Syrah Resources Limited · ASX:SYR
Syrah Resources — Q4 2023 Earnings Presentation
33 slides from Syrah Resources's earnings presentation, Jan 31, 2024
Slide 1: Q4 2023 Quarterly Activities Report
Q4 2023 Quarterly Activities Report 31 January 2024 syrahresources.com.au Q4 2023 Quarterly Activities Report Syrah Resources | ASX: SYR1 28 January 2024
Slide 2: Important notice and disclaimer
Important notice and disclaimer This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, Investor Relations invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. Thi
Slide 3: Our Position
Our Position Syrah is a major ex-China natural graphite and active anode material (AAM) supplier for global customers, with upstream and downstream expansion potential underpinned by its world-class Balama resource Natural graphite and Syrah is the only Balama is a 350ktpa Syrah is AAM demand will o
Slide 4: Our ESG Profile
Our ESG Profile Leading ESG standards Best practice sustainability Low carbon footprint Auditable back to source ✓ ISO:45001 and ISO:14001 frameworks ✓ Independent life cycle assessment ✓ Fully integrated by Syrah from certification at Balama ✓ Sustainability frameworks guided (LCA) completed mine t
Slide 5: Q4 2023 Highlights
Q4 2023 Highlights Health & Safety Balama & Vidalia Market & Corporate – Balama achieved targeted production for the quarter – Global EV sales in 2023 up 37% compared 20 kt – Balama plant recovery of 77% during operating period to 2022 to ~14.7 million units4 1.2 Group TRIFR Balama production – US$4
Slide 6: Balama Production, Operations and Sales
Balama Production, Operations and Sales Plant operations and production in campaigns from Q2 to Q4 2023 Natural Graphite Production (kt) Product Mix (% Fines) 35 41 91% 91% 87% 88% 87% 15 18 20 Q4 Q1 Q2 Q3 Q4 Q4 Q1 Q2 Q3 Q4 2022 2023 2023 2023 2023 2022 2023 2023 2023 2023 Plant Recovery C1 Costs (U
Slide 7: Sequentially commissioning the 11.25ktpa AAM Vidalia facility
Sequentially commissioning the 11.25ktpa AAM Vidalia facility Milling Purification area area Land for Vidalia Further Expansion to 45ktpa AAM 11.25ktpa AAM facility 11.25ktpa (milling area) AAM facility (furnace area) Furnace Aerial area view 11.25ktpa AAM facility (purification area) Q4 2023 Quarte
Slide 8: Chinese anode production trended higher in Q4 2023
Chinese anode production trended higher in Q4 2023 Global Monthly EV Sales (‘000 Units)1 Chinese Anode Production (kt per Month)2 2,000 2023 EV Sales 200 2023 Chinese Anode Production +36% 1,800 1,600 +37% on 2022 180 160 +28% on 2022 +23% 1,400 +27% +31% 140 +41% +38% +39% +38% 1,200 +60% 120 +81%
Slide 9: Short-term conditions have been challenging
Short-term conditions have been challenging Global EV sales1 vs. China AAM production2 China Natural Graphite Production2 vs. China AAM Production2 200 2,000 200 160 1,600 160 120 1,200 120 80 800 80 40 400 40 0 0 0 Jul-21 Jul-22 Jul-23 Jul-21 Jul-22 Jul-23 Jan-22 Jan-21 Jan-23 Jan-21 Jan-22 Jan-23
Slide 10: China graphite controls immediately impacted ex-China market
China graphite controls immediately impacted ex-China market China natural graphite exports (kt) China spherical graphite exports (kt) China natural graphite AAM exports (kt) 70 Japan USA South Korea 140 Japan USA Japan 90 Hungary Other South Korea India 120 60 Germany Other 80 100 50 70 60 80 40 50
Slide 11: Syrah's market position
Syrah’s market position Q4 2023 Quarterly Activities Report 11
Slide 12: Syrah can capitalise on a graphite market in structural flux
Syrah can capitalise on a graphite market in structural flux Geopolitical and commercial developments in graphite and AAM drive increased opportunities for Syrah margin and volume Market developments Syrah advantages Attractive graphite market outlook relative to other battery Long-term, large scale
Slide 13: Syrah leads ex-China industry in development and operations
Syrah leads ex-China industry in development and operations >8 years advanced on ex-China peers, with >US$700m of investment to date in development, operations, product qualification and commercial sales; deep operating experience Balama feasibility Bankable study Construction and +2 years commissio
Slide 14: Graphite market requires higher prices to induce supply
Graphite market requires higher prices to induce supply Commodity price vs 2025 industry cost curve Forecast market balance (Mt) Key considerations Natural graphite (US$/t FOB) 2020 2025 2030 2035 ▪ Natural graphite market driven by fines demand in AAM applications ▪ High proportion of the supply cu
Slide 15: Lack of ex-China supply creates graphite market imbalance
Lack of ex-China supply creates graphite market imbalance China’s dominant share of production and new supply headwinds have driven a need for increased ex-China production capacity – Balama & Vidalia supply critical Significant pipeline of battery manufacturing capacity Highly geographically dispro
Slide 16: Ex-China market size and growth opportunity for Syrah is clear
Ex-China market size and growth opportunity for Syrah is clear Syrah’s existing and planned production capacities represent only a fraction of the opportunity in the ex-China addressable market – lead time advantage creates further opportunity Ex-China natural graphite Natural graphite AAM for ex-Ch
Slide 17: Extensive Government support for ex-China development
Extensive Government support for ex-China development Financial commitments towards investment in critical 1 US Inflation Reduction Act and import tariffs; security of supply concerns mineral development (log scale) US$m equiv. investment (log 10) ▪ Security of supply concerns driving bipartisan pol
