Member Info for Glengarth

It actually sounds as though the Portuguese might want this to happen!

Good for the company to clarify this point - the company is not taking on any debt in the acquisition of these projects.

The terms of this deal will blow people away when they look back imo - TGR has been in the right place at the right time here and manoeuvred successfully to progress the acquisition of these massive, well developed, construction initiated Graphite projects in the ex-China Graphite world’s largest producing region.

GLA

haha CM

Good to continue SAV's integration within the wider European context - should help further amplify MdB's importance for Europe's Li-ion supply chain.

GLA

love the smell of shorts burning in the morning from time to time

There is also a major fundamental business being built if you care to pay attention - of course caveated with results as they come in but things looking v good here imo as the company's efforts to secure positive cash, expansions and acquistions over the course of this year - much more solid activity than many peers in the space.

GLA

Thanks for sharing SI

If the Graphite price for fine flake trends as high as suggested in this Benchmark Minerals Analysts estimate the Moz assets will have a very big impact for
TGR:
https://www.youtube.com/watch?v=M-Qh92czdLw

GLA

Worth reading the full thread which features analysis of the Graphite market and supply and demand:

https://twitter.com/Alastai85608932/status/1600825665041072129?s=20

IMO TGR will be in a perfect position as a cash positive, probably profitable, operation at 30-36,000tpa capacity and sales are ramped up (imo, DYOR) as it comes into possession of the two huge new assets ready for development (1 already construction started) in Mozambique as it will have an ideal mix of small/fine through to large and jumbo flake graphite to sell into the market. This should enable it to begin to progress Madagascar to the next stage with modules taking capacity up towards over 50,000tpa/70,000tpa while progressing optimisation work on plans and development for Mozambique in whatever format that takes (my guess is modules of c.30,000tpa) in place of the plans BAT had made for them. The earlier and larger Madagascar is developed and the larger cashflows that can be generated, the easier funding Mozambique will become. Joint cashflows from Madagascar and Mozambique will make funding expansions for TSG or the setting up of downstream operations in UK/Europe much easier imo.
The fine flake is what is needed for a lot of the downstream EV battery anode precursor material and larger flake for the expandable Graphite market that TGR already supplies.
It is important the company achieves its downstream goals as it intends to by ensuring firstly that the engine-room of a vertically integrated company is running smoothly and is profitable so the downstream doesn't drain resources if it is not yet at its own level of profitability and does not result in losses - as much as I try to state, that is why we must focus on the mining operation because having a profitable operation early on will result in stronger share price performance and less dilution being required as a result in the long term as some have been keen to voice their concerns over, as well as better financial performance of a fully integrated operation down the line imo, and provide the maximum benefit for all shareholders.

GLA

Yep rite - another major investment of mine, while has made progress and finally looks to be crossing the line for its deal in a South East African jurisdiction has taken 16 months to get to this point, similarly to AET's efforts in Angola - but I have faith this will work out well - AET's management are well regarded in their industry, with a very successful track record, won the competitive tendering process for the blocks being acquired that required a process, and of course presented at Angola's flagshop O&G conference only within a week or so ago espousing the growing transparency and credibility of Angola as a place to do business - these deals completing will be the icing on the cake and the starting gun for Angola's move forward/further progress in the eyes of the international O&G world imo.

GLA

How many times have Goldman and MS done this so far in 2022 just to buy the dips they create in the companies that will dominate the industry over the next decade?

Apologies, got that wrong - wee were provided shipment and sales for Q4, not production - but I guess that could be just as useful if we get a repeat? maybe better actually as may demonstrate the upward sales trend we are expecting to follow growing production...

In terms of the production numbers for this Q3 and Q4 - for Q4 of last year we were told the Q4 numbers i.e. Jan-March of this year in a 22nd June RNS of this year - so good chance we will hear before the full year results are published next September imo, and don't see why we wouldn't get a similar production update in maybe in March - if the company is hitting its guidance I expect they will shout it from the rooftops.
Ultimately we need good execution of the strategy in Madagascar, followed by Mozambique and the downstream, a clear line for continued financial growth and finally returns, and a very sticky shareholder registry for the share price to really motor upward imo.

