Replies to post #1037 on Texas Mineral Resources Corp (TMRC)

[MWM]

$TMRC A little churn and then we head higher imo!

[aore]

We think this announcement helps validate our thesis regarding the potential value of Roundtop, and by extension,
our associated price target of Texas Mineral Resources Corp. By the way, it also validates the same vision
(valuation) that TMRC management has articulated as well.
Recall USA Rare Earth is TMRC’s investor/partner at Roundtop. In short, USA Rare Earth put up $13 million
and TMRC put up (ultimately) 80% of Roundtop. Doing some simple math, if the proposed IPO happens at a $1
billion valuation for USA Rare Earth, that means they are valuing 80% of Roundtop at $1 billion, which means
TMRC’s 20% of Roundtop would be valued at $250 million. If we adjust for outstanding dilutive instruments,
that will peg the value of TMRC’s shares (relative to the proposed IPO valuation) at somewhere between $3.50
and $4.00. Moreover, presumably, if people are buying a USA Rare Earth IPO at a $1 billion valuation, it is
because they expect it to be worth more than that in the future, which suggests that perhaps TMRC could be worth
more than that comparative valuation implies as well. To translate, we think our price target is reasonable.

[aore]

USA Rare Earth LLC has hired bankers to explore going public in a deal that could value the
strategic minerals company at more than $1 billion, according to a source familiar with the
matter and documents seen by Reuters.
The company, which is developing the Round Top rare earths deposit in Texas, is considering
an initial public offering (IPO) or going public via a special purpose acquisition company
(SPAC), though it does not plan to issue debt, according to the source and documents.
Any offering is expected to raise between $300 million to $500 million, which would be used in
part to finance the Texas mine and processing facility. The company hopes to have it operating
by 2023.
Investors are growing more interested in exposure to rare earths, 17 minerals used to build
weapons and electronics. China is the world’s largest producer and has threatened to stop
exporting these minerals to the United States.
Goldman Sachs Group Inc and BMO are serving as advisors to USA Rare Earths. Company
representatives did not immediately respond to a request for comment.
Goldman also is handling the company’s negotiations with potential customers.
Reviving domestic rare earths production has become a priority in Washington as relations with
China have grown more frayed, and with U.S. lawmakers leery of relying on a rival for critical
defense components.
U.S. President Joe Biden has repeatedly said he wants to boost manufacturing, a goal that likely
would require more domestically-produced minerals. He plans to issue an executive order this
month mandating a review of critical U.S. supply chains, sources separately told Reuters on
Tuesday.
USA Rare Earth rival MP Materials Corp, which controls California’s Mountain Pass mine,
went public last year in a SPAC deal worth nearly $1.5 billion. Its stock price has more than
doubled since its November debut.

[aore]

[aore]

SK Innovation banned from the US for 10 Years following LG lawsuit
By Daniel Harrison13 February 2021
•
•
•
•
•
1 Comment


• Save article
The US International Trade Commission has imposed a 10-year ban on SK Innovation for the importation, domestic production, and sale of electric vehicle batteries within the US because of intellectual property theft from rival LG Energy Solution. It is a tough sentence, but perhaps unsurprising given the context of the global push to electrification.

SK Innovation’s battery plants in Georgia (rendering)
There have been suggestions of a potential voluntary settlement between the two parties, presumably a financial sum for damages and legal costs which could run into the billions. However, quashing the US International Trade Commission (ITC) ruling would then require LG Energy Solution (formerly LG Chem) to withdraw its original appeal.
The battle between these two South Korean heavyweights was highly likely. LG Energy Solution is currently the number-one global player in EV batteries with 81 gigawatt hours (GWh) of global yearly capacity, with SK Innovation (SKI) the number five player at 42 GWh (though its actual output is lower).
And therefore, in the battery arms race to improve battery capacity, vehicle range, performance and safety (fires are increasingly an issue) and reducing cost and charging times, battery cell manufacturers are fighting for incremental gains to outperform their competitors.
What this case actually demonstrates is that EV batteries, contrary to popular belief, are far from commoditised. There are notable difference in the price/performance ratio from different suppliers.
Marginal improvements of just a few percent are all it takes for an OEM to select one particular battery manufacturer over another. And the battery supply agreement that results from offering the best price/performance ratio and plant investment (be it as a joint-venture or a collaboration) can run into the billions of dollars, so that small competitive edge is crucial as there are huge amounts of capital at stake.
How will it affect SK Innovation?
It’s as much the reputational damage as the actual loss of business. OEMs may be reluctant to sign new supply agreements with SK Innovation for fear of a similar scenario occurring. On the business side, the two planned SK Innovation plants in Georgia, US, were intended to produce over 21 GWh worth of batteries combined by 2022, representing a substantial expansion of SKI’s global production capacity.
The ITC ruled that SK innovation can continue to supply the upcoming Ford F-150 EV for four more years and the VW ID.4 for two years to allow these OEMs time to find alternative battery suppliers if LG and SKI cannot come to a settlement. Given both models are scheduled to enter production in 2022 and the ban includes imports as well as local production, this leaves Volkswagen and Ford with a serious headache.
Because battery production is still a relatively new industry in constant state of flux, the trend among OEMs is to strategically move away from a single-sourcing model for EV batteries towards multi-sourcing batteries to mitigate supply chain risks. VW already has supply agreements in the rest of the world with LG Chem, Samsung SDI and SKI for the EU and CATL for China.
Given president Biden’s green plans and the likely acceleration in battery localisation in the US thanks to higher demand as well as USMCA rules of origin requirements, there are plenty of competitors who would be only too glad to replace SK innovation as battery suppliers for Ford and VW. However, it’s not simply a case of these other cell suppliers suddenly ramping up their capacity to fill the void left by SK Innovation. Globally, there are already battery supply chain shortages, disruption and volatility as EV volumes ramp up while batteries remain in short supply, leading to rising waiting times for EVs and potentially holding back electrification.
And what of SK Innovation’s plant? well, they won’t be allowed to use it four years from now. So it will likely be sold, leased or licensed to another battery manufacturer.
In the global push to electrification over the coming decade, the battery supply chain is arguably the number one issue, and the technological battle by companies and the political battle by countries to capture this rapidly emerging strategic technology is really hotting up.
Watch on demand Daniel Harrison’s analysis and forecast of North American EV battery capacity and how it will develop from the Automotive Logistics and Supply Chain North America Live conference.

