Tirupati Graphite plc (LON:TGR) Executive Chairman Shishir Poddar caught up with DirectorsTalk for an exclusive interview to discuss the acquisition of Battery Minerals, the terms of the agreement, next steps and the outlook for the business.
Q1: Now, you announced that Tirupati Graphite entered into a binding agreement for the acquisition of the entire share capital of Suni Resources. Can you just talk us through the key points and what it means for the company?
A1: So, the projects that Suni Resources host, they are located in a jurisdiction or in the region where there is current graphite production. The graphite is well-known and the deposits are very large and that actually adds a huge amount of resources to our kitty.
The way it helps TG is that there is about more than 5 billion tonnes of additional graphite consumption expected to come by 2030, that’s four times of our global current consumption so the world needs good sources of graphite.
As you’re aware, we are one of the companies that have huge expertise in the space, we have a lot of history. So, we see this as the biggest opportunity we can work on for our shareholders and having good resources, at diversified locations, mitigating country risk, is what is important for our continuity. This is what this acquisition brings us.
Q2: What can you tell us about the terms of the agreement?
A2: Battery Minerals was working on these deposits I think for more than five years now, at both the two projects which are just about 50 kilometres away from each other, Battery has invested a huge amount of money in the ground in exploration and also the feasibility studies.
The Montepuez project was brought to them up at state and they started development of it, the Balama project is advanced PFS stage project so put together, these two projects are huge.
So basically, the key terms, the price, everybody’s aware it’s AU$12.5 million, about £6.6 million, this is for almost AU$11 million Aussies in equity of TG which is about 5 billion shares of TG which will be issued in two parts, the balance on cash or on completion. Otherwise, we get 100% transfer of the ownership of Suni Resources, which is the in-country company that holds the assets on completion and Battery becomes a long-term shareholder for us.
So, it’s a fairly straightforward deal, there’s a lock-in, uh, there are custody warranties, everything that you would expect in such an acquisition deal but very, very straightforward, and simple.
Q3: Now, you’re just mentioning the stage of development that the company’s at, at the moment. So what’s the next steps for the company?
A3: So, the Montepuez project has been in development and why is it a good match for us? Because Battery Minerals wasn’t new to graphite space and whilst they started developing it, it became difficult for them to take it forward for certain reasons which were not in their control. Here, as far as we are concerned, we get a project in something that we specialise in, a lot of work has been done, it is ready to get into production in short order.
So, the next steps accordingly for us, we complete the acquisition, we start building the first 50,000 tonne module on the ground in Montepuez and then follow up with the second 50,000 tonne module simultaneously. We take a dip on how large we can build this project to overs a decade to meet the growing demands based on market dynamics.
So, in a nutshell, we get the project into production in short time and then build from there, alongside our Madagascan projects so in Madagascar, we were building to 84,000 tonnes, this project will be built to even bigger, thanks to the EV boom.
Q4: How would you view the outlook for Tirupati Graphite?
A4: In a nutshell, what are we looking to be? We are in a space which contributes extensively to the creative economy, we are specialists in a critical material, must be one of the only companies in the listed space with the kind of background we have.
Our vision is to be the global leader in graphite and its products, that’s what we are looking to do, and we are going step by step. We’re doing it with very firm pace, we are building on every aspect where we need more strength and developing a project in a manner that is very, very well aligned with the industry itself, with the material itself.
We want to be the global leader of graphite and graphene in the world, that’s what we are building for.