The Talga Group Ltd (ASX: TLG) share price opened 6% higher this morning after the company released its Vittangi Anode Project’s detailed feasibility study (DFS).
At the time of writing, shares in Talga have fallen to $1.34 – still 1.13% higher than their previous closing price.
Talga is a technology minerals company with a focus on graphite, as well as interests in cobalt, copper, and gold. Its proposed Vittangi Project is based in northern Sweden and will produce green graphite anode.
Let’s take a closer look at the Vittangi Project’s DFS.
Vittangi Project set to rake in US$5.35 billion
The Vittangi Project’s DFS found it can produce 19,500 tonnes of Talga’s flagship green graphite anode product, Talnode-C, annually.
The anodes will be made using the 100,000 tonnes of graphite Vittangi will produce annually over its mine life – which the DFS has extended to 24 years.
Talnode-C has been found to be of high enough quality to be used in lithium-ion batteries used to power electric vehicles.
Using the Vittangi Project’s vertically integrated mine-to-anode operation, Talnode-C will be able to be sold straight to Talga’s consumers.
The DFS predicted the project will bring in around US$5.35 billion of revenue over its life span. The study also found the project’s production cost is likely to be US$2,363 per tonne of Talnode-C.
Therefore, Talga expects to receive net profits before tax of around $3.48 billion over the life of the Vittangi Project.
However, the project’s capital expenditure estimate has increased from the amount predicted in its pre-feasibility study.
This is due to US$153 million worth of extra equipment needed to satisfy the requirements of Talga’s automotive battery customers. Additionally, the company will spend an extra US$72 million to take advantage of previously identified growth opportunities.
Talga will now use the DFS to help secure financing and development partners, complete customer agreements, and begin construction of the project.
Commentary from management
Talga’s managing director Mark Thompson said:
We are excited to deliver the Vittangi Anode Project DFS to the market and to our partners…
Talga’s European-based natural green graphite anode operation is well timed to meet the unprecedented increased battery demand driven by the global megatrend towards electrification and decarbonisation. We are confident that this initial stage of operation will be a stepping stone to Talga’s larger role in the global battery and EV supply chain.
Talga share price snapshot
This year hasn’t been a good one for the Talga share price. It’s currently 27% lower than it was at the start of the year. However, it has gained 124% since this time last year.
The company has a market capitalisation of around $403 million, with approximately 303 million shares outstanding.