REG - Tirupati Graphite - Q1 FY24 Update

Tirupati GraphiteAnnouncement

08/08/2023 07:00

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RNS Number : 5529I  Tirupati Graphite PLC  08 August 2023

This announcement includes statements that are, or may be deemed to be,
"forward-looking statements". In some cases, these forward-looking statements
can be identified by the use of forward-looking terminology, including the
terms "targets", "believes", "estimates", "anticipates", "expects", "intends",
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throughout this announcement and include statements regarding the intentions,
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forward-looking statements involve risks and uncertainties because they relate
to events and depend on circumstances that may or may not occur in the future.
Forward-looking statements are not guarantees of future performance. The
Company's actual performance and results of operations may differ from the
forward-looking statements contained in this announcement.

 

8 August 2023

Tirupati Graphite plc

('Tirupati', 'TG' or the 'Company')

 

Q1 FY24 Operational and Business Development Update

 

Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist graphite producer
and a supplier of critical minerals for the green transition economy, is
pleased to provide an update on operations and business development for its
flake graphite projects in Madagascar since the start of this financial year
on 1 April 2023 ('FY24') and production figures for Q1FY24 (period ended 30
June 2023).

 

Operations in Madagascar

·    Production ramp-up continues following the completion of the Vatomina
and Sahamamy projects, combined capacity of 30,000 tons per annum

o  development included strengthening of infrastructure to manage local
weather conditions

·    Production for Q1 FY24 was 2,371 tons (Q1 FY23: 822 tons), an
increase of 188%

·    Sales for Q1 FY24 were 2,772 tons (Q1 FY23: 803 tons), an increase of
245%

·    The Company remains focussed on reaching monthly production and sales
minimum target of 2,000 tons and expects to achieve this important milestone
in Q3 FY24 having focused this year on:

o  Increasing market reach for its products and aligning operations to meet
stringent specifications from clients;

o  strengthening both local and expat management teams;

o  conducting extensive training for the streamlined processes developed over
the previous year;

o  strengthening production processes including water resource management;

o  optimising power generation and fuel supply arrangements; and

o  improving overall efficiencies in both mining and processing operations to
minimise operations downtime and improve head grade in Vatomina

 

Market Development

·    Graphite demand growth continues on the back of the energy transition
and is rapidly absorbing China's historical over-capacity

·    Established graphite buyers are engaging with Tirupati to diversify
supply sources

·    The Company has significantly benefitted from its leadership team's
decades of experience in and reputation in the sector, helping to secure a
growing order book and sales

·    As a result, Tirupati is now holding and executing annual orders with
average monthly volumes of c.1200 tons, in addition to various short-term and
spot orders it receives on a regular basis

·    The order book aligns with the Company's market development strategy
and production estimates allowing optimisation of working capital

·    Long-term market demand forecasts remain buoyant and are expected to
result in supply shortfalls in the medium-term

 

Cashflow and Liquidity management

·    Tirupati is managing its operations within the available resources
while ramping up sales and production, and expects to reach c.50% capacity
utilisation in the current quarter and c.75% in Q3 FY24

·    The Company is tightly managing cash resources following a period of
investment: project development, building infrastructure, acquiring Suni
Resources and building inventory for the expanded operations

·    Given the strong sales and revenue performance during FY24 to date,
we expect to exceed the production and sales revenue achieved in the full year
FY23 (FY23 £2.89m) before the end of August

·    In the meantime, the Company continues to engage in securing
non-dilutive working capital arrangements to improve cash resources on the
back of its strongly improving performance and order book

 

Shishir Poddar, Executive Chairman, said:

 

"We continue to evolve the Company's business to align with our aim to be a
leading player in meeting the growing global needs of flake graphite, a
critical mineral supply of which is identified as one of the key risks to
meeting energy transition targets. Adoption of electric vehicles is growing
globally with the world's largest economies pushing hard for renewable energy
backed transformation of mobility. While at the current time there is no
supply-deficiency of flake graphite, it is clear from forecasts that supply
will increasingly fail to keep up with the growing demand.

 

"We chose the tough but prudent path of refraining from a dilutive equity
raise in the current subdued capital markets, managing our operations and
growth within our available resources. With the establishment of consistent
and growing production we are progressing   to our next target of hitting a
positive bottom line at corporate level in the foreseeable future.

 

"We will continue to update our shareholders on further developments and we
are confident about both our short and long-term outlook."

 

 

ENDS

 

For further information, please visit https://www.tirupatigraphite.co.uk/
(https://www.tirupatigraphite.co.uk/) or contact:

 

 Tirupati Graphite Plc

 Puruvi Poddar - Chief of Corporate & Business Development        admin@tirupatigraphite.co.uk (mailto:admin@tirupatigraphite.co.uk)

                                                                  +44 (0) 20 39849894
 Optiva Securities Limited (Broker)

 Ben Maitland - Corporate Finance                                 +44 (0) 20 3034 2707

 Robert Emmet - Corporate Broking                                 +44 (0) 20 3981 4173

 FTI Consulting (Financial PR)                                    +44 (0) 20 3727 1000

 Ben Brewerton / Nick Hennis / Lucy Wigney                        tirupati@fticonsulting.com

 

About Tirupati Graphite

 

Tirupati Graphite Plc is a specialist flake graphite company and places a
special emphasis on "green" applications of flake graphite, including
renewable energy, and energy efficiency, energy storage and thermal management
and is committed to ensuring its operations are sustainable as well.

 

The Company's operations include primary mining and processing in Madagascar,
where the Company operates two key projects, Sahamamy and Vatomina. With the
start of commercial production of its latest 18,000 tpa plant at Sahamamy in
March 2023, it now has an installed capacity of 30,000 tpa high-quality flake
graphite concentrate with up to 97% purity in Madagascar, planned to increase
to 84,000 tpa as per the Company's modular medium-term development plan.

 

On 1 April 2023 the Company completed the acquisition of Suni Resources SA,
Mozambique, whose two main assets are (i) the Montepuez Project which holds
the mining licence over an area of 3,667 hectares with JORC 2012 defined
reserves & resources of almost 120 million tonnes; plus (ii) the Balama
Central Project, which has a mining license over 1,543 hectares with JORC 2012
defined mineral reserves and resources of 33 million tonnes. Both projects
have licenses permitting build out to an annual production of 100,000 and
58,000 tons of flake graphite respectively.

 

TG believes that the addition of these projects provides the Company with
sufficient resources to achieve its ambition of satisfying 8% of the estimated
global flake graphite demand - of around 5 million tons per annum - by 2030.

 

 

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