Tirupati Graphite plc (LON:TGR, TGRHF.OTCQX), the specialist graphite and graphene company developing sustainable new age materials, has announced today its Interim Results for the six months ended 30 September 2021. The Company’s operations include primary graphite mining and processing in Madagascar, and a specialty graphite, graphene and advanced materials operation in India.
Growth & Development Highlights
· Commissioned 9,000 tonnes per annum (“tpa”) development at greenfield Vatomina Project, Madagascar
| ○ | First sales and shipment from Vatomina commenced in October 2021, commercial production expected to be declared in the current quarter |
| ○ | Additional 54,000 tpa in three modules at Vatomina to follow over a three-year period |
| ○ | Primary flake graphite production capacity from Madagascar currently 12,000 tpa, targeted to reach 84,000 tpa by end Calendar Year (“CY”) 2024 |
· Commenced development of second 18,000 tpa plant at Sahamamy, Madagascar
| ○ | Scheduled for completion in Q2 CY 2022 |
| ○ | Completion to Increase flake graphite capacity to 30,000 tpa during by end of Q2 CY 2022 |
| ○ | Redevelopment of 100-kilo watt Sahamamy hydropower plant on track to be commissioned in Q1 CY 2022 |
· Acquisition agreement executed to acquire Suni Resources SA, a Mozambique subsidiary of Battery Minerals subject to conditions precedent (refer RNS dated 17 August 2021)
| ○ | to add two world-class graphite deposits in Mozambique significantly increasing the Company’s JORC compliant mineral resource base by 152 million tonnes at 8.5% Total Graphitic Carbon (“TGC”): | |
| • | the construction initiated 100,000 tpa (2×50,000 tpa) Montepuez Graphite Project; and | |
| • | the advanced feasibility mining permitted 50,000 tpa Balama Central Graphite Project | |
| ○ | Provides the Company with medium and small flake graphite resources to complement Madagascan Jumbo and Large flake projects |
· Land secured for Patalganga, India, speciality graphite project expansion to 4,800 tpa capacity
| ○ | target commissioning by the end of Q2 CY 2022 |
| ○ | increased capacity and product range to continue creating markets in advance of larger speciality graphite projects coming on-stream |
· Development of first of two 15,000 tpa speciality graphite projects continued with:
| ○ | target completion by end of CY 2022 |
| ○ | upon completion increases total capacity to 19,800 tpa |
· Stage 1 of Tirupati Graphene and Mintech Research Centre (“TGMRC”) commissioned in July 2021 with
| ○ | capability to manufacture Graphene products in kilogram per day scale |
| ○ | capability to manufacture Aluminium Graphene Composite in kilograms scale for bulk sample supply to application developers for tests and product trials |
· Established high end ESG credentials by release of inaugural Sustainability Report complying with GRI standards in October 2021 covering:
| ○ | descriptions of green applications of graphite and graphene and green technologies and processes developed by the Company |
| ○ | Company’s approach to ESG and adoption reporting to GRI standards and UNSD goals |
| ○ | Company’s environmental activities including 38,000 tons of waste reduction, >18,500 trees planted and other activities supporting the Company’s plans to achieve net zero emissions and zero waste |
| ○ | details about the Company’s “Shakuntalam” programmes which includes social activities, employment generation and health and safety initiatives undertaken |
| ○ | the Company’s governance credentials and statements as per QCA standards. |
Operational and Financial Highlights
| • | Completed an oversubscribed placing at a price of £0.90 per ordinary share raise gross proceeds of £10 million |
| • | Strong balance sheet with cash in hand of £6.41 million at period end, insignificant current liabilities and significant investments already made in projects currently under development |
| • | The Company’s only debt is the pre-IPO issued convertible loan notes outstanding of £1.17 million which are convertible at the IPO price of £0.45 per share |
| • | Operations of the proof of concept 3,000 tpa Sahamamy flake graphite and 1,200 Patalganga expandable graphite projects continued despite limitations caused by the second and third phases of restrictions owing to the COVID-19 pandemic |
| • | Sahamamy project continued to demonstrate low cost high margin performance, key operating metrics in the table below: |
| Six Months Ending | 30 Sep 2021 | 30 Sep 2020 |
| Cost of Production | £255,193 | £212,685 |
| Quantity of Production (MT1) | 1,060 MT | 716 MT |
