake size is 100% suitable for battery anodes. Therefore, Talga do not have to sell any graphite to lower value industrial markets and save costs by not having to micronise the graphite flakes like most other graphite companies;
6) Talga have just finished a multi-year process (approx 3 years) to complete qualification with a range of Auto OEMs and have already attracted a Tier 1 company in ACC to be the first major offtake customer, validating Talga's technology and internal know-how. There are very few companies outside of China/Japan/Korea with the technical knowledge to produce fully coated battery anodes, making Talga's IP highly sought after and relatively unique in Europe;
7) The ACC deal is due to go binding by the end of November and Talga are in advanced stages of qualification with over 30 customers (11 Auto OEMs);
8) Talga have a range of battery anode technologies and high performance materials with Talnode-C, Talnode-Si, Talnode-E, Cathode Additives able to be commercialised as demand grows;
9) Talga is in advanced qualification for its Talnode-Si battery anode that can be blended with other natural/synthetic graphite anodes to increase energy density, which is particularly attractive for LFP battery chemistry, which is a rapidly growing segment of the Auto OEM market;
10) Talga have plans to announce the commercialisation strategy of Talnode-Si in the near term, which will make them one of the few companies with Silicon tech globally that can scale the use of silicon doped anodes in a cost effective manner and have hinted this could not only be done in Europe, but in other jurisdictions as well;
11) Once in production, Talga will have one of the world's largest and cheapest sources of graphene enabling the company to commercialise a range of partnerships and trials conducted over the past 5 years;
12) In addition to the main graphite resource at Vittangi, Talga also have multiple other high grade graphite resources in Sweden, Europe's largest cobalt resource, iron ore, copper and lithium tenements. These deposits could be developed by Talga in the future or entered into partnership agreements with others to co-develop, providing additional future upside for Talga shareholders;
13) Talga has access to 100% renewable energy (hydro and wind) and an independent Life Cycle Analysis (LCA) demonstrated Talga will have the greenest credentials of any anode manufacturer globally (96% less CO2 than Chinese synthetic anode);
14) Benchmark Minerals have forecast graphite supply to go into deficit in late 2022 and reach the tipping point whereby 50% of the graphite demand will be for batteries, surpassing the traditional demand from industrial uses;
15) Europe is entirely dependent on graphite/anode imports from China/NE Asia/Africa/Ukraine/Russia, making the continent extremely vulnerable to supply chain disruptions and geopolitical risks that are actually more acute than rare earths;
16) Talga's operations are strategically located within 1-day drive/train to deliver the world's greenest anodes to major European Auto OEM customers, which is a major strategic and cost advantage given recent disruptions to supply chains through Covid;
17) The decision on granting environmental permits to Talga by the Swedish Government will commence via a Court Hearing on January 30, 2023, with the new Swedish Government providing very supportive comments regarding their ambitions to support development of Sweden's critical raw materials to support decarbonisation at the recent COP27 meeting;
18) Talga conducted another successful drilling campaign earlier this year and plan to upgrade the size of the resource for a 2nd time in late 2022 further building the strategic importance and size of this project to Europe. In 2020, The Swedish Geological Survey (SGU) declared Talga's Vittangi graphite deposit a "resource of national significance";
19) Talga have plans to scale this project from 19,800tpa of fully coated anode in 2024 to ~100,000tpa from 2025/26 and could easily scale to be multiples of this given the size of the resource by the end of the decade. Talga currently have a graphite resource of 65MT @18.6%, and is only 10-20% of the exploration target meaning the deposit can grow significantly with more drilling;
20) The economics and forecast profitability for Talga is extremely attractive underpinned by the extremely high grade deposit; 100% battery anode flake size; 100% cheap renewable energy (some of the cheapest electricity costs in Europe); proximity to customers and infrastructure including rail and port.
I didn't intend this post to be this long - but there's 20 good reasons why I consider Talga an outstanding investment opportunity and were not even touched on by our YouTube guru. I'm sure others can add to this list and it is not meant to be comprehensive, but clearly there is a lot to like!
(20min delay)