TIDMTGR
RNS Number : 7132P
Tirupati Graphite PLC
22 June 2022
22 June 2022
Tirupati Graphite plc ('Tirupati', 'TG' or the 'Company')
Operational Update
Tirupati Graphite plc (TGR.L, TGRHF.OTCQX), the specialist
graphite and graphene company developing sustainable new age
materials, is pleased to provide an update covering progress across
its primary flake graphite operations.
Primary Flake Graphite operations
Primary flake graphite operations at the Sahamamy and Vatomina
projects in Madagascar continued despite unusually challenging
weather conditions, which have included six cyclones during the
past six month period.
Key Operating results
-- In Q4 FY 22 (January to March 2022), the Company recorded its
highest quarterly shipment and sales of 1,137 metric tonnes (MT) at
its highest average realisation of US$866 per MT.
-- During FY 22 (covering the period April 2021 to March 2022),
total production was 2,996 MT (FY 21 1,718 MT) and sales were 2662
MT (FY 21 1,857 MT).
-- Vatomina operations, post start-up, were stabilised by end of
May 2022 following debottlenecking and improving preparedness for
weather conditions.
-- Head grade at Vatomina currently remains at approximately 3%
as against project target of 4-4.5%.
-- TG's approach to achieving higher grade deposits will be
progressed over the next 2-3 months with rains having receded,
targeting increased average head grade from October 2022.
-- Installation of the new column flotation system at Vatomina
has been completed. Trials and integration with the operations are
scheduled in this month with an expert team being flown in from
TSG.
-- Over the rest of 2022, TG's efforts will be directed to
progressively increase Vatomina's production to rated capacity.
Sahamamy hydro power and 18,000 tpa facilities development
-- Construction of the Sahamamy 18,000 tpa plant has continued
but completion has been delayed by three months due to the
difficult weather conditions and commissioning is now scheduled to
start at the end of September 2022.
-- Commissioning of the 100Kw hydropower plant at Sahamamy is on
schedule with first power generation expected in July 2022.
Exploration activities
-- New discoveries continue to be made in both the Vatomina and
Sahamamy projects, as exploration activities are undertaken
concurrent with development.
-- Drilling activities continue to delineate new discoveries and
enhance confidence in the Mineral Resource Estimates from the 2018
Competent Person's Report.
-- A second diamond core drilling rig purchased by the Company
is now operational in the Sahamamy project.
-- With expanded target areas the ongoing exploration phase
under the supervision of SRK Consulting that will be continued
through the rest of 2022, an updated mineral resource statement for
the two projects is expected to be released by SRK.
Infrastructure developments
-- The acquisition of additional land surface rights at Vatomina
commenced in the current quarter by in-country expert advisors,
with the purpose of enhancing the land bank available at the
project. This covers areas of newly discovered deposits which are
likely to enhance the settled surface rights and thus improve the
prospects for the medium-term development plan.
-- Given the challenging weather conditions, the Company intends
to convert all its primary internal and connecting road network, c.
50 kms, to metalled concrete or black top roads, studies for which
have been initiated.
-- An area grader and bull dozers have been added to the fleet
of mining and earthmoving equipment to enhance and maintain the
road network.
-- To meet the expectations of advanced analytics by our
customers and for complete control over both the mined ore and
finished product, the analytical lab facilities have been enhanced
with installation of microscopes and X-ray fluorescence
spectroscopy (XRF).
Cost inflation
-- Along with most of the sector, Tirupati has experienced cost
inflation - particularly for shipping and logistics costs for the
movement of equipment, plant and machinery and other inputs to and
finished products from its projects.
-- The increased cost of steel, petroleum products and overall
inflation have contributed to increase in investments and operating
costs.
-- The Company is mitigating these increased costs by shifting
sales to Free-On-Board (FOB) incoterms or passing the incremental
costs to our buyers through increased selling prices.
Market developments
-- Given the expectation of continued growth in graphite demand,
particularly given the continued growth of Electric Vehicle
production, and feedback from current and prospective customers,
the Company remains confident of its ability to sell the increased
production from the primary operations as it grows under the
medium-term development plan.
Next steps
-- We continue to remain focussed on developing the Madagascar
primary flake graphite operations to achieve the globally
significant milestone of 30,000 tons rated capacity up from the
current 12,000 tpa capacity and achieve expected positive bottom
line from the current financial year being 1 April 2022 to 31 March
2023.
Shishir Poddar, Chairman & CEO of Tirupati Graphite,
said:
"Primary flake production and expansion of our production
facilities has been impacted by the sustained period of unusually
bad weather in Madagascar over the past six months; however, we
continue to make excellent progress and to increase our production
capacity to the targeted 84,000 tpa level from our Madagascan
projects.
"The market for graphite continues to expand rapidly driven by
the energy transition. This is a timely opportunity for us to grow
and we are doing so, whilst having to mitigate external
headwinds."
"The next six months will be crucial for us as we strengthen our
foundations, increase our capacity to 30,000 tpa and position the
Company to achieve better capacity utilisation which will mitigate
future headwinds.
"With the travel restrictions having come to an end, we now have
better mobility for our leadership team. With Vatomina stabilising,
and the additional capacity of 18,000 tpa coming on stream later
this year, we are focussed on delivering a positive bottom line
starting the current financial year. Achieving this milestone we
see as transformational in our development journey."
ENDS
For further information, please visit
https://www.tirupatigraphite.co.uk/ or contact:
Tirupati Graphite Plc
Puruvi Poddar - Chief of Corporate & Business admin@tirupatigraphite.co.uk
Development +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 / Kelly Smith tirupati@fticonsulting.com
About Tirupati Graphite Primary Flake Graphite Operations
Tirupati Graphite Plc owns and operates two primary flake
graphite projects in Madagascar namely the Sahamamy and Vatomina
projects spread over c. 33 square kilometers mining permits. It has
a current nameplate capacity of 12,000 tpa, in the process of
setting up additional 18,000 tpa and expanding further to 84,000
tpa capacity targeted by end of 2024. Its products are shipped
across Asian, European and American markets from Madagascar with
flake size distribution tilted towards the premium larger sizes.
The Company places a special emphasis on "green" applications,
including renewable energy and energy efficiency, energy storage
and thermal management and is committed to ensuring its operations
are sustainable as well. It yields construction sand as a by
product which is currently used at its projects for expansion
activities and infrastructure strengthening.
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END
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