[aore]

https://www.greencarcongress.com/2021/02/20210203-roskill.html

[aore]

First Aussie-focused SPAC hunts the ‘next Atlassian’

Paul SmithTechnology editor
Feb 15, 2021 – 12.00am
Save
Share
Former Rich Lister and serial tech entrepreneur Patrick Grove is on the hunt for an Australian or Asian tech company to buy and take public on the New York Stock Exchange, after an initial public offering that looks set to raise more than $US300 million ($390 million) for a special purpose acquisition company in a heavily oversubscribed funding roadshow.
SPACs are an increasingly common investment vehicle, also sometimes referred to as “blank cheque companies”, which exist as a publicly listed entity with the sole aim of acquiring a private company to list in the shell.

Patrick Grove says his new SPAC will give an entrepreneur a fast track to a successful IPO, without the hassles. Scott Woodward
Mr Grove and his Catcha Group co-founder Luke Elliott are behind the new SPAC, which listed on the NYSE on Friday US time under the name Catcha Investment Corp. He told The Australian Financial Review the capital raising was 10 times oversubscribed, with investors excited by the fact it was the first SPAC to specifically mention Australia as a core focus.
“We are looking for the next Atlassian, and will be looking for companies worth north of $US1 billion,” Mr Grove said.
“I’m personally really excited to find a great entrepreneur and company, help them get to the next level and share everything we know about how to build great companies fast in the public markets area.”


Advertisement
SPACs have exploded in popularity in the past year, with research from Goldman Sachs showing they raised $US70 billion from investors in 2020, up fivefold from 2018. Goldman said 36 SPACs that had originally raised a total of $US10 billion in equity completed deals that had a combined enterprise value of $US51 billion.
There have been some concerns that they encourage characteristics synonymous with market bubbles, as investors in the SPAC are essentially investing blind in a company that has not been named yet.

Catcha Investment Corp listed on the New York Stock Exchange on Friday in an IPO Mr Grove said would net it $US300 million. NYSE
Catcha Group is one of the longest standing internet-focused investment groups in south-east Asia, having been founded by Mr Grove and Mr Elliott in 1999. The group has made more than 50 investments globally and has taken five digital business from start-up to an IPO, including four on the ASX.
Catcha’s south-east Asia online property portal, iProperty Group, was its most successful listing, eventually being acquired by REA Group.
Mr Grove said there was now no target company in mind for acquisition by the SPAC, but that it intended to focus its search on a target with operations or prospective operations in the technology, digital media, financial technology or digital services sectors, which it refers to as the “new economy sectors”, across the Asia-Pacific region, in particular south-east Asia and Australia.
He said he liked the software as a service business model, and was also interested in consumer internet firms and online marketplaces. Despite the open-ended nature of investing in a SPAC, Mr Grove said investors on its roadshow had been keen to deal with them because of their entrepreneurial background and knowledge of a largely untapped Australia and south-east Asian tech scene.
As well as Mr Grove and Mr Elliot, former Goldman Sachs Asia TMT investment banker Kit Wong will be the chief financial officer of the SPAC, and it has an advisory board of leading venture capitalists in the region including David Gowdey, managing partner at Jungle Ventures; Helen Wong, partner at Qiming Venture Partners; Khailee Ng, managing partner at 500 Startups; MX Kuok, founder and managing partner at K3 Ventures; and Thomas Tsao, founder and managing partner at Gobi Partners.
Mr Grove said the main challenge in selecting the right company to acquire was identifying the right company founder or CEO. He said the prospect of being acquired by a SPAC should be an exciting one for the founder of a tech company.
“Rather than financiers or investors, we consider ourselves entrepreneurs first,” he said. “Having founded and taken multiple businesses public over the last two decades, we can empathise intimately with the experience and concerns of other entrepreneurs, especially those around the process of taking a company public.”

RELATED
Singapore steps up bid to become Asia Spacs hub

RELATED
Telstra Ventures wins big from Wall Street’s SPAC attack

RELATED
Here's everything investors need to know about SPACs
“To go public in the US takes six to nine months, but via a SPAC it takes two months. So for most entrepreneurs, the ability to save six months of their life and have certainty is a huge benefit as to why they would consider this.”
The rush to list in Australia’s technology scene is tempered somewhat by it being relatively awash with cash. Despite the COVID-19 pandemic, 2020 saw a record-breaking sum of more than $2 billion invested in local early-stage private businesses by venture capital funds.
However Mr Grove said the local VC sector would be delighted if more SPACs turned their attention to Australia in order to give them fresh exit options on their investments.
The Catcha IPO made 27,500,000 units available at a price of $US10 each, with JPMorgan Securities serving as sole book-running manager. JPMorgan has an option to purchase up to an additional 4,125,000 units to cover over-allotments, which would increase the final size of the offering to above the $US300 million mark. The offering is expected to close on Wednesday, February 17.

[aore]

China eyes rare earth export curbs for US defense sector -BBG citing Financial Times
3:31 PM · Feb 16, 2021·TweetDeck