I think the next big news for us in terms of operations and the company's progress will be the Mozambique transaction completing and then confirmation we are hitting rated capacity in the next quarter of 6,000MT+ of production and sales are following closely - indicating the positive bottom line is being achieved, followed by news of work for the next 18,000tpa module in Madagascar commencing, funded partially via debt and cash flows from the 30,000tpa operation.

On TSG it's interesting because we don't know for sure now what any resolution to the impasse will look like. The company has raised the idea of alternative to a simple merger, such as TGR setting up its own downstream operations, independent of TSG (but which i'm sure would use the expertise of TSG as has been seen in practice with pre-concentrate, hydropower and CFS innovations).
If it were to take the route of the previous structure, I would encourage all of us to demand clarity on what TGR would be buying/merging with in terms of the financial performance and capital needs of TSG, as well as how its independent valuation has been reached, to take it through to its own inflection point as is being reached similarly in Madagascar.

Currently, as far as i'm aware TSG has a capacity of 1,200tpa of downstream products and in the 6 months to September 2021 it had c.£1.3m of revenue (2nd December 2021 RNS) - I hope we would obtain a clear update on what the situation is were the transaction for it to be resolved.

As RiskisReward has been keen to point out, a successful downstream, vertically integrated segment is likely to be very valuable in the future - just look at Syrah Resources and Renascor Resources (although remember TGR/TSG is able to build facilities at fractions of their costs).
Further, I would expect the deal, if it takes the same shape as last time, to use a share price for issuing shares at whatever TGR's share price is at the time - similar to the deal for BAT and the Mozambique assets, as TGR is now a listed company, whereas previously the deal was arranged as an unlisted company and its previous raising price of 20p in 2018 was the only metric/reference point to go from, so will depend on the market at the time i'm sure.

There's been big news in the Graphite world this week with Renascor Resources raising serious money to develop its project in Australia. Certainly seems like viable advanced Graphite projects are getting more attractive - Mozambique assets either side of Syrah's Balama project with a basket ideal for EV anode precursor materials will be strong going forward imo.

GLA

Would be inclined to agree with last point you make re catalysts and visible execution, including higher sales are now what the market is waiting for before the re-rate upward begins.

However a 16.7% dilution roughly in return for increasing TGR’s Graphite resources by a factor of around 7x(!), maybe more, and at higher grades in the worlds largest Graphite producing region outside China, while we have an operation in Madagascar on the verge of producing a positive bottom line for the company seems like a good trade in my book to put the company in a very good stead to benefit from the rise in Graphite demand.

GLA

At 30,000tpa which the capex has been used for, the returns from sales of the forecast production over this Q3 and Q4 are likely to result in a cash positive bottom line as you are rightly to be keen to see - my point, which was inferred, perhaps should have been more explicit, is that it's widely expected using the achieved prices and results to date allows us to forecast and make projections so that as long as sales are close to in line with rising production that in my opinion (do your own research, not investment advice!) the bottom line should be in profit at this capacity and hence the capex figure will provide a remarkable return for capital deployed given that peers such as Syrah have spent over hundreds of millions of $ and are yet to return a positive bottom line, and many others require over double the capex to reach a point of profitability.

I understand the enthusiasm on your part Genghis to see this positive return signposted/forecast, but anyone paying attention can see that IF sales are anywhere close to the forecast production figures that you can expect a strong financial performance. I imagine there will always be a difference between actual production and actual sales as with any commodity company owing to timeframes, contracts and stockpiling etc.

The company and the CEO actually has indicated it expects to achieve this positive bottom line at the rate of 30,000tpa in interviews and alluded to it in announcements - but first and foremost it must achieve steady state production and smooth operations. I think it would be irresponsible of the company to come out before this is achieved and just bluntly state it expects to make a profit when we all know this would be extremely heavily scrutinised and the company cannot make such certain/definite statements like that which would probably go against regulations/guidance/good governance practice.