Slide 18: Syrah is a global vertically integrated graphite supplier
Syrah is a global vertically integrated graphite supplier Additional AAM capacity development strategy Balama Natural Graphite Offtake and Marketing Strategy Syrah aims to become a leading supplier Vidalia AAM Facility Geographic diversification in Balama natural graphite sales to AAM and battery ma
Slide 19: Syrah fundamentally changing Balama sales composition
Syrah fundamentally changing Balama sales composition Driving toward higher and more stable utilisation of Balama’s production capacity Balama natural graphite Balama natural graphite Balama natural graphite sales composition sales composition sales composition (2022) (2023) (2026) Ex-China Integrat
Slide 20: Balama is the premier graphite resource and operation
Balama is the premier graphite resource and operation Ex-China natural graphite reserves and reserve grade1 Balama operating costs (US$/t FOB) at different production rates BALAMA 25 CUT-OFF 10kt per month 15kt per month 20kt per month 25kt per month ~30kt per month GRADE2 Africa 800 North America 2
Slide 21: Syrah has clear advantages over earlier stage graphite projects
Syrah has clear advantages over earlier stage graphite projects Upstream capital intensity and operating cost estimates Enterprise value (A$m) Listed ex-China natural graphite companies PFS BFS (Pre-2023) Bubble size shows capacity BFS (2023-) Operational/Construction (ktpa natural graphite) Develop
Slide 22: Balama's infrastructure in place and optimised over six years
Balama’s infrastructure in place and optimised over six years Process plant, product Ativa pit warehouse and ROM stockpiles Tailings 11.25 MWp storage solar facility photovoltaic (cells array 1 & 2) Q4 2023 Quarterly Activities Report 22
Slide 23: Vidalia is the cornerstone of Syrah's downstream business
Vidalia is the cornerstone of Syrah’s downstream business Downstream expansion is underpinned by Balama’s world-class resource Vidalia, USA Asia (ex-China) Joint Venture / Tolling (>20ktpa) Technology Support to 3rd Party (ex-China) Partners (>50ktpa) Europe Joint Ventures (>20ktpa) Production Base
Slide 24: Vidalia economics attractive – built on cost and price experience
Vidalia economics attractive – built on cost and price experience Potential for significant margin upside as new project inducement drives marginal pricing Economics of Vidalia facility (45ktpa AAM capacity)1 Long-term natural graphite AAM price assumption (US$/kg)3 $11.88 2023 high AAM price US$5.0
Slide 25: Syrah's ESG position provides lower emissions & traceability
Syrah’s ESG position provides lower emissions & traceability Global Warming Potential of graphite products (kg CO2 eqv./kg product)1 Syrah Major Chinese ESG element (as proxy for ex-China suppliers) suppliers Vidalia AAM 7.3 >3x ~2x IRMA5 certification Chinese natural graphite AAM 14.2 Responsible M
Slide 26: Syrah's incumbent position can embed key advantages
Syrah’s incumbent position can embed key advantages New ex-China demand, low alternative supply; upstream natural graphite and downstream AAM operations Syrah’s opportunity Stakeholders and customers Customer driven product Transition to higher margin motivated to underpin further iteration and gove
Slide 27: Syrah's 2024 deliverables will embed unique advantage
Syrah’s 2024 deliverables will embed unique advantage ✓ Start of production from 11.25ktpa AAM facility at Vidalia ✓ Commercial sales from 11.25ktpa AAM facility at Vidalia ✓ Offtake agreements for the Vidalia Further Expansion project ✓ US DOE loan funding for the Vidalia Further Expansion project
Slide 28: Our Valuation Proposition
Our Valuation Proposition Vertical Operating and Cost Position ESG Position Expansion Integration Development Potential ▪ Natural graphite ▪ Largest integrated ▪ Cost competitive ▪ Leading ESG ▪ Significant from Balama for natural graphite AAM supply from standards and downstream AAM producers opera
Slide 29: Appendix
Appendix Q4 2023 Quarterly Activities Report 29
Slide 30: Battery and natural graphite fines demand is in the early stages of growth
Battery and natural graphite fines (-100mesh) demand is in the early stages of growth – driven by EV adoption Global EV Sales (Millions) Lithium-ion Battery Capacity (GWh) Natural Graphite Demand (kt) 100 90% 8,000 9 90 80% 8 7,000 80 70% 7 6,000 70 60% 6 5,000 60 50% 5 50 4,000 40% 4 40 3,000 30% 3
Slide 31: Graphite is a high intensity material in EV batteries
Graphite is a high intensity material in EV batteries, with costs / emissions expected to drive shift towards natural graphite Battery Mineral Composition of Batteries1 Natural Graphite Demand for Batteries2 100% 2023 Other Silicon 1% 4% Natural 25% Metal Composition % Mass Synthetic 70% 2040 Other
Slide 32: US Inflation Reduction Act Section 30D credits
US Inflation Reduction Act Section 30D credits FEOC in the critical minerals supply chain? AAM supply Ore extraction and Spherical graphite and routes concentration purification processing Finished AAM Section 30D EV tax credit Extraction or processing facilities located or companies in a FEOC cover
Slide 33: Syrah's global business to supply growing battery anode demand
Syrah’s global business to supply growing battery anode demand Vidalia, Louisiana, USA Balama, Cabo Delgado Province, Mozambique Sales and Marketing Hub, Dubai, UAE Contract Sales Liaison, Shanghai, China Corporate Office, Melbourne, Australia Q4 2023 Quarterly Activities Report 33