By Thomas Kerr, CFA
OTCQX:TLGRF
READ THE FULL TLGRF RESEARCH REPORT
Talga Group Ltd (OTCQX:TLGRF) is an Australian based mining and battery technology company with primary operations located in Sweden. The company produces high-performance, sustainable, new-energy graphite materials using proprietary technologies. Currently, the company manufactures graphite anodes in a pilot plant in Luleå, Sweden, with the input primarily being derived from recycled black mass graphite and the company’s own mined graphite ore stockpile (27,000 tonnes).
The company’s current plan is to develop the Vittangi Project, which consists of a graphite mine and a manufacturing and refining plant that will produce coated graphite anode for direct sale to battery manufacturers. The Nunasvaara mine is located in northern Sweden, approximately 10 kilometers from the town of Vittangi. The company received a mining and environmental permit in 2024, and detailed planning is underway to create a Final Investment Decision (FID). Approximately 290 kilometers south of Vittangi near the city of Lulea, the company is planning to build a low-cost, sustainable graphite Li-ion battery anode production facility. The refinery will use high-grade natural graphite from Talga’s own deposits from the Nunasvaara mine.
Primary products to be manufactured are graphite Li-ion battery anode, which Talga has branded as Talnode®. These include Talnode®-C (made from Nunasvaara natural graphite), Talnode®-R (made from recycled graphite materials), and Talnode®-Si (made from a silicon/graphene composite). The end customer for these graphite anodes are battery cell makers for applications in robotics, defense, electric vehicles, consumer electronics, and energy storage systems.
The company has other graphite resources at Jalkunen, southwest of Pajala, and Raitajärvi, as well as copper and cobalt in Kiskama, northwest of Nunasvaara, all in the Norrbotten region of north Sweden.
The company’s shares are traded on the Australian Stock Exchange under the ticker TLG as well as the OTC Markets (OTCQX) under the ticker TLGRF. The current market capitalization is approximately $139 million. As of 9/30/25, the company had A$8.1 million in cash. We believe the company will have sufficient funding sources to execute on its long-term strategic growth plans.
Valuation
We believe that Talga Group is poised to produce rapid and high margin revenue growth over the next 5-10 years as the Vittangi project (both mine and plant) becomes fully operational. When the refinery reaches full capacity, the entire project could generate over A$200 million in high margin revenue. We believe the company will generate positive EBITDA and net profits in the 2028 fiscal year ending June 30, 2028.
Our primary valuation tool utilizes a Discounted Cash Flow process. Under the scenario described below, our DCF based valuation target is approximately US$1.71 per share. Our target price may be conservative as it utilizes a high discount rate of 15.0% due to the unpredictability of earnings, higher prevailing interest rates, and the timeline for reaching full scale commercialization.
We also utilize forward Price / Revenue multiples relative to peers as a backup methodology to create a target price for TLGRF stock. Separately, we also add an in situ analysis to create a range of values for the graphite mines.
We apply an 11.9x revenue multiple to FY 2028 revenues and discount back at a 15% annualized rate. This methodology provides a value of approximately US$1.03 for TLGRF stock.
Based on this range of values, we arrive at a near-term price target of US$1.50 per share. As the overall project development continues to progress throughout CY 2026 and CY 2027, there appears to be substantial upside above that target price.
Summary
We believe that Talga Group is poised to produce rapid and high margin revenue growth over the next 5-10 years as the Vittangi project (both mine and plant) becomes fully operational. When the refinery reaches full capacity, the entire project could generate over A$200 million in high margin revenue. The technology has mostly been proven as they are leveraging a working modular plant design and integrated engineering platform at the pilot EVA plant, which has been operational since 2022.
Talga is also positioned to capitalize on the growing supply of graphite waste from battery recyclers and the widening deficit in ex-China anode materials. The long-term strategy focuses on scaling multiple production sites across key regions such as the United States, Japan, and the EU to address geopolitical shifts away from Chinese anode supply. Through collaboration with local partners and governments, the company aims to re-shore critical graphite anode supply chains, deliver cleaner products, and enhance supply security.
The company’s current stock price does not likely reflect that potential level of profitable growth going forward when both the mine and large-scale refinery plant become operational.
We believe our multiple valuation methods support our DCF valuation and provide a target price of US$1.50 per share.
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