We must walk before we can run, and as an investor you should be extremely interested in the fundamental operation that will fuel the financial growth of the company, but that is why achieving rated production is so important to anyone's investment here first and foremost, and assuming the company is building its sales pipeline in line with production.

GLA

In case anyone needs a reminder of the size of assets being acquired from the Initial transaction RNS:

- Montepuez is an in-construction high-grade graphite project with a Mining Licence and Environmental Permits in place. The Montepuez Project is underpinned by its high quality and strategically large resources and reserves from its two key targets, Buffalo and Elephant which contain mineral resources of 119.6 million tonnes at 8.1% total graphite content ('TGC') and ore reserves of 42.2 million metric tonnes at 9.27% TGC.

- The Balama Central Graphite Project is located approximately 260km east of Pemba, along the Pemba - Montepuez - Balama public road, within the same region as Montepuez and other graphite producers in Mozambique. The two main graphite ore bodies, Lennox and Byron, have mineral resources of 32.9Mt at a grade of 10.2% TGC.

GLA

It creates a floor in the sense capital has been raised, more institutional investment has come onto the registry and we have more certainty over these massive Graphite assets being acquired by the company, whereas before there may have been uncertainty over completing the acquisition and the capital necessary to do so - that uncertainty is pretty much eliminated.

The working capital referenced is for work optimising the plans for these assets and the Mozambique team that is probably being setup - as anyone following the company knows TGR is able to achieve very good returns on capital deployed having essentially spent c. £12m capex to achieve 30,000tpa in Madagascar. Obviously with larger operations coming under the banner of TGR with these news assets there is more work to do alongside Madagascan operations and expansion so more human resources will be needed to develop these optimised plans for the Mozambique assets , I don't think that's difficult to comprehend as Madagascar continues to grow toward 84,000tpa+, therefore more resources are needed. These Mozambique assets already have all the permitting to go to 150,000tpa and 1 of the projects is already construction-started.

But don't forget Madagascar is now reaching its inflection point where it is self-sustaining with cash from its globally significant 30,000tpa level so long as we see sales growing in line with production. I agree production is one thing and sales is another - that is the next thing we need to see to continue to boost sentiment and confidence in TGR and re-rate the share price upwards. Good chance TGR is the first ex-China Graphite company to turn a net profit imo, only an opinion though, do your own research.

All in all we are securing two major projects with fine flake baskets like Syrah Resources Balama project bang in the middle, ex-China's largest Graphite producing region in the world, that serves the EV industry already and is allowing Syrah to set up its own massive downstream plant in America, while graphite prices for fine flake have also rallied higher significantly, not hard to see the parallels here. I think that calls for some optimism :)

GLA

Well said SI

Seems like some (the usual) are a little upset on a floor being created at 35p, shorts will burn, and the confirmation of these huge assets being acquired to reach TGR's 300-400,000tpa goal for 2030. These assets are a big complement to TGR's Madagascar assets enabling it to become a global major of both fine flake and larger flake production, allowing it to sell into the whole suite of Graphite products and various industries.
Concerns about PIs not taking part in the placing (better to institutionalise the registry to long term holders imo) the opportunity exists right now to buy at under 5% higher than the placing price, and was indeed even closer to the placing price earlier.
If TGR was not going to secure these assets, someone else would have, hence the quick action earlier in the year to vary the transaction terms and this corporate action announced today to finalise and secure them with the confirmation coming from the Mozambique government - savvy move by TGR imo to establish itself in the world's largest ex-China Graphite producing region that well help put TGR on the map in a similar way to our new neighbour Syrah Resources.

GLA

Interview just posted: recommend watching/listening

https://twitter.com/BigBiteNow/status/1599704937339813888?s=20&t=E2sk5iH2XM_fq6swnPuo-A

GLA

Good to see long term institutional investor Premier Miton buying more

GLA

Incorrect Rogue - TGR stated they would not need to raise further funds for operations in Madagascar - today's announcement is for a transaction in Mozambique - welcome to the board ;)