RE: TGR and TSG7 Oct 2022 15:49
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
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