Always appreciate your posts Gvan, but at the moment I'm feeling more pessimistic.
I'm not all doom and gloom, but expectations vary. This started started as a quick reply to your comment in the brackets, it turned into a long one!
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In a nutshell I don't have much of an expectation for achieving near DFS level sales prices in the first year of production.
In a panel interview shared a while back MT expressed frustration for how Talga's potential customers are interested, happy with the product, yet remain unwilling to pay the asking price. Seemed like one conclusion from that panel is customers need a more compelling reason if they're going to meddle with their (currently) reliable and predictable Chinese synthetic supplychains. The conclusion I reluctantly come to is that even if Talnode-C is an equal product, with all the green industry bells and whistles, it isn't reason enough on its own. The customers will want to pay less to make the leap. Thus in the current circumstance the only way for Talga to put themselves in the game is to drop their prices?
As far as I can see, the only way to get first year offtakes at DFS prices is for there to be a fundamental upset in the current power balance with China and global synthetic graphite supply. And it would have to happen soon, like this year soon. I hopefully speak for everyone when I say this is what we're hoping these new European laws/policies might achieve. It's not enough to return to how things were a year or two ago, need more than that. The continued use of Chinese synthetic graphite would have to be made unappealing/difficult/expensive enough that it becomes worthwhile to take a risk on Natural graphite from a new company like Talga, while paying top dollar for the trouble. I think it'd take a small miracle for events to play out like that in time for Talga's first offtakes.
If production is on track for the second half of 2025... I can appreciate that holding out so far could have resulted in beneficial leverage for Talga. Just a shame that after all this time Talga could be to be forced to negotiate from a disadvantaged position if macro situation sticks around. I'd take an offtake for a lower (but still economical) price at this point, might not feel like a win, but it's a necessary milestone. Clocks ticking, there has to be sales one way or another. At this point I'm mostly looking forward to seeing them execute the business plan, if there isn't a big windfall in the first year than so be it. If they can show they can execute then the money should follow.
I'll end on a positive though (positive for Talga at least). The vertical integration and graphite purity gives them a remarkably low cost basis, it's reassuring to know there's some wiggleroom where they don't need to match the DFS prices for the project to be economical. That is my understanding of the situation anyway, hopefully the correct understanding. In contrast I've seen some eyebrow raising DFS's from other stocks, one where they relied on graphite prices going up at least 100% just to break even. Another whose price/ton was more realistic than Talga, but their profit margin significantly relied on the offset of tax subsidies, not exactly confidence inspiring. Most other speculative graphite companies in Australia don't share the same comfort. All of that makes me think it's still worth the risk, sucks that this sentiment why I'm losing money right now, but that's a story for another day or never.
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