Magnis Energy charged up for battery factory sign-off

Lithium battery manufacturer Magnis Energy says it expects money to be ‘flowing through the door’ before the end of the year as its hi-tech factory in New York gears up for production.

Magnis Energy chairman Frank Poullas. Picture: Britta Campion

Magnis Energy says its flagship battery factory is stockpiling cells pending technical certification, but assured investors “money will be flowing through the door” before the end of the year.

Magnis chairman Frank Poullas, speaking at the company’s annual meeting, told investors the Imperium3 factory in New York had launched production of cells but sales were yet to be made.

Mr Poullas said some Magnis customers had signed waivers “on the qualification side”, but technical sign off of the batteries manufactured at Imperium 3 would be secured in two to three weeks.

“We would expect some time in December as soon as we get certification, some time in December, we will see revenue coming in,” he said. “There’s no shortage of customers right now.”

Magnis’ hi-tech battery plant, in upstate New York, was originally scheduled to open in 2019.

The plant is owned and run by Imperium 3 New York, which is 60 per cent owned by Magnis.

The technology used to underpin the production of battery cells at the site is supplied by Charge CCCV, which is 10 per cent owned by Magnis. Magnis has the rights to exclusively use its intellectual property in the US.

Mr Poullas told media in November 2021 that production at the factory would start “within weeks” but delays have marred construction and production. “We will be producing lithium-ion battery cells … in a place called Endicott, literally starting commercial production within weeks,” he said at the time.

In January, Mr Poullas told the ASX Investor channel that “within six months there will be revenues coming through”.

In June, Magnis told investors that construction of the plant had been hit by delays, with production now expected to commence “within the next 5 weeks from today and begin ramping up over the balance of the year”.

Production kicked off at the factory in August, with plans to ramp up from several thousand cells per day to almost 15,000.

Paul Stratton, a former Imperium 3 executive is suing the company and Mr Poullas claiming he was sacked after raising issues about corporate governance at the battery company.

Magnis had touted plans to list Imperium 3 in August 2021 after ploughing $17.6m into the battery business. This was after Magnis secured $20m from John Hancock-backed Lind Partners and the SBC Global Investment Fund.

Imperium 3 signed a deal in April this year to secure a $US100m ($148m) loan from Atlas Credit Partners secured by the intellectual property that Charge CCCV has provided.

Magnis has been queried about its battery factory claims, being forced by the market operator to withdraw claims it was worth as much as $10bn.

In October 2021, in response to questions from the ASX, Magnis said it would deliver $80m in revenues in 2022, growing to $360m in 2023. At the time, it said Imperium 3 was expecting annual revenues of $1.8bn by 2027.

Mr Poullas told investors on Thursday that Magnis had no issues securing supplies for its batteries and the strong demand for battery anode material supported a proposal to build a production facility in the US.

In October, Magnis announced it was exploring plans to build an anode production facility, which would be supplied by high-grade graphite feedstock from the company’s graphite mine at Nachu in Tanzania.

However, Magnis has been struggling to break ground at its Nachu project, which the company noted in September would cost US$324m to get operational.

Magnis has signed an offtake agreement with commodities broker Traxys, but there was no upfront payment and Magnis is still seeking a financial partner to back production at the mine.

Magnis director Peter Tsegas, who heads up operations in Tanzania, was re-elected to the company’s board on Thursday