Syrah Resources Limited · ASX:SYR
Syrah Resources — Investor Presentation (December 2016)
49 slides from Syrah Resources's investor presentation, Dec 13, 2016
Slide 1: Syrah Releases New York Presentation
ASX/Media Release 13 December 2016 __________________________________________________________________________________________________ SYRAH RELEASES NEW YORK PRESENTATION _________________________________________________________________________________________ For personal use only Syrah Resources (
Slide 2: The Emerging Giant of Graphite Supply into the Renewable Energy Industry
For personal use only The Emerging Giant of Graphite Supply into the Renewable Energy Industry New York, December 2016
Slide 3: Disclaimer
Disclaimer For personal use only 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
Slide 4: A Perspective on Global Energy Storage Opportunities
For personal use only A Perspective on Global Energy Storage Opportunities Dr. Christina Lampe-Onnured Non-Executive Director
Slide 5: Significant technology and system development in multiple market segments
Significant technology and system development for the next 10 years in multiple market segments world wide For personal use only Portable Power • Lithium-ion cell demand growing to $16Bn by 2018 • Requirements: dependable run time, fast charge, safe Mobility Revolution • Technology Transportation •
Slide 6: Measurable climate change is calling for action
Measurable climate change is calling for action – an opportunity to do good and do well! For personal use only NASA reports: • Increased levels of COx, NOx, SOx • Earth continuing to increase after having reached the 1⁰C increase in 2015 since 1880 44 4
Slide 7: US national agenda involves energy security at the highest level
The US national agenda involves energy security at the highest level, with innovation and time to market as levers For personal use only Department of Energy: Department of Defence/Pentagon: • To reduce U.S dependence on imported oil and Integrating plans for climate change risks across all of incre
Slide 8: China's population and economy make it the largest energy consumer
US Energy Information Administration Perspective: China’s Population and Fast- growing Economy has led it to be the Largest Energy Consumer and Producer in the World For personal use only • China is the world's second-largest oil consumer behind the United States and became the largest global energy
Slide 9: Problem
Problem For personal use only In spite of strong market need for energy storage, which is a critical part of the climate change solution, deployment has been limited due to: 1. Energy Density - compact battery pack greater than 300 Wh per litre allowing long range in existing vehicle designs; and
Slide 10: Li-ion battery technology history and path to automotive dominance
A technology perspective: Li-ion battery technology invented in 1975, first commercialized in 1991, took over portable applications by 2000, heading for dominance in electrified automotive markets and entering strongly into battery storage for the grid markets globally For personal use only The 2014
Slide 11: The automotive market will help drive cost out
The automotive market will help drive cost out and add experience for larger packs and systems For personal use only 000 Expecting to reach 100M in new car in Percent of New Vehicle Sales 2020 Median Forecast of US EV and PHEV 800 sales by 2020 600 400 Deutsche Bank 11% 200 • weighted average of 8.2
Slide 12: Panasonic forecasts 2025 lithium-ion grid market growth
Panasonic forecasts the 2025 lithium-ion market to grow to $160B for the electric utility/grid (stationary) market For personal use only Panasonic’s Forecasted Growth in Lithium-ion Batteries 2015-08-10 Benchmark Mineral Intelligence http://benchmarkminerals.com/blog/chart- panasonic-predicts-lithiu
Slide 13: Lithium-ion market solved safety issues for portable power
From the largest recall in US history (2006), the lithium-ion market solved safety issues for portable power products For personal use only Example from the global Laptop Market 2004-2006 Customer dissatisfaction • Batteries are No. 1 customer complaint • Fear about product safety • Marketed run-tim
Slide 14: Sandia Study: fail safe battery systems to win in grid storage
Sandia Study: Expecting fail safe battery systems at high energy density and low cost to win in grid storage markets…..and that safety will enable the high performance/low cost paradigm For personal use only 2006 – US CPCS largest recall in history 4.1M Sanyo laptop batteries in Dell computers 2015
Slide 15: Solutions must address a three vector problem
Solutions must address a three vector problem – the grid market will be able to leverage the EV markets For personal use only Higher Energy Density Lowest Cost Highest Safety EV MARKET Enables longer range in Enabling price parity Elimination of EV smaller pack footprint with ICE vehicles battery pa
Slide 16: Enter multiple high growth markets while managing risk
Enter multiple high growth markets while managing risk For personal use only 1) Determine access points for electric transport and grid applications (residential, commercial and utility) 2) Consider whole product planning from cell through pack demos and leverage existing designs and partnerships 3)
Slide 17: Good technology, price, safety and product considerations
Good technology, price, safety and product considerations will accelerate global growth For personal use only • World-leading safe high energy density in large prismatic cell Ability to pack more energy more densely in a cell o For Grid; smaller footprint, ease of operation o For Auto: smaller, fl
Slide 18: The Future of Graphite
For personal use only The Future of Graphite Jim Askew Executive Chairman
Slide 19: Flake Graphite and Battery Anode Material
For personal use only Unsaved Document / 21/09/2012 / 20:01 Map imaged sourced from Routledge (Taylor & Francis Group) Flake Graphite Battery Anode Material 17
Slide 20: Mine to markets
Mine to markets For personal use only Balama ore Processing Export Traditional markets - Grinding - Flotation - Screening - Bagging BAM Commercial Facility Lithium ion battery - Spheroidisation - Electric vehicles - Purification - Grid storage - Coating 18 18 18
Slide 21: Opportunity to participate in the entire graphite value chain
