Magnis Energy Technologies drops Townsville megafactory, faces 4.8 quarters of funding left
ASX-listed battery play Magnis Energy Technologies has revealed no revenues in the last quarter, as its cash more than halved in the last six months.
Magnis Energy Technologies has just over a year’s funding left, after its flagship New York battery factory failed to deliver any sales and its proposed Townsville site was torpedoed by the local government council.
In a quarterly update released to the market on Friday, Magnis told investors it had only 4.8 quarters of funds left in the bank and had taken no steps to raise further funds to bankroll its operations.
Magnis said it was facing a $8.4m loss in the quarter and a total $19.4m loss for the year to date.
Net cash was down from $100.2m at the start of the year to $44.5m, with Magnis reporting nill revenues from customers for the period.
Magnis said it‘s Imperium 3 New York Battery Factory had failed to sell any batteries after delays in certifying its cells for transportation.
Magnis said sample cells were being assessed by customers and the firm would commence revenue recognition “once customers have finalised their assessment processes”.
“Once the independent certification has been completed, commercial quantities will be
shipped to customers,” Magnis said.
Magnis has sunk almost $US36.6m ($54.1m) into its iM3NY factory in recent years.
This is in addition to the $US100m loan taken out by iM3NY, which falls due in April 2024.
If iM3NY defaults on the loan it may lose the intellectual property used in the production of its battery cells.
Magnis has claimed iM3NY would deliver huge returns, with revenues topping $80m in 2022, climbing to $360m in 2023, before soaring to $1.8bn by 2027.
The energy company told investors in August 2021 it had secured a “binding contract with US government supplier” for $US74m in sales over four years taking its total commitments to nearly $1bn for iM3NY.
Magnis chair Frank Poullas has repeatedly promised investors there would be “money flowing through the door” as there were “no shortage of customers right now”.
The energy company had also repeatedly touted plans to build a battery gigafactory in the North Queensland city of Townsville, with partner Boston Global backed by ex-Macquarie executive Bill Moss.
Mr Moss’ group pulled their backing from the $3bn project in November 2021, with Magnis noting it had acquired his 33 per cent stake “for a nominal fee”.
This comes after Magnis bought Mr Moss’ stake in its New York project in March 2020 for $US350,000, plus a further $US150,000 if i3MNY “successfully secures project finance or a joint venture agreement”.
Magnis told investors Townsville Council had revoked its original allocation of land in the Lansdown development, offering iM3TSV “the opportunity to reapply for an alternate site”.
“At this point int (sic) time, Magnis has decided not to pursue an alternate site at the Lansdown development, as there are no sites that meet our requirements,” the company said.
“Magnis are instead considering other options for the location of its Australian gigafactory.”
The company also told investors it had done “no substantive mining exploration” in the quarter, beyond bores on its Tanzanian graphite mine.
Magnis signed a “binding offtake” with commodities broker Traxys in December 2021 to deliver up to 600,000 tonnes of graphite from its Nachu mine.
But the deal required Magnis to commence building a processing plant “prior to the end of Q3 2022”.
Magnis said it had appointed advisers for the mine, which the company has been seeking to develop since 2013.
Shares in Magnis closed flat at 45c on Friday, giving the company a market capitalisation of $436.7m.
However, this is well down on Magnis’ November 2021 peak, when it traded at $0.73.
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