An insightful presentation by TGR’s CEO this evening to answer the concerns of shareholders in response to the recent share price performance. This was in addition to the operating update of this morning. The presentation answered all of the 5 questions that we had submitted ahead of the call which we believed were the key investor concerns, in addition to some further colour on their ambitions
The company has reworked their mine operating plan intelligently and significantly mitigated the potential additional costs of roadworks highlighted in the previous update. See the RNS here:
https://www.londonstockexchange.com/news-article/TGR/update-on-madagascar-operations/15549744
Responses to our submitted questions
1. TGR has raised £16m equity as a public company and have built 27k tonnes of additional capacity. By end Jul, the existing 12k tonnes capacity will be substantially available and the company can quickly ramp up the next 18k tonnes over the rest of the fiscal year. This provides financing flexibility and they are looking at options to ensure they reach profitability this year despite opex increase (fuel costs and steel prices have increased, but some cost mitigation is coming from the new operating plan and supply chain costs are being passed on
2. The CEO stated his specific assurance that TGR will never raise equity at a non-prudent price
3. The TSG acquisition has not fallen away as he believes the market has mis-construed. Indirect foreign investment clearance in India continues to drag on, but they need to keep the downstream business options moving forward while they continue to pursue the acquisition (for example, they are working in the UK to develop a downstream graphene facility). They admit that there are valuation issues as time has passed and TSG and TGR are different companies now to the time the acquisition was agreed
4. Mozambique acquisition – they are still awaiting ministerial approval and continue to work on this. TGR and Battery Minerals’ commitment to the transaction remains strong and they are expecting completion in the near future. This resource will diversify their graphite sources and go towards their aim of providing 8% of the world’s expected 5m tonne graphite demand
5. Remaining public has innumerable advantages and so the CEO (and largest TGR shareholder) has no thought at all of taking the company private opportunistically at current share price levels. They have huge ambition and need capital market engagement
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