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Why is the share price of graphite miner Talga Resources soaring?

The Talga Resources (ASX: TLG) share price is 16% higher today to 48 cents despite the “advanced” battery materials company releasing no specific news to the market.

Talga is aiming to become a global leader in bulk graphene or graphite supply and it has two wholly owned subsidiaries under the Talga brand that operate a graphite mine in Sweden.

However, the company sees itself as more than a graphite miner as it “works directly on product development with targeted industrial partners to develop the graphene additives that meet their needs”.

It also claims to have developed, among other products, a “graphene silicon battery anode” product that show “50% higher density over commercial graphite”.

Looking at the numbers, Talga posted revenue of just $6,000 for the six months ending December 31 2018 and an operating cash loss of $5.3 million. As such it’s essentially at the “pre-revenue” stage and as at December 31 2018 had $13.8 million cash on hand to fund its development activities.

According to its latest Appendix 3B filing it has 212.2 million shares on issue to give it a market value around $102 million based on a 48 cents share price.

Given its lack of revenue it falls in the speculative bucket.

Other graphite related businesses on the ASX include Argosy Minerals Limited (ASX: AGY), First Graphene Ltd (ASX: FGR) and Buxton Resources Limited (ASX: BUX).

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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