Member Info for Glengarth

Depends on whatever this partner in China might feel like offering and/or is after, and they've got a lot of negotiating leverage imo as other BRES will be a bit stuck:

From the annual report:
With regards to future capital expenditure on the Orom-Cross Graphite Project, the Company may need to raise additional capital beyond the Working Capital Period to fund additional exploration work for the future development of the Orom-Cross Graphite Project.

Investors should also note the risk involved mentioned in the paragraph below the above in the report:
The Group has been approached by potential strategic partners who may eventually provide an offtake, funding or development scenario for the Orom-Cross graphite project. If this is not successful, the Board may consider stopping the project until further cash can be generated.

If you are concerned about financing you should pay attention to that last sentence. Investors should look to see how other offtake agreements in other companies have been structured. A lot depends on just how much material this one potential "strategic" partner may be after - rarely (never) does a single offtake prepayment pay the whole CAPEX needed for a project, just something to beware of, as timelines do tend to take much longer in mining than expected.

I would work on the assumption that any equity investment at the project level will give this potential partner over 50% of Orom-Cross, see GGP and Newcrest as an example imo. Very strong Graphite market however might mean something good can come for BRES shareholders.

GLA

The effective date of the INA deal is end Sept. 2021. Initial payment - $9 mill -> upwards to $25 mill. 15 months of c. 780 bopd. Brent avg. $95. Netbacks of $55(???). Deal has generated $20 mill? Deal already paid for itself? ?? Wow. #AET

https://twitter.com/Even_reven_/status/1613477105605677056?s=20&t=rxOSnwlLqjUEjESpI3Bocg

AET to go from strength to strength as each deal is completed and the next deals line up?

Excellent news this morning with 1st deal done! Sets up for the second extremely nicely also to complete this quarter imo

GLA

Excellent

Indeed A_clabb - take NextSource Materials as an example. A company with a Madagascan mine under construction in the south of the country. Good deposit and great BoD and a fancy website. But it's only about to complete construction of a 17,000tpa module, which as we know can be more difficult in operation than it sounds. They have some supposed offtakes and un-funded plans to build downstream plants. No revenue to date. Mcap = $206m vs TGR's mcap of c.$43m , despite 30,000tpa capacity coming online and positive cashflows likely from this quarter with huge resource increase due any day now on completion of Suni Resources Mozambique asset acquisitions- crazy disparity in market valuations...

GLA

For the past 9 months+ we've seen Russian oil make its way onto market at reduced prices evading Western sanctions, recessionary fears, interest rate rises, covid scaremongering, US SPR releases.

Despite all of this oil seems to have held up relatively well, falling to mid $70s.

We are now seeing inflation forecast to have peaked, interest rate rises slowing and set to fall in second half 23, the US SPR looking to repurchase oil from February to refill its strategic reserve, and a resurgent Chinese economy re-opening to the world spurring industry, manufacturing and global travel.

My oil price outlook is pretty bullish as a result, any others share similar or opposing views?

Just for fun OAPK20 ;)

Great find starfox - we all wait with baited breath - as we know, SAV and Portugal have the opportunity to be in the driving seat as the first major producer of Lithium on the continent

None of the following is advice, legal or financial, and is just my thoughts. Always do your own research, etc. Beneath, I try to explain my interpretation:

HarChris, essentially BAT has loaned AU$29m to its subsidiary SUNI over the course of however many years to develop the assets in Mozambique. Obviously normally it wouldn't call in such 'debts' from an intra group company until the assets were earning money etc as all monies were just internal loans from parent company to subsidiary, and the monies would probably be consolidated anyway under group financial statements. The structure of this transaction, as clarified by TGR in its RNS, means that what was classified as a loan to SUNI is no longer repayable by SUNI to BAT, and is instead treated as if the debt is owed to TGR, hence no external debt for TGR.

OAPK20 - thinking about it, TGR never lent money to SUNI for any of the developments to date.

So what is there for SUNI to pay back to TGR? There is nothing to pay back to TGR. I believe this is an accounting issue now, but what it means is TGR acquires SUNI without there being any ongoing burden or liability out of the control of TGR or something that makes TGR vulnerable. TGR is the parent company and will control 100% of SUNI.
BAT would have lent money to its subsidiary SUNI in the same way TGR probably lends money to its subsidiaries that hold the Vatomina, and Sahamamy & Sahasoa projects, namely TRM and Rostaing (see the Tirupati holding structure on page 87 of its prospectus).

If you want a full technical accountant's explanation maybe you can ask one, or even email TGR to ask for a step by step walkthrough from the CFO (but not sure he would dedicate time to what has been included in 2 RNS announcements now). But it's clear to me there isn't a burden on the group, it's a project level entry on the balance sheet between TGR and what will be its newly acquired subsidiary that holds the Montepuez and Balama Central graphite projects, i.e SUNI Resources. So pretty sure there is not anything to worry about, there is no 'debt'/ that needs paying that we need to worry about leaving the group, it's essentially money we owe ourselves so, again highlighting another facet of why this deal is so good - we are getting a project that has had millions spent on it for less than the total value of the money invested over the past 5 years or so - ofc I am just a PI so may be wrong, don't take any of this as advice, just my interpretation of what has been announced.

Readers may ask why/how TGR got such a good deal - the answer lies in Battery Minerals' own history and includes things like changes in management, wrong place at the wrong time, and other decisions made by BAT (if you're bored read through Hot Copper's BAT bulletin board for more context). Conversely TGR is in the right place at the right time to take these assets off BAT's hands and develop them ourselves in an environment much stronger for Graphite than it was 5 years a

just noticed you can't write a certain word here without it being asterisked with * over the first 4 letters - will give you a clue for the word though - they're currently 1st place in the UK football premier league!

