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President Biden essentially just described Graphite as on par with Lithium and has announced deals with Syrah and other offtakes have today been announced with Nouveau Monde - would be the best time possible for TGR and TSG to resolve their impasse in the next few weeks and for the long term value and premium market valuation potential to be recognised. Capital markets are loving Graphite right now and as a current producer with essentially a sister company capable of producing downstream products the markets would probably absolutely love a combined company with operations in Africa, Asia and looking to establish them in Europe.
Graphite is having a moment, and I think it looks to be a sustained one as prices are rising and demand is pinching!
GLA
Interesting thread mentioning a peer hopeful - European Lithium/Cinovev/Czech Lithium. Can Savannah look forward to funding from the EU's Just Transition Fund? I remember someone on here posted a link a while back to some provisional funding that looked set aside for SAV earlier this year/last year perhaps.
https://twitter.com/sporazene2/status/1582627125898579968?s=20&t=VB01-Nmr2tRsvSQRpG-fMA
https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-programmes/just-transition-fund_en
GLA
The Lithium price continues to rise irrespective of other global macro headwinds - indicative of the industrial and fundamental revolution that continues apace - Europe needs its own sources ASAP and SAV is the best placed to produce soonest of all the European companies progressing their projects. This is not to knock any of the others, but SAV is a simple and conventional hard-rock Lithium spodumene project, seen all over the world with an easy to extract and well known end product used in the fastest growing application and global trend. Portugal's time to shine is coming (hopefully!).
https://twitter.com/Alastai85608932/status/1581893204735315968?s=20&t=ApiwnlUQktyjdxcnPrh8BA
GLA
ALL is one of the most significant near term producers globally, funded substantially to production with tier 1 partners and with 50% of its output remaining to be distributed on what I suspect will be very good terms given the demand environment. This is reinforced by the major discount and conservative SC6 price used in the PFS while the Lithium price itself continues to march on to further highs:
https://twitter.com/Alastai85608932/status/1581893204735315968?s=20&t=ApiwnlUQktyjdxcnPrh8BA
GLA
Yes - I wouldn't want Rio anywhere near SAV until approval is reach and made for the project to progress. To do otherwise beforehand would just inflame any underlying issues and draw unwanted attention of unfriendly figures
While we wait for SAV and Portugal to decide the fate of Iberian Lithium and European dependence on overseas imports, thought i'd share that industry wide news recently includes Spodumene prices reaching all time highs and heading towards $8000/t and that Rio Tinto is apparently on the lookout for good Lithium opportunities according to The Australian.
The Australian
Rio shopping for lithium companies as value soars
Mining giant Rio Tinto is believed to be actively scouting the market ... Buyout targets in Australia could include IGO, Pilbara Minerals,...
.23 hours ago
GLA
The company set out what it expects will be the total costs to complete the remaining modules in Madagascar - but you realise they don't need all that money in one go as they build in a modular fashion? i.e. if there's 3 modules to go they can borrow 1/3 of the required capex, leveraging the funds of existing modules at 30/36,000tpa to pay for it. Then when that next module is up and running and capacity is at 48/54,000tpa they should be able to borrow the next 1/3 for the next module (on better terms as there is less risk/potential for faster payback because of larger cashflows). Then, who knows, at 66/72,000tpa they might not need to even borrow the last 1/3 for the last module, but I imagine they would be able to very easily at that scale and it probably makes business sense to free up more cash for further developments etc. That is the benefit of the modular model - small capex in increments funded from current and expanding production imo.
I expect early next year we will get something along the lines of major updates to timelines as Shishir stated in the presentation the focus is consolidating ramp up now to a minimum of 6,000tpa production per quarter from January.
Accumulation here continues - my first major O&G play since pre-suspension, but it's clear what happens over time with these sorts of company dynamics and deals just looking at KIST etc.
Looking forward to deal completion - thank you to those who continue to reiterate why this is such a good prospect, the numbers speak for themselves - as does management buying significant sums at higher levels.
Deal completion, significant free cashflows, debt paydown and extra cashpile still sitting for the next deal(s) to come.
GLA
In this article published today Fastmarkets (FM) is extremely bullish on Graphite demand for batteries, forecasting demand from the relatively nascent Lithium-ion battery sector to outstrip all other Graphite applications by 2025:
https://www.fastmarkets.com/insights/recent-graphite-price-weakness-masks-phenomenal-demand-growth
It also mentions the struggles new entrants will face on establishing their operations for environmental permitting and highlights that much of the new global supply pencilled in is not due to start before 2025. What an opportunity for current producers like TGR to establish themselves having already worked through lots of the problems and with a clear runway to 84,000tpa-130,000tpa+ in Madagascar alone over the next decade, with the Mozambique assets also contributing 150,000tpa+ over the decade hopefully.
It remains my belief that incumbents such as TGR because of their scale and operating experience by 2025 will hold extra pricing power over new entrants as they are able to rely on low costs from innovations and renewable energy fuelling operations. As we are also seeing, deficits have started in China with producers there suspending production and consumers looking elsewhere for supply as was alluded to in TGR's presentation on Tuesday - much easier to get supply from TGR that can knock out a new 18,000tpa plant in Madagascar using lessons learnt in under a year without all the permitting and studies and years required to build a whole new mine somewhere with little to no infrastructure in place.
Big opportunity coming up that will of course have a knock on effect on the downstream and I hope we begin to hear more about this and the TSG situation over the next couple of quarters.
DYOR, GLA.
indeed dryland - important to remember they do not need that amount all in one go as they are building in a module fashion. They can borrow for each module and Once each module is complete that module will be able to contribute towards borrowing costs and debt paydown and they can then likely borrow money for the next module on even better terms.
