Syrah Resources Limited · ASX:SYR
Syrah Resources — Investor Presentation (April 2017)
21 slides from Syrah Resources's investor presentation, April 2017
Slide 1: Sales & Marketing
Sales & Marketing April 2017 0
Slide 2: Disclaimer
Disclaimer This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation may not be distributed in
Slide 3: Balama has the largest defined reserve and is the only fully funded listed graphite project
Syrah’s Balama deposit has the largest defined reserve and is the only fully funded listed graphite project 160 Syrah Resources’ low-grade stockpiles at 2 – 9% TGC will be greater than most other proposed 140 projects’ head grade Volt Resources 120 18.9 Mt at 9% TGC cut- Syrah Resources off 100 Magn
Slide 4: Major project metrics highlight the attractiveness of the Balama investment
Major project metrics highlight the attractiveness the Balama investment Capital Intensity Strip Ratio (US$ invested or proposed / tonne of capacity) (tonne of waste per tonne of graphite ore) 4.0 2.00 3.0 1.50 2.0 1.00 1.0 0.6 0.50 0.04 0.0 0.00 USA Australia Canada Canada Canada Canada Syrah Tanza
Slide 5: Syrah's graphite is in demand, and characteristics provide production and cost advantages
Syrah’s graphite is in demand, and characteristics provide production and cost advantages Characteristics of Syrah Resources’ graphite 1 Optimal flake size -100 mesh maximises production yield for battery Syrah Resources Spherical Graphite market. +100 mesh material primarily for industrial marke
Slide 6: There is a value in use benefit to using Syrah Resources graphite at multiple stages of processing
There is a value in use benefit to using Syrah Resources graphite at multiple stages of processing 1kg of natural flake graphite to produce a spherical graphite product Syrah Resources’ Graphite Micronizing Balama graphite is 1 easier and higher yielding compared 1 kg Bi-products & waste ~ 55% with
Slide 7: In 2016, approximately 75% of natural flake graphite was sourced from China
In 2016, approximately 75% of natural flake graphite was sourced from China Norway 10,000t Russia Canada 9,000t 5,000t Ukraine 11,000t China 490,000t India 25,000t Madagascar Brazil 8,000t 90,000t Zimbabwe <5,000t Global Total ~650,000t Source: Syrah Resources, Benchmark Minerals 6
Slide 8: By 2020 Syrah will be the largest individual graphite producer in the world with ~40% market share
By 2020 Syrah will be the largest individual graphite producer in the world with ~40% market share Norway 10,000t Russia 9,000t China 400,000t India 25,000t Mozambique 350,000t (100% SYR Namibia capacity) Brazil 20,000t 60,000t Madagascar 16,000t Global Total ~900,000t Source: Syrah Resources 7
Slide 9: Syrah Resources will be a first quartile producer both during ramp up and at full capacity
Syrah Resources will be a first quartile producer both during ramp up and at full capacity Flake Graphite C1 Cost Curve (Not concentrate TGC adjusted, first 12 months of production for Syrah Resources, 2017/18) 0% 25% 50% 75% 100% 2020 Variable costs 70% Fixed Costs 30% 0% 25% 50% 75% 100% Source: S
Slide 10: Balama production ramp up will be driven by strong global demand growth
Syrah’s Balama production ramp up will be driven by the strong global demand growth profile Natural Flake Graphite Demand Forecast ktpa 1,000 2016 – 2020 Sector 900 CAGR New energy 55% 800 vehicles 700 Energy storage 120% 600 Consumer goods 13% 500 Other 4% 400 300 Steel products 0% 200 100 0 2016 2
Slide 11: Syrah's premium product will command a premium price
Syrah’s premium product will command a premium price Flake prices are determined based on a range of value in The market already appreciates this value. An additional use variables such as graphite content, flake size and +1% of TGC equates to a +4 - +7% value uplift, depending impurity levels. on t
Slide 12: Price has historically been driven by steel and industrial applications; next by battery demand
Price has historically been driven by steel and industrial applications; in the next phase by battery demand Graphite Price USD$ (USD, real 2016 terms) 1,400 Post Depressed prices for Japan, Korea & China New price depression 25 years as the global industrialization driver; 1,200 recovery and steel
Slide 13: Our market views – Battery driven demand growth, satisfied by Syrah supply
Our market views – Battery driven demand growth, satisfied by Syrah supply. Quality advantage in price. We believe maximum supply capacity of natural flake graphite is <500ktpa due to China increasing costs, grade depletion and increasing environmental regulations. Supply Syrah Resources’ imminent a
Slide 14: Syrah's marketing strategy is to be diversified across end user markets and geographies
Syrah’s marketing strategy is to be diversified across end user markets and geographies China direct flake & tolling Europe Hairong Traders Morgan SSI Hairong Offtake 15 to 25ktpa Morgan 4ktpa* Refractory Marubeni Hiller Marketing Offtake Producer SSI Carbon 14ktpa* 100ktpa* 15ktpa SSI 30ktpa Chalie
Slide 15: Flake offtake agreements and commercial negotiations are well progressed
Syrah’s flake offtake agreements and commercial negotiations are well progressed – all production will be placed Current and additional agreements in place: • Marubeni – 20,000mt offtake being operationalised (timing, customer volumes, pricing) • Chalieco – 80,000mt offtake being operationalised (ti
Slide 16: Syrah's downstream strategy has progressed significantly since our last update
Syrah’s downstream strategy has progressed significantly since our last update The key elements of the Downstream BAM strategy are to: • Complete and commercialise the downstream qualification plant • Initiate battery anode material testing and formulation capability • Advance revenue through earlie
Slide 17: Low cost, high quality entry into the natural flake market; downstream value addition in progress
Low cost, high quality entry into the natural flake market; Downstream commercial value addition in progress 1 We remain on track to deliver first ore concentrate in Q3, matching ramp up production to the demand profile, with additional capacity filling the supply gap. 2 Syrah will be one of the l
Slide 18: Supporting Information
Supporting Information 17 17
Slide 19: Graphite market definition and flow
Graphite market definition and flow Global Graphite Market Flow (2016) Total Graphite • The total graphite market refers Natural 2.45 Mt Synthetic to the sum of natural and Graphite Graphite synthetic graphite production. 950, 000t 1.5 Mt • Synthetic graphite End Use Markets predominately derived fr
Slide 20: Non-metallic and metallic properties of flake graphite ensure the largest variety of applications
Non-metallic and metallic properties of flake graphite ensure the largest variety of applications Graphite Types, Properties & Uses End Markets Graphite Type Disadvantages Advantages Metallurgical Batteries Technical Other Low cost, low impurities, Inconsistent Flake crystalline structure, quality p
Slide 21: How much does an additional GWh of battery production impact flake graphite demand?
How much does an additional GWh of battery production impact flake graphite demand? It depends… Factory to Flake Calculation Natural Natural 40% Flake Graphite Graphite recovery Feedstock Content Demand 3 4 5 20% 210t 462t 1 2 Factory Anode Material 40% 420t 924t Capacity 1 gigawatt 1,050t 60% 630t