Q1 FY24 Update
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", "may", "will", "should", "could" or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Company and the Board. By their nature, 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
· 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."
For further information, please visit https://www.tirupatigraphite.co.uk/ or contact:
Tirupati Graphite Plc
Puruvi Poddar - Chief of Corporate & Business Development
+44 (0) 20 39849894
Optiva Securities Limited (Broker)
Ben Maitland - Corporate Finance
Robert Emmet - Corporate Broking
+44 (0) 20 3034 2707
+44 (0) 20 3981 4173
FTI Consulting (Financial PR)
Ben Brewerton / Nick Hennis / Lucy Wigney
+44 (0) 20 3727 1000
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.