I'm v excited to learn more about the growing supply to new and existing customers around the world. We are reaching the end of the fist part of the beginning of the fantastic foundation laying to reach globally significant production levels and profit and this is still just the start of the story.
Really good presentation, agreed. Team came across very strong and it's clear how confident they are at the moment - I think it's absolutely massive news TGR could start selling into China and is growing all of its markets around the globe.
Good thread:
https://twitter.com/Alastai85608932/status/1579768110252335104?s=20&t=_aEq2yyJgZTyPUxym9XICQ
Very excited for the future and return to industry leading margins as TGR now hits scale up at running pace.
GLA
TGR has an increasing opportunity to supply its expeanded production into a rapidly growing market soon to experience a Graphite supply deficit ad demand grows but also one effected by Graphite production suspensions in China over the next couple of quarters according to industry news that one major Chinese producer as halted production and has no inventory. Great time to be an ex-China Graphite producer imo:
https://twitter.com/Alastai85608932/status/1579726411375718400?s=20&t=_aEq2yyJgZTyPUxym9XICQ
Looking forward to this morning's presentation!
GLA
Ah here we go again (if reading for the first time pls read this poster’s posting history for context).
Tomorrtoday, I mention in my post that you bash that I’m keen to hear more on TSG and TGR’s downstream plans. It should be noted that most important is TSG’s IP for how to develop downstream operations and I’m sure arrangements can be reached, that only the parties effected are privy to, as both companies work closely already. It helps that the founders and major shareholders of both companies are the same.
However it should be noted - TSG is an Indian company. There has been a deal in place for TGR to acquire TSG since 2018 and if you look through the activity of last year, the Circular and GM, this was attempted. The deal was SUBJECT TO REGULATORY APPROVAL in India. TGR is a UK company. Anyone who thought TGR and TSG were the same company were mistaken, it was in black and white and TGR has stated it remains both parties’ preference to pursue the effective merger and/or intention to seek an arrangement to the benefit of both parties.
Clearly as you state, and per the issuing documents, and as anyone who understands and is aware of the graphite market, the downstream side is where the “value addition” is most keenly felt and seen with prices for some products reaching upwards of $10,000/t (although per documents already made public TSG does not make and sell these ultra high value goods but they supposedly do for $2,000-3,000/t goods). —— However, it’s clear TSG requires more capital to grow per the latest RNS referencing the subject. TGR is quickly growing into a profitable enterprise and I’d expect this to continue as it continues to scale into a growing market with growing demand. Ergo, the relationship between TGR and TSG is symbiotic - both massively benefit from each other and together as a singular vertically integrated Graphite company would obtain a might premium value on the markets. Indeed - TGR is currently searching for a new London based Executive Director with finance and project development- make of that what you will. A side note to bear in mind is that on its current trajectory towards 300-400,000tpa production by 2030 that TGR will be a behemoth in the global graphite industry - it would be naive to think it would remain as solely a primary producer of Graphite concentrate at that level of cash flow and profit.
The issue is you seem to think TGR won’t be able to benefit from downstream developments without the TSG deal as it stands in its current format - I am happy to wait to see the results of the problem solving that TGR has made noises about already in its announcements, and if the deal is altered to obtain the best terms possible taking into account the benefit of TGR’s positive cash flows/profit too then I am to see what comes forth.
GLA
Looking forward to the AGM end of the month and the presentation being given on IMC next week following the results published last week - if you register investors can submit questions. Another good chance to ask about TSG/Downstream plans etc:
https://twitter.com/Tirupatiuk/status/1578266370906542080?s=20&t=He4auyY86GC9__ynO29DBw
I'm looking forward to hearing about the de-bottlenecking of the plants that took place over last year and the innovations of the pre-concentrate units at the pit heads, CFS, and hydropwer plants coming online and how all of that will improve costs and margins. Now we are on the verge of the 30/36,000tpa capacity aimed for ramp up from this quarter into near nameplate by the next quarter, I am looking forward to hearing TGR's plans for the next 18,000tpa module in Madagascar and for the company to put forward its first timeframe guidance for it's targeted commissioning - hopefully the company will learn from its recent lessons and not overpromise delivery too quickly and allow for a smooth continued ramp up and development in Madagascar. If they reach 48,000tpa+ in 2023, then I think the 2024 goal of 84,000tpa will shift to 2025 to allow for continued modular expansion - of course unless the company is in a position to quicken delivery of the next modules for whatever reason such as growing demand etc.
Also looking forward to hearing about the new Madagascar tenements, the drilling and exploration campaign and new discoveries and of course that long awaited updated website and company presentation - hoping they also produce a similar video to last year's AGM that was a great summary:
https://www.youtube.com/watch?v=OaMcIf1AFRk&t=1507s
So much to come as we round the corner to profitability and further organic growth and complete inorganic growth via acquisitions. Any gems or hints on downstream developments will be welcomed greatly i'm sure.
GLA
As we move into profit I would expect some very favourable debt terms will become available - each module will essentially pay off interest and capital as we go, don't think it will be too hard.
TGR is also looking for a new executive director with Project Finance experience as per stated RNS announcements. Pieces getting easier to put together and sp will react accordingly imo.
You definitely struggle to match anything listed in London or anything that gets anywhere close to TGR:
https://twitter.com/tirupatiuk/status/1576963562366709761?s=46&t=mCSmaGlPwpDiTooRkfaW2w
With the ramp up of production, sales, revenues and profits to come with scale I would expect the market to begin to recognise this inflation point as derisking and growth gathers pace.
GLA