Talga Group's (ASX:TLG) letter of intent (LOI) with Japanese firm Mitsubishi Chemical represents "meaningful" potential customer pathway for the company's anode products, Euroz Hartleys said in a Monday note.
The company secured a non-binding LOI with Mitsubishi Chemical to advance technical evaluations and commercial discussions on the potential supply of Talnode graphite anode materials for hybrid electric vehicle batteries.
The companies plan to negotiate a conditional supply terms sheet by September and finalize a definitive three-year supply agreement by December, contingent upon successful testing, product qualification, and other conditions.
Partnering with Mitsubishi Chemical provides further validation of the company's product offering and positioning as a Foreign Entity of Concern-free, vertically-integrated Swedish mine-to-anode producer using proprietary technology, Euroz Hartleys said.
Euroz Hartleys reaffirmed its speculative buy recommendation on Talga Group, while its AU$1.33 price target is under review.
Talga Group's shares fell almost 4% in recent Monday trade.