The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
RNS for me was positive.
Also there was a poster on here whom suggested TGR was selling unrefined graphite to TSG. With the implication TSG were making more money than they normally would in an arms length trade. Hopefully (if I have understood the latest RNS and the posters comment) the recent arms would alleviate that concern, as it is saying TGR are refining the product and selling it to a German buyer
While I cannot comment on some of the post on here regarding fraud etc. From a logic standpoint I am not convinced it would make sense
1. If TGR was selling items cheaply (more than 20% off market say) to TSG what would the incentive for TGR management to make TGR collapse. Surely if they did this TSG would not be able to make as much money.
2. Hermitay venture again if TGR collapsed who would buy equipment from this company. If as people say that they only supply TGR it would make no sense for TGR to collapse.
3. Could Hermitay give credit to TGR, that’s a good question. I assume some payment would need to be paid to cover cost of equipment. Maybe the bank guarantee is equivalent to this?
4. Significantly down myself, on a significant investment however I have seen liquidations before and they are never good for shareholders. Cost get eated up by lawyers and liquidators. That’s why I prefer strong shareholder engagement with the board to change there practices where needed
1. I have now had a response from the company. It was a quite well thought out response from the new board members.
2. My understanding of the milestones strategy is
A. Need £2m working capital to reach 1.5k per month. They have raised £1m (prior equity raise) they are then expecting the VAT refund then to achieve the next £1m. This will then get them to hitting 1.5k per month.
B. The next £1m will be either VAT refund or bank guarantee.
C. The next step is for the additional PCU to bring to 30k per annum
D. The next step is then 36k
E. The next step is the 54k
F. C,D,E will be sourced from residual of B and DFI.
G. The survey recently announced and visit on twitter would relate to potentially DFI.
H. VAT refund as per announcement is expected.
3. Debt due it 0.9 this Dec 24 and 1.8 Dec25. Personally think they should meet this provided they achieve points A/B.
Areas to improve
1. Regular updates. Indicated this would be quarterly once they reach ramp up.
2. More experienced board. In progress.
3. More governance around connected parties and trades. The bigger we get the more governance I would like seen on this.
4. TSG integration.
5. Focus of board, would like to have a board which sets up related companies for the benefit of TGR not themselves. Not sure if this is incentive structure etc.
At the current price and stage as a shareholder I am holding for the near term to see if A/B are achieved.
1. I have contacted the company. They did not respond with an answer initially. I followed up and they confirmed they are looking into responding. They said the management team was visiting Madagascar and hence had not replied.
2. A lot of the negative post on here seem to be re hashing a well known concern of investors regarding integration of TSG. ( Mumbai office not stated, dealings with TSG). The latest RNS on this is clear that they remain committed to integrating. Not sure what else they can say or other evidence which supports otherwise.
3. The focus imo of the company should be on ramping production to nameplate. Once this is done, I would expect the market to re rate the share price. I would then like the TSG integration to be looked into. Again the share price has to be higher to enable this.
3. The change of name from TSG to Prangaf I thought this was more to do to avoid confusion that TGR and TSG are currently separately owned. (TGR and TSG are very similar names and can quite easily be confused). While noting there is no clear plan atm to integrate.
4. The relationship with TGR and other companies if connected parties have to be audited. If the auditors have passed these transaction what else are people bringing to the conversation to challenge or alter a sign off by a professional and independent company.
5. Do I think there are risks, of course there are. The risk I see are not even talked about here: weather patterns in operating area, extension of mine licence in 2030, the head grade and question around why this wasn’t spotted sooner and or is the equipment actually cutting edge, could the board have been clearer in the IPO and RNS about what was actually owned by the company …
6. In the round, I have invested in a mine which plans to hit 30tpa soon and if it does a quick value puts that mine at 40p (see my prior post) imo.
7. Can someone post the link to the shipments of TGR as that was quite useful.
Thoughts
1. Personally I am actually quite pleased by the change. Reducing board to have a controlling share being independent . The changes to governance are also positive.
2. The removal also means we have less cash on board fees circa 50k per year. Again positive in this environment
This is a very positive announcement
1. Current year has been abysmal. Share price IMO is reflective of under delivery
2. Website says contain optivia at UK office. Cannot find a reference to India office.
3. This is a UK listed company, companies house has updated contact details, again UK offices.
4. I am not sure why we would have an India head office currently when we are a UK company with mines in Madagascar and Mozambique.
5. TSG has India office as it is an Indian company, and the whole reason the company had to jump through hoops to originally try and merger the company with a UK one. Eventually this is where it came stuck. Along with the share price decrease which would of made it a wipe out for TGR if we merger at today or even last years prices
6. I have emailed the company and do get response. Though I would say my original contacts of company went unanswered until I met them in person at the meet up
7. Are there legitimate concerns due to a breakdown of trust between share holders and board and impact of financial share price decline. This of course yes. Is the share price reflective of this , in my opinion yes. The next three months if shown they can hit even 1.5k a month (over cyclone season I may add, so let’s hope it’s not bad) would start to rebuild trust and delivery. Given the short time frame personally I am happy to hold until them and re assess
Here are some thoughts, take what you find useful and ignore those you do not
1) The market can stay irrational for longer than I or anyone else can stay liquid .(famous quote). For a thinly traded stock this is even more relevant.
