Altech Batteries (ASX: ATC) Research Update

Highlights:

• Arrowhead is updating its coverage on Altech Batteries Limited (Altech or ATC) with a fair value of AUD 0.32 per share in the low-bracket scenario and AUD 0.86 per share in the high-bracket scenario (share price on November 22, 2023: AUD 0.074), based on NPV methodology.
• Altech Batteries Limited is an Australian-based company specializing in battery material technology. It is actively engaged in two key projects – the CERENERGY® Batteries Project and Silumina AnodesTM Battery Materials Project, showcasing disruptive and innovative technologies in the battery industry.
• Altech has updated the Definitive Feasibility Study (DFS) output capacity of the CERENERGY® project from 100 MWh to 120 MWh per annum after the final stages of facility design. This enhancement of 20% in the plant output is without incurring any additional capital costs.
• In addition, the company has recently updated the design of the 60 KWh battery pack, to a sleek stainless-steel exterior (instead of previous blue paint), providing enhanced durability against extreme temperature variations while maintaining a clean appearance. The DFS of the project is in the final stages and is expected to be completed by Q4 2023.
• Altech has also commenced the permitting and licensing application process for the CERENERGY® battery project in Schwarze Pumpe, Saxony, Germany through its Joint Venture German subsidiary Altech Business GmBH (ABG). Further, Altech in collaboration with engineering subcontractor LEADEC has submitted an application to the authorities for a permit and license for the proposed construction and operation of a 100 MWh CERENERGY® battery plant.
• Altech has expanded Silumina Anodes’ output capacity eight-fold, increasing it from 15 GWh to 120 GWh, without any significant change in the plant and equipment costs. Further, the company will now focus on producing alumina-coated metallurgical silicon products at a rate of 8,000 tpa, instead of the initially proposed production of 10,000 tpa of Silumina Anodes product. Additionally, the company is in talks with Ferroglobe, its European silicon partner, to boost the supply of metallurgical silicon for the enhanced Silumina Anodes project.
• In September 2023, Altech released its first Environment Social and Governance (ESG) report, encompassing four key categories – Principles of Governance, People, Planet and Prosperity. These categories are reported through 21 core metrics tracked by Altech and are reviewed annually and quarterly.
• In August 2023, Altech completed the final design phase for the front-end calciners and corresponding plant layout Silunima Anodes pilot plant project. Further, it has executed non-disclosure agreements (NDAs) with prominent automotive conglomerates in Europe and the US, who are willing to acquire commercial samples for testing and qualification processes.
• Further, the company successfully raised a capital funding of AUD 15.8 mn via entitlement offer and placement to further develop and commercialise both its projects.
• Altech has not paid any dividends for FY 2022 nor has it recommended any dividend for FY 2023.