So what is Talga doing? As stated before, Talga used to be a gold miner. In simple words, they were about to dig gold out of the ground. Today, Talga owns 100% of five graphite projects in Sweden and is digging graphite out of the ground.Here are the five graphite projects:

• Vittangi
• Jalkunen
• Raitajärvi
• Pajala
• Pitea

Highest grade in the worldFrom a total of 25 deposits the one with the highest grade is called „Nunasvaara“ and is located within the Vittangi Project. In total, Talga owns 3 of the Top 10 grade graphite resources in the world. That is quite an impressive number. Also, in the early days Talga was not shy pointing towards the advantages of having its operations in Sweden: ​

• Ranked nr.1 mining jurisdiction in the world
• Low corporate tax rate of 22%, mineral production tax 0.2%
• Low cost power from hydroelectricity and nuclear grid.
• Railway with direct link to European markets

In an investor presentation some years ago Talga highlighted that the EU consumes 20% of the world's natural graphite production and imports 95% of it. On one hand, this sounds very promising because the EU has classified graphite as a critical raw material. There might be a strategic interest to support quality graphite projects inside its own territory - like Talga’s.On the other hand, it also means that Talga is directly competing with its Asian counterparts in a competitive worldwide market. In mining - but also in other areas of business - this has proven to be devastating for european companies since cost of operations almost never can be as low as in Asia.

China plays every card they have and they will do so also in the future.

‍So, what makes Talga special?

‍Mining graphite is only one side of the coin for Talga. Graphite is made from layers of graphene so in theory anyone can produce graphene in a laboratory - but the big question here is at what volume and cost? And here comes the story: Talga’s ore is different. Talgas ore is conductive straight out of the ground (!).

It’s like an electrode. In addition to that, Talga came up with a unique process to liberate large quantities of graphite and graphene directly from ore (in 2 of the 5 core projects). They can cut out entire bulks of the stone and process it in only one step. The process actually drives molecules between the layers of graphite to liberate pristine graphene in a single stage.

Talga's graphite mine

The world's biggest graphene producer? Since natural graphite is already made of graphene, to separate graphite to graphene it is very expensive and hard to scale up. Due to the world's highest grade resource in the world and the new processing method Talga claims they will be a game changer and will ultimately be the world's biggest graphene producer.

Graphene is no doubt an extraordinary material whose commercialisation pathway has been constrained only by volume and cost of production, not applications. Over EU$2.5B in graphene research funding has been launched in the EU (Sweden) alone in 2014. But at some point, somebody will have to deliver the volumes once graphene finds its way into more products.

I believe there might be a chance for a European miner to compete with the Asian counterparts. But Talga has more to offer.

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‍Talga’s Timeline

‍Looking back in the history of the company we can see some interesting twists and turns. In 2013 and after its gold ventures in the early days Talga still described itself as a ‘mineral exploration & development company’ In 2014 Talga tried to get rid of the old gold and iron-ore projects. In 2015 they started to call themself a ‘Technology company’.

This was after they added ‘strong technology capability with over 20 PhDs and Engineers with energy product experience including: ex-Toyota, Tata, Dyson and Cambridge University alumni.’ The company moved from metallurgical breakthroughs in the lab to benchtop scale in their demonstration plant.In 2016 Talga called itself an advanced materials company. And stated that they are a ‘Technology minerals company commercialising the world's highest grade natural graphite project to mass produce graphene and related products’

Graphite blocks (Slide from Talga's company presentation)

High volume / low cost graphene. In February 2014 Talga announced exceptional results from graphene testwork on the Nunasvaara graphite project. Talga Quote: ‘Graphene can be directly taken from unprocessed, unpurified Nunasvaara graphite ore in a onestep environmentally friendly process. In other words, no crushing or grinding or purification was required. Something that is unique in the world.’This announcement has sparked some attention in the investment community.

By making use of this ultra-high grade deposit and patenting its own processing mechanism, some believed there actually may be a real chance for Talga to break the chicken and egg problem. In Talga words: ‘Talga aims to enable large commercial graphene applications which have to date been impeded by absence of bulk supply and prohibitive pricing.’Talga also said they would be able to produce high volume for low cost.

Talga assumed $55/kg ($55,000/t) for future bulk pricing in its scoping study. Something that analysts said will be very hard if not impossible to achieve.

‍Focus on four markets‍

The media at time was excited by future ‘hi-tech’ applications like bending smartphone or TV screens, however, Talga repeatedly pointed out that they believe the main driver of near term graphene commoditization is additives. Talga decided to focus on four core markets that they believed were easy to access and would need huge volume of graphene.

• Batteries
• Concrete
• Coatings
• Composites

Personally, I was triggered with the concrete and coatings examples. I read that if you add just a little bit (0,5% - 5%) graphene to concrete, UK scientists have found that it will be more than twice as strong and four times more water-resistant than existing concrete.

Maybe also worth to note, by including graphene the amount of materials required to make concrete can be reduced by around 50 per cent – leading to a significant reduction of 446 kilograms per tonne of carbon emissions.Considering the amount of concrete that is used worldwide this alone would make graphene demand skyrock. And Talga is sitting on a huge pile of it. On top of that, I heard that Talga was also working on electrically conductive concrete.