2) Often I invest where either I like the people or I like the assets. This for me sits very well in the like the assets section. While the tenacity and drive appears to be there in the people, the governance and appearing to act without conflict sometimes jeopardise their good work.
3) Madagascar election hotly contested. Final result announced and have not seen any uprising or further contesting. Why is this important. TGR stated the VAT refund was delayed due to election and should be out with 2-3 weeks of election finishing.
4) BAT share allotment is coming up at start of December.
5) BAT have changed their name. They have issued shares to buy another project. They plan to issue shares as payment to connected parties. They have applied ti retain existing allotment potential if shares. Why is this important. BAT appear to need cash to fund there projects, they seem to be trying to conserve cash. If they don’t get approval to issue new shares to either the connected parties or retain existing issue ability they would need to liquid assets.
6) The assets current in production at TGR maximum production is now 15tpa -20tpa not 30tpa originally stated due to the head grade issue. This would mean the margin will be a lot less in my opinion.(as they need to run at full capacity to get less output)
If they hit 15/20 they should be profitable and hopefully any upcoming announcement will show this.
7) Upcoming time of year is cyclone season where they operate. Let hope their improvement made last year hold and some luck on not having a bad cyclone season.
I took advantage of the 1-1 with TGR and here are my thoughts , not necessarily all from the meeting:
1. They were very generous with their time. I was scheduled for 30minutes but end up spending 60minutes and did not feel pressured for time.
2. The CEO sounded genuine, appeared to be working 16hr days including the w/e and was really trying his upmost for the best of the company.
3.The catch up did not replace AGM or similar. I believe you have to have a AGM a certain period after results and so this is likely to come soon.
4. There have been no loans or equity investment in TSG. All monies received from fund raising have been used for TGR. The previous RNS states exactly that but it was good to hear it direct from the horses mouth.
5. TGR have a commercial agreement with other companies to purchase specialist equipment from them. These companies are connected parties to the founder. As per financial statement. I find it hard to believe that the machinery that some posters claim to be substandard would actually be the case, when one would assume that the same machinery would be used in other mines the connected parties may or may not own.
6. From the audited accounts it is clear cash is tight, however since the prepayment date I would assume that TGR will be able to ramp up production to reach the equivalent daily amount by the target date. Hopefully we see this in semi annual results.
7. My preference is for TGR to focus on ramping up production and proving feasibility of existing 30tpa at FY end. I.e cash flow and PL positive.
8. As per 7) my preference is to not waste time on TSG at this juncture it makes no sense. I do not want dilution at this price. My preference is to focus on 7) but give clear guidelines of when you will next have an update of TSG. (which may very well be just we are still considering options but we did X/Y and Z)
9. I requested a list of common Q&A to be disclosed for those not able to attend
10. I requested a TGR calendar of when announcements will be made.
11. I requested a summary box on their website with status/cost etc of each module within each project so we can better see what is where.
12. The battery minerals semi annuals were released a few days ago. They note that they need to raise cash and an option is to liquidate their TGR shares. However I can see no reference to actually doing it. They have 5m shares and 6m which vest in Dec 23.
1. The suspension : I was actually quite relieved by the suspension. More from a point that this would not be something TGR would of wanted and so gave me some security that the auditors Pfk little John where holding the business to account. Given the re listing I am more comfortable that the type of fraud some posters are suggesting is unlikely.
2. Reading between the lines so to speak, it would appear that the suspension led to significant pressure from investors on the board to either change them or give them a period to improve governance. I.e Shishir posted during the suspension “I am hear to deliver/stay”. The assumption being pressure was applied for his removal. This would then lead me to infer he has been given a 12 months to solve the governance issues.
3. The Q1 production figures were a massive disappoint. Was expecting 80% of capacity and got somewhere like 25%. I am not sure why this was, no real reason was given. This had been flagged to the market previously as 80% . The only thing I could see was a remark on getting people trained to operate the machine, which I don’t understand. It could be lower prices made them produce less but again clarity on things such as this need to be improved.
4. People have mentioned the going concern remark. The standard method of accounting is assessed as going concern. Check any companies accounts and the same method would be noted. The only difference is that it was flagged as “uncertainty” around the going concern assumption. This was due to cash position. I would point out that in prior years TGR also has had PFK flag them as material uncertainty around going concern and they are still operating today.
5. My back of the envelope calculation goes something like currently producing 5 tonnes in FY23 with gross margin of 1.4m. 80% of 30 gives 24 tonnes. So approx 5x from FY23. Assuming same margin would give 7m. Cost approx 3.7 (2.2 admin, 1.25 depreciation, 0.25 finance). So profit 3.3m. Assumed depreciation is 10% (10 years life) and constant as FY23. Assumed same admin and finance cost which according to the FY23 would be lower. So 3.3m at 5% would yield 66m. Double todays a share price. Does not include licence rights to Mozambique or Madagascar.
