TLG - Media, page-257

Hi Monkey

I've done a few I think this might be the one Pabs referred to...hope it helps.

Pabs

Don't disagree with your numbers $100 easily achievable within five years and potentially much more than that by 2030. Once the tipping point is reached EV sales will rise dramatically. Key is making enough clean green batteries and anodes.

Your valuation of $450 billion equates to $1500 a share on 300 million shares. Seems a lot but not crazy using NASDAQ sales multiple of 30x for disruptor stocks, some are on 50x and in Japan 100x.

Figures are rough here's my take.

EV sales projected to hit 25 million in 2025 and 40 million in 2030
Assume Talga nabs 30% market share = 8 and 12 million cars
100 kg of anode per car, truck, bus (as an avg)
Equals 800,000 tonnes of anode @ $US12k equals US$9.6 billion revenue in 2025 and 1.2m tonnes or US$14.4 billion in 2030
MC on multiple of 30x revenue is US$288 billion in 2025 and US$432 billion in 2030
Say 300 m shares
Equates to share prices approx $950 and $1440.

On a conservative PE basis i.e. profit 25% of revenue and PE of 10x gives share prices of roughly $80 and $130

EV sales and market share assumptions could be out either way just don't know.


Can Talga make and sell enough anodes to justify that?

Yes, means mining 3.2 million tonnes in 2025 and 4.8 million in 2030.
Big step up from 100k tonnes in PFS.
Might be achievable with LKAB's help assume that's why they're on board.
Can stockpile ore in 2021 just need plant capacity.

To hit these numbers Talga MUST enter into contracts with megafactories that WILL be in production in 2025.

Two potential major constraints.

1. Price squeeze on anodes, but not before 2025 maybe 2030 because of the battery supply shortfall, so margins good til then.
2. A takeover offer as production ramps up in 2022/23, issue is whether a cornerstone investor holds or folds.

One takeover offer will probably lead to others and drive the price higher.