Talga's graphite is so pure that it is electrically conductive

Snowfree roadsIf you make concrete electrically conductive it becomes one big underfloor heating element. So you can run a weak electric current through it and heat the ground up. This could be used for roads on airports or bridges that you want ice free in winter. However, driveway heating already exists. They work with water pipes, gas pipes or electrics. But the copper cable roasts and causes problems. The water pipes may break and need costly maintenance where in some cases the concrete has to be opened again. Ice free wind turbinesGraphene can also be mixed into other materials. In winter time wind turbines are cleared from ice with helicopters pouring chemicals over the blades. With talgas material you can make the blades electrically conductive and head them slightly up. In more futuristic scenarios cars might be able to charge wirelessly while driving (!) on roads that use Talga’s graphene mix.

Slide from Talga's company presentation

Potential Market for coatingsGraphene coatings could be found in applications where water-repellent surfaces are required. For example ship hulls, glass surfaces (mirrors, windows, windshields) and textiles. Coatings with superior chemical, moisture, corrosion, UV, and fire-resistance properties could also be use cases for Talgas graphene. On medical devices, these coatings would provide a biocompatible surface that is resistant to degradation. There are potential applications for graphene coatings in nearly every industrial sector, from aerospace to personal care. Examples include: more efficient and flexible solar cells, nano-electronic devices, supercapacitors, high-sensitivity gas sensors, molecular separation, and medical implants.Talga started shipping samplesIn 2016, first samples were shipped to end users. Talga also announced a collaboration with Tata Steel UK.

In the months and years that followed a huge amount of partnerships and collaborations were reported. Most of them were so-called NDS, non-disclosure agreements. In a company presentation they described it as follows: ‘Talga has evolved into a high tech advanced materials and technology company with a unique vertically integrated graphite to graphene product supply chain.

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’New focus

‍However, in the last two years Talga’s focus shifted again. This time the focus is a lot more on batteries. Talga started to call itself a ‘a vertically integrated producer of advanced battery anode materials and graphene additives’.There wasn’t much news about the graphene additives anymore. Does this mean that potential customers didn’t bite on the samples? Well, this is hard to say. Talga has a lot of partnerships but for most of them we don’t know what the deal is.

‍Pablo Alto rumours

‍Talga has created a research and product development team in Cambridge and presented some impressive test results. On social media managing director Mark Thompson was seen flying to Pablo Alto only days after releasing some spectacular result for their anodes. He commented his tweet saying ‘Pablo Alto is calling’.This was music to the ears of investors. However, there wasn’t too much news that followed in the months after.

‍Talga in a nutshell

• Unique Deposits called „freak of nature“ - highest grade graphite in the world
• Demonstrated ability to produce high quality graphene direct from raw ore
• Top mining jurisdiction - no or very limited mining licence risk
• Trial mining up and running - already selling samples of real products.
• Talgas facilities are very close to the largest battery gigafactory in Europe.
• Over 36 partnerships and/or NDS’s signed
• Own research and development team in cambridge working for several years now
• Massiv potential to scale up
• Undervalued relative to its peers based on the financial metrics at Vittangi alone.
• For strategic reasons to be in the EU may or maynot be a benefit
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Talnode and TalpheneTheir main graphite product from Talga is called Talnode. The main graphene product is called Talphene. Talga is targeting commercial production in 2023 and is currently engaged directly with a range of major battery manufacturers and automotive OEMs. Personally, I believe 2023 is too early for a commercial production. Today, Talga has 36 commercial engagements for Talnode underway including one to supply to Daimler. In-house research and developmentTalga has built an in-house R&D team of 35 mining, technology and product professionals. Some are ex-Toyota, Tata, Dyson and Cambridge University alumni who are leading the Company’s creation of ready-to-use products.

Slide from Talga's company presentation

Latest developmentsIn November 2019 Talga launched a commercial-scale trial of graphene coating on a cargo vessel.  The product is an on-site dispersible powder that adds graphene to paints and coatings. In December 2019 Talga announced a second commercial scale graphene coating on a ship. Since then we have not heard any news regarding this trial. In May 2020 Talga announced that it will supply coated anode products to lithium-ion battery giant Farasis for evaluation.\

Some time ago, a board member who happens to be a managing partner of Talgas 4th biggest shareholder, has resigned from the board. It’s worth noting but probably not worth speculating since there could be various reasons for that.

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‍The dance with the mine approvals

‍For mining companies, mine approvals are always a big deal and can make or break a venture. Stage 1 of Talgas flagship mine is already approved and Talga is working and producing there. Mine approvals for stage 2 were scheduled to occur between Q3 2019 and the end of 2020. In the latest company presentation it was moved to Q2 2021 and the first quarter in 2022. We have seen some of those delays over the last couple of years already.

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‍Are the numbers holding up?

‍Talga is moving in the right direction, however, maybe slower than they should be.

Some investors are wondering if the numbers maybe are not holding up to complete the definitive feasibility study. Only this week, the company announced it will release the DFS in the first quarter 2021. At the same time they announced in a press release some „Outstanding detailed feasibility study results“

‍Enough cash?

‍The total cash position as of 31. March 2020 is 6,6 mio. They will again need more capital since the cash-burn rate has gone up massively since they invested a lot into research and development. I am optimistic that they will manage to find capital but investors should be careful not to take it for granted. Ultimately, they will also need to finance the next expansion step for their mine. The company still has to design and engineer mining and refinery facilities before it can sell anodes on commercial scale.

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This will take years before potentially big revenue will be visible in the books. Edit: Talga just announced that raised AUD 10 mio and saw ‘significant investor interest’. Talga Managing Director Mark Thompson said: “This strategically sized placement will enable Talga to execute the next steps in building it’s Li-ion anode production facilities in Europe, while maintaining a tight capital structure to provide shareholders best leverage to project success. The raising also strengthens our position as we enter deeper finance discussions with multiple potential project partners.

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