Member Info for Glengarth

Extremely significant and important to have MIIF onboard imo - well done to ALL.

To quote a fantastic film: “I think this is the start of a wonderful friendship”

GLA

Good news this legal claim is so unfounded that the claimants can't even file against the correct parties

Onwards

Hi Binbin,

Having managed to get through to them successfully multiple times, my advice would be to keep emails with questions short as they are more likely to reply. You can always send follow up questions.

We are due an update imminently, that is well known by the company and the wider market/investors.

Clearly the BAT deal is nearly complete given BAT’s investor presentation further highlighting payments having begun and provided a timetable to indicate completion, something we haven’t seen before, see below tweet with info or search for BAT’s presentation:

https://twitter.com/alastai85608932/status/1625051744123121668?s=46&t=jXfeBy_Qr8Xwg-9PvvXSYw

Madagascar operations at 30,000tpa capacity established, hydropower coming online and sales and margins pointing upward and gaining momentum, as well as an action plan or guidance for the next 6 months is what we want to see in the next update.

I also would like a couple of things, because clearly the market needs to see them for TGR to acquire a higher value on top of improving operations and strong financials:
1. Professionalisation
TGR is an expert company, filled with Graphite experts such as the Poddars as we know. However, to date they have achieved much with the little resources at their disposal, unmatched by any other Graphite company, except maybe those in China (even they have benefitted from state subsidies however). Arriving at the 30,000tpa symbolises becoming a producer of global stature as one of the largest ex-China. This level will provide cash and resources to upgrade the outfit - I would like to see news about a professional sales office being set up outside of India to engage with future customers - some companies have several professionals dotted around China/the Middle East/US/EU and if TGR is to deal in significant quantities such sales representatives/offices may be of use. Relationships with Hanwa also need to formally be upgraded with this announced to market to show confidence in future sales.
2. Transparency
I’m all for how TGR has worked to date in order to stretch resources while they’ve been tight on cash to expand to a level they’re earning. But at 30,000tpa with ambitions to hit 84,000tpa+ in Madagascar and develop 2 massive projects in Mozambique we need TGR to better deal with the investor community to help attract serious long term investors (some might call them institutions). This involves updating the website and providing clear updated goals and plans going forward for each of the new Mozambique projects as well as turbocharging Madagascar now it’s about to be a significant producer with cash flows to leverage. Reports like the sustainability report should be published when they are meant to be I.e. alongside the Annual Report, and operations updates should become quarterly.

There’s more to be done, for example clarity on the downstream (forget the UK, build in US or even Middle East imo) and TSG. But I’m optimist for the future her

Think we will have an update this or next week, seems to be a trend of announcements coming a couple of weeks after company targets

Also of note is that it looks as though the BAT Suni Resources deal is nearly completed with the first instalment payment already issued to the BAT in January according to BAT’s quarterly activity report . Think we could expect an update on the last quarter etc next.

GLA

The introduction in Ghana to the prospect of value-added downstream capacities is huge news imo. As pointed out historically this step has been taken outside of most African mining jurisdictions - I would suggest developing economies are doing exactly that in this instance and Ghana may become an increasingly attractive investment destination as things progress on this front - it takes one to lead for others to follow…

GLA

Good reading - looking forward to this train leaving the station (fingers crossed)

would expect there's a risk qualification....as we know a successful EIA result and progress here makes SAV Europe's likely largest source of Lithium that is immediately and most readily available extraction following DFS etc - massive wave of investment would follow official approval, larger than just Sprott

GLA

Use the website windy.com; helps track the weather (actually very good in general). From what I saw there was a recent storm that crossed the north of Madagascar and went down the west coast and is sitting in the strait between Madagascar and south eastern coast of Madagascar, think our areas got off relatively Scott free thankfully. So far so good, not as bad as Ana last year, believe bad weather season is typically December-March.

GLA

The EU has awarded European Lithium Strategic Project status in its latest funding round from the Just Transition Fund. It can be awarded up to €50m, though European metal’s capex is well well above SAV’s. €50m would get SAV almost halfway through construction at MdB which as Europe’s largest conventional hard rock spodumene project is just waiting to be classified as strategic for Portugal and Europe’s Green Economy needs imo.