As long as it's not more than say 25% below because of the mentioned delay to part of the plant I don't mind as it's not an operational issue once it gets up and running tbh.

Graphite companies may be set for a make or break year imo with some companies getting financed and others struggling. Being a current producer, rapidly expanding with great projects in its ****nal, and about to turn into a positive earning company sets out TGR from the pack of runner and riders imo.

Of course the company may be able to expedite its building of the next 18,000tpa modules, maybe building 2 at the same time concurrently. However, I would not expect this to happen tbh - would be huge if they were strong enough to do so and might take the market by surprise if they did so.

GLA

Happy New Year all.

As far as i'm away next earnings in full will be full year results that come after year end of March 2023 and are publishable within 6 months. However, I would expect the company will indicate (you can use your own brain to do forecasts using rough figures already provided for pricing etc for what the financial result may be by adding to the first half figures published recently) on how production and sales have been in Q3 just gone and Q4 that we are now in. Ramp up to 30,000tpa rated production is underway as per the half year results, with a target of c.6,000MTs this quarter, although likely to come in below guidance because of the delayed shipments for the last module/plant to bring its full 18,000tpa capacity online. Q3 production alone just gone should be higher than the whole of the first half of the year, and would still expect Q4 to nearly double on Q3. We are also yet to see the hydropower kick in as they work on the necessary tweaks for that.

There's also the upcoming news of the exploration and drilling campaign ongoing and the extra tenements being acquired which is estimated will take total future production capacity in Madagascar from a target of 84,000tpa up to c.120,000tpa.

Personally I hope the company will focus on expanding Madagascar rapidly so that it will be in the strongest position possible to leverage its finances for the Mozambique assets and their construction - as they have in Madagascar I am sure TGR will want to be able to reach a position there where operations are self-sustaining/profitable asap before further expansion of further modules up toward the 150,000tpa+ target.

I reckon it would best suit TGR to carefully build and ramp upto c.66,000tpa using prudent financial means i.e. staggered debt and refinancing of loans with each module as repayment is derisked. I reckon we reach 66,000tpa by end of 2024, and 84,00tpa is reached in 2025 looking at timelines as they have worked out to date now. At that production level I reckon it provides £10-£15m free cash flows - this will allow the company to easily ramp up to 84,000tpa and beyond in Madagascar and fine-tune plans for Mozambique - if the first module at Mozambique costs something like £25m (I have no idea, could be lower, could be higher but don't want to be accused of under-estimating) then with free cashflows as stated above and possibly a big pre-payment for guaranteed off-take of fine flake from the construction initiated Montepuez by a customer as seen around the world then developing that first module in Mozambique shouldn't be too hard and limit further equity funding.

From there, the downstream is all to play for imo and I would hope to hear more about TSG/downstream this year.

OAP - your question on the debt for the Mozambique transaction: please read the RNS, that's why they published a clarification because people clearly didn't read the initial transaction RNS - there is NO external debt owed to anyone by TGR.

It’s funny riskisreward - you say that but it almost sounds like you WANT a suppressed share price. Your short must be quite crispy today.

You have continued for months (feels like years) to deny the progress that is being made, it’s significance, and the importance to having a profitable business to support the more expensive downstream - its like you just think the company can magic profit out of thin air.

Hope all had a happy Christmas, clocking out till the new year.

GLA

If the company can provide an update in Q4 that we achieved production and sales within the guidance provided that will be excellent news, as well as offering a view on Q4 Jan-March outlook v guidance

Dry land, sorry not meant to say specifically for you, just a disclaimer nothing I’m saying is financial advice for other readers :)

There’s no point in talking about the downstream for now imo until the finally reveals what it thinks is the best way forward.
TGR has made it clear that sorting out the primary operation to cash flow positive/profitable is the most important thing for it at the moment - doing this enables the company to grow organically via reinvestment of cash and opens up debt financing, beneficial to shareholders!
Build the strong foundation and operational track record and happy days - from the announcement this morning that is happening and I am very happily surprised by the strength of the results when considering the disruption that happened at the start of 2022. Now without the higher costs associated with the disruption that we should see in the second half, I.e. quarters 3 and 4 that we are currently in, and the stated production guidance provided for this period, I reckon we will see the positive financial result we want in my opinion, do your own research!

The downstream and other projects will follow, but sort out the cash engine at the start of the integrated supply chain first is the best approach!

GLA

The negative *Ebitda Loss reduced

Very pleased with those results - despite being the toughest time in TGR’s journey so far because of the bad weather that caused disruption to operations in February/March 2022 the company still achieved huge production growth (63%) and sales increased 78%. Admin costs were down, and again despite the tumult of the first half of the year the Loss for the company reduced despite higher costs!
It’s clear in my opinion, do your own research, that with a normalisation of operations post the bad weather, with the new capacities ramping up and further cost mitigation work being completed that at the steady state 30,000tpa operation a very good financial result will be achieved by the company!

Further discussion to come I’m sure!

GLA

ALL doesn’t need to do a ‘fundraise’ as such - but it does need to come up with 50% of the balance of the £30m needed for the increased capex estimate that it will split with Piedmont PLL - as of today mcap is just over £200m, it still has 50% of the production free to make arrangements with, and the rather outstanding economics put it out front of the pack of soon-to-be Lithium producers. These facts mean ALL should find it very easy to produce the balance, be it via equity, offtake prepayments or even debt in my opinion - all made easier by the work done to date via infill and expansion drilling and will be further strengthened by demonstrating the quality of the project by the update Resource Statement and subsequent DFS showing larger resource and longer mine life etc.

GLA