| Cost per MT of Production | £241/MT | £297/MT |
| Total Sales (MT) | 950 MT | 682 MT |
| Total Revenues | £560,058 | £419,402 |
| Achieved Basket Price (per MT) | US$819/£590 MT | US$778/ £615 MT |
| Gross Profit | £304,865 | £206,718 |
| Gross Margins (per MT) | £321/MT | £303/MT |
| Gross Margin on Sales (%) | 54% | 49% |
| Corporate and Administrative Costs | £1,141,387 | £574,935 |
| EBIDTA | £(836,522) | £(368,217) |
| Depreciation | £172,853 | £95,858 |
| Operating Profit/(Loss) | £(1,009,375) | £(464,075) |
| 1. MT = Metric Tonnes | ||
| As at | 30 Sep 2021 | 31 March 2021 |
| Selected Balance Sheet items | ||
| Cash and cash equivalents | £6,412,114 | £1,644,189 |
| Net Assets | £16,338,981 | £8,181,563 |
| • | Tirupati Speciality Graphite Private Limited (“TSG”), which houses the Company’s specialty graphite, graphene and advanced materials operation in India, recorded total revenues of c.£1.3 million during the period. Consolidation of TSG’s financials shall occur following the completion of acquisition, which is pending final regulatory approvals in India |
Outlook
| • | Graphite remains designated as a critical raw material by US and EU, being a key contributor to the green energy transition and electrification of mobility. |
| • | The global flake graphite market is forecast to grow multiple times over the decade, by the likes of UBS, World Bank, Roskill, Benchmark Minerals owing to energy transition and other green applications. |
| • | We believe our capacity build timing aligns with the markets. |
| • | We expect our flake graphite production and sales to exceed 4,000 tons in H2 of the current financial year to 31 March 2022. This is expected to increase to around 20,000 tons for the year to March 2023 and continuing to rise from then. |
| • | We remain conservative on capacity utilisation given the global challenges for movement of men and materials. |
| • | In addition to the primary flake graphite production, we also expect the speciality graphite projects to evolve from its current 1,200 tpa operations to exceed 5,000 tpa for the year to March 2023 and rising to 15,000 tpa from the following year. |
| • | We expect commercialisation of at least one of the many bulk graphene applications we are working on and remain prepared to install additional capacities as markets are developed. |
Shishir Poddar, Executive Chairman of Tirupati Graphite, said:
“We have continued the strong progress made since our IPO in December last year investing in and establishing new capacities for increased production from our low cost, high margin flake graphite operations in Madagascar, furthering the proof of concept established with the 3,000 tpa upstream operations and 1,200 tpa expandable graphite operations established prior to IPO. We have also continued to develop our sustainable new age materials making a mark in the world of advanced materials. With two projects having been commissioned in the period under review and a further three under investment and development, we will be adding significant production capacities across our upstream and downstream businesses from the next financial year onwards, which will be a game changing transformation for us becoming a globally significant supplier of primary flake graphite and speciality graphite.
“The significance of our pending acquisition of the Mozambique graphite projects shouldn’t be overlooked. The higher grade resource with small and medium flake sizes are extensively used including in the production of spherical graphite for battery production. This complements in many ways with the predominantly large and jumbo flakes from our Madagascar graphite projects and strategically positions us to serve all growth markets for flake graphite and moving far beyond the medium term development plan.
“Graphite’s importance in helping the world to meet net zero targets is increasingly recognised and demand is expected to increase exponentially in the coming years. We are leveraging the expertise built over generations to establish Tirupati as a world leader across the entire graphite value chain and in the past six months we have extensively strengthened our leadership positioning.
“Graphene and advanced materials using green technologies are the feather in our cap. Our understanding and belief that our green technologies for manufacturing graphene and advanced materials are not only unique but application friendly was strengthened during the period and we expect the hard work to bear fruits in the not so distant future.”