GLA

https://twitter.com/lithiumionbull/status/1619850122170359808?s=46&t=zfb8sWHbUJpQaNESBud3Rg

there was the suggested c.3 year payback by AET at $75/bbl.

Averaging well above 10% over of that price since average effective dat of March 2022 suggest we are about 12 months through, continued higher prices will mean under 24 months left of that payback time, potentially easily sooner the way things are looking.
Remember these metrics will also improve further once the planned upgrade works at the assets kicks off from a 1,000 barrel a day production increase to 20,000, upward further to 30,000 barrels a day etc whuch would give AET around 6,000barrels a day net just from these assets...

interested to see your calcs

Indeed, this article highlights again the opportunity TGR have - the graphite theme ex-China is increasingly gathering pace, TGR could put itself into an extremely prominent position as an ex-China producer of significant scale already at 30,000tpa and non-reliant on Chinese groups for equipment and expertise, if it is up and running by the time global attention fully turns to Graphite. That's so long as TGR delivers which it is in the process of doing, and we will hear more I am sure within the next several weeks.

GLA

https://www.wsj.com/articles/shift-to-mined-vs-man-made-graphite-raises-shortage-risk-for-evs-11674603067

thanks for that coldjoe, I especially like this bit which I think signals intent to the market on a larger transaction to come down the line if AET is indeed to become an operator in its own right:

Generally speaking, Afentra aims to become the operator of producing assets and would be "delighted to replace a company as operator" but is willing to enter an asset as a joint venture partner if the operator intends to farm out after a few years.

B - to be clear in Madagascar there are two mining sites nearby to each other. Vatomina and Sahamamy. At Vatomina there is capacity of 12,000tpa. At Sahamamy there is capacity of 18,000tpa. Together = 30,000tpa. The 18,000tpa is the latest additional module to complete.

????

Madagascar and Suni are 2 completely separate affairs, there is no connection involving the deal for the Suni assets being acquired in Mozambique, not sure where that notion has come from at all.

yep, 30,000tpa capacity should be achieved this month - then it's a matter of ramping up into the end of January and the rest of this quarter into the next financial year from April - capex will be much smaller now all the work for this module is under TGR's belt and it can focus on refining its operations to the significant 6/7,000MT+ per quarter level of production and sales. Company has mentioned it may be able to increase capacity to 36,000tpa with very little additional spend which would mean capacity would be c.8/9,000MT per quarter. If company can henceforth keep admin costs low and reduce production costs to return margins closer to 50% once again as it was able to the year previous then will be in a v good position.
Once it demonstrates solid numbers it will be in a strong position to leverage debt and fund the next 18,000tpa modules, each one becoming easier and easier to finance as profits increase annually imo. I personally hope Madagascar expansion is fasttracked to 66,000tpa using cash flows and debt before turning attention to Mozambique and downstream by end of 2024, as that will result in v significant cash c.£15m p.a. which provides a serious platform on top of any prepayment/offtake deals.

importantly as well however would be good to know from the average oil price since April effective date for the Sonangol transaction.
INA will have been a nice earner since September 2021 though!

GLA

Although it will cost BRES more money, it’s wise they will be sending samples to the US from the same bulk extract taken from Orom-Cross that they are sending to
China - protects them from the potential partner manipulating the results in their favour to strengthen their already very strong negotiating hand and acts as a control experiment. Expecting cash burn to increase as a result but potentially worth it for a better result. Some will be taken by surprise that the Chinese partner will take “several months” to produce results.

GLA

Would like to hear more on the cashew front, want to know if this side of the business is now developing in line with ramp up of production

The US is literally funding its own domestic Lithium projects now - will have a massive headstart and jump on market share vs EU - opportunity exists for EU to begin clawing back some of that industry with SAV providing the foundation for a cheaper, simpler supply chain for the European EV industry

https://twitter.com/alastai85608932/status/1614171293523271680?s=46&t=16YaY5EvH27yNECs6RePDg