6. TGR should spend the next 12 months, focusing on providing it can extract nameplate of 30, and has the ability to sell, and the makes a profit. It should introduce a calendar of when main corporate news will be announced. Then it should focus on what was known as TSG and clarifying what is being done here. Only then should it look to raise funds for other projects.
My own thoughts , in no way recommending or advising anyone.
1. Governance as a whole feels like it can be improved at TGR. Simple things as stating a timeline of when they expect document to be released would go along way to calm investors.
2. The TSG issue in my opinion is nothing new, and as per my original post clarity and update on this would be welcome.
3. The connected parties mentioned e.g HV etc are all mentioned in prior market announcements (e.g the Mar 22 financial results).
4. Any family owned business in general would want to retain control of their business. Most times such a business will feel like part of the family. This in general is independent of race. Though certain culture may have more of a focus to start a business. This is generally a good thing, supposedly founder led business outperform in AIM and FTSE. If the companies defaults this would in general wipe out the founder, which is not in their interests.
5. In terms of IP etc, a lot of the announcements have implied TGR own the IP, (I.e we have proprietary tech etc) while clarity would be useful, in the current stage I am more concerned with tons of product mined and sold. In addition, it could be that the structure is due to Indian government regulation on restricting people outside India owning assets.
It terms of focus for TGR I see my original post as still being relevant. I don’t see any value in debt financing in current market. Emphasis should be placed from TGR on proving cash flows from existing assets, TSG, ramping up use existing cash. Only when these are done will investor confidence be regained (especially the second point)
Transaction announced in AU stock exchange as completed.
https://www.investi.com.au/api/announcements/bat/7691884d-9b7.pdf
Variation of 1m aud (of 1.5m aud) given in shares. Also appendix 1 in the notice summarise key changes in document if interetsed.
I agree, my earlier post I was worried about the possibility of the deal not going through or terms being changed. However the Battery minerals update for me is very clear. The performance bond has been paid (£1m) and the CGT has also been paid (2.5 aud).. These where the pre requisites for the government approval. The issue of the 9m AUD versus current share price has also been cleared in the update as battery mineral has clearly articulated there payment will depend on the share price at closing ( for accounting) and actual amount will be transact-able at 6 and 14 months after close. (Being 6 months after the 0 and 8 months 50% share award dates) I.e the term of share allocation will not vary from the previously announced variation. The only other payment is that of 1.5m aud which 500k aud has already been paid. The only other question I had was around capital, however on review Tirupati has raised 1.5m gbp of term notes (of which total capacity of series was 3 so potential to raise more though I would avoid such expense) (these I think where quite expensive at 12% rolling coupon) in addition to 5m gbp under the recent share placing. So I would expect them to have cash of 6.5 gbp minus 5 aud minus cost etc. Roughly , 3.8 gbp minus cost. So between 2-2.5 gbp net of deal costs. This is provided they have not used the money raised for other things.
What also was interesting about the battery minerals document, was that they still talked about the shares battery minerals would received having exposure to advanced graphene products including the elusive aluminium graphite product that questor in the telegraph spoke about a year ago. So while, I don’t want to raise that painful episode, what to me it highlights is that there is still must be some confirmation that TGR has said to battery minerals that they would finish with the TSG incorporation.
Downside for me is, poor market management of the company (extremely poor) he has not learnt to under promise and over deliver.
The investor presentation/updates are generally not in my opinion reasonably timed or known when they will appear. Again, managing expectations and setting when things will appear is key.
They should tidy up there annual/semi annual presentations so that you have a update on each mine/project with a summary table clearly saying capacity, capex, expected, on target or not etc.
Still have not heard back from my email. Not sure if I am sending it to the correct email address.
However the main item of completion of battery minerals for me now is clear.
Next steps should be in order
Completion of battery minerals.
Showing 80% of 30 tpa production
Showing price realised for production
Showing ramp to 100%.
Plans for each of the projects with timelines and capex size. ( and prioritisation of these)
TSG acquisition sorted out
Any funding required for capex(and prioritisation of work).
Some thoughts if anyone can opine
1. Reached out to Tirupati over a month ago with a few question. They have not replied. To me this is very poor. Has anyone managed to get any response when emailing the company.
2. For the battery minerals acquisition, can anyone advise if my understanding below, is correct. In the RNS the sum payable is 9.75m AUD with a floor of 5m and cap of 10m Tirupati shares. Can you confirm the currency is Australian dollars. In addition, can you confirm the implication if the share price of Tirupati at 10m shares is less than the 9.75m AUD. I.e the share price is £0.35 at the max shares this equates to 6.2m AUD which is 3m aud less then the 9m stated in agreement.
3. Can anyone advise on the mining projects listed in the prospectus and the stated expected date, and whether the company has hit those targets. (and whether funding is secured or to be funded) When I read the prospectus I get to approx 80tpa. The recent announcement imply decommissioning of two projects the 6tpa and 3tpa. This would imply total capacity at 71tpa.
4. People have mentioned the TSG issue. What i would like to know is that approx £3m of IPO proceeds where allocated to non mining projects (research centre, tsg etc), what has happened to this money given that tsg no longer appears to be incorporated into the company as originally planned and we don’t really hear about any research centre etc.
Any help much appreciated.