Opportunity to participate in and grow the entire graphite value chain as a consistent, high quality supplier For personal use only Flake Uncoated Uncoated Coated Coated Graphite Spherical Spherical Spherical Spherical Products US$300/t (1) (1) US$2,300/t US$3,200/t(2) (2) US$3,200/t Cost US$2,300/t
Slide 22: Battery anode material demand projections far exceed supply
Battery anode material (BAM) demand projections far exceed supply; 117kt shortfall by 2019 when the Commercial Plant is in full production For personal use only 500 500 450 450 Synthetic Anode material demand forecast (ktpa) 400 Battery Anode Material 400 350 350 300 300 Natural 250 Battery Anode Ma
Slide 23: Balama Ore Reserves compared to listed companies
Balama Ore Reserves compared to Australian and Canadian listed companies For personal use only 140 Balama 120 18.6 Mt of contained graphite at 9% TGC cut-off 100 Magnis Resources 80 Tonnage (Mt) 60 40 Northern Energizer Graphite(1) Resources(2) 20 Kibaran Focus Mason Resources(3) Graphite(5) Graphit
Slide 24: Balama Project
Balama Project For personal use only 50m 22 22 Plant and equipment Balamalay processing down area plant at the siteBalama looking Project South 22
Slide 25: Balama Project update
Balama Project update For personal use only 2016 2017 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Balama Graphite Project, Mozambique Balama Plant Construction Commissioning First Ore & Production Ramp Up Full Production Rapidly developing the world class Balama Project located in Mozambique Balama Project
Slide 26: Balama Project Construction
Balama Project Construction For personal use only Some 1,400 personnel are currently working on site Detailed engineering and design of the process plant complete Key items of plant and equipment for the processing plant, as well as significant quantities of plate and steel work have been deli
Slide 27: Balama Project enhancements
Balama Project enhancements For personal use only Balama Project budget has been increased from US$175 million to US$185 million due to certain enhancements, principally the introduction of attrition cells and additional on-stream analysis Attrition cells have been added to the Balama process fl
Slide 28: Balama offtake agreements (excluding BAM)
Balama offtake agreements (excluding BAM) For personal use only First year of production 90% covered with industrial demand Offtake agreement with Chalieco for 80ktpa of flake graphite over 3 years Offtake agreement with Marubeni for 20ktpa of flake graphite over 3 years Statement of Sales I
Slide 29: BAM strategy
For personal use only BAM strategy Corporate overview 27 27 Syrah Pilot Plant, Guangzhou, China 27
Slide 30: A vertically integrated strategy to capture the market opportunity
A vertically integrated strategy to capture and shape the market opportunity quickly For personal use only Syrah will pursue a multi-channel sales strategy with a presence in flake and battery anode material markets Develop a Commercial BAM Plant to supply the battery anode market: Initial 20k
Slide 31: Technology Centre in Perth and further plants
For personal use only Technology Centre being established in Perth for process training, product optimisation and R&D Commercial discussions with customers underway regarding sales into the spherical graphite and by-product markets for Balama -100 mesh graphite prior to production commencement a
Slide 32: Establishing an initial Commercial Plant in Louisiana
Establishing an initial large scale Commercial Plant in Louisiana has a number of advantages For personal use only 2016 2017 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 BAM - Commercial Plant, Louisiana USA BFS Development Production $ Proximity to customers based in the Americas Fast approval and permittin
Slide 33: Commercial Plant buildout strategy
Commercial Plant buildout strategy For personal use only Approvals and permits for 60ktpa capacity: Initial capacity of ≥20ktpa of uncoated spherical graphite Rapid, low risk, incremental modular capacity increases of 10ktpa, up to 60ktpa Close collaboration with relevant authorities and lea
Slide 34: Establishing a Louisiana Product Qualification Plant
Establishing a Louisiana Product Qualification Plant will accelerate commerciality For personal use only 2016 2017 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 BAM - Qualification Plant, Louisiana USA Development Customer Product Qualification Currently in advanced discussions with a US Engineering Firm to pro
Slide 35: Perth based Technology Centre
A Perth based Technology Centre to provide sales and marketing data and optimise process development For personal use only 2016 2017 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 BAM - China / Perth China Pilot Plant Perth Technology Centre Currently specifying design, coordinating spheroidisation of material a
Slide 36: Timetable recap
Timetable recap For personal use only 2016 2017 2018 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Balama Graphite Project, Mozambique Balama Plant Construction Commissioning First Ore & Production Ramp Up Full Production BAM - Commercial Plant, Louisiana USA BFS Development Production $ BAM - Qualification Plant, Lou
Slide 37: Summary
Summary For personal use only Balama Project remains on schedule for commissioning in Q2 2017 Significant potential for higher concentrate grades from Balama to reduce downstream processing costs Solid Balance Sheet with no debt, fully funded to deliver the Balama Project Focussed on the dev
Slide 38: Capital structure
Capital structure For personal use only Key details Geographic analysis of investors(1) Shares on issue 263.8m (as at 30 September 2016) Other Europe (ex. UK) Asia 1% Options on issue 2% 12% 8.7m (as at 2 December 2016) North America Unlisted performance rights 8% 0.3m (as at 2 December 2016) Austra
Slide 39: Key contacts
Key contacts For personal use only Office Syrah Resources Limited ASX: SYR ABN 77 125 242 284 Level 9, 356 Collins St Melbourne VIC Phone: +61 3 9670 7264 www.syrahresources.com.au John Knowles John Knowles General Manager – Investor Relations General Manager Contact: +61 – Investor 419 893 491 Rela
Slide 40: Appendices
For personal use only Construction Appendices 38 38
Slide 41: Share price and volume
Share price and volume For personal use only 7 20 16 Jun 2016 – Fully underwritten A$194m 18 capital raising 6 5 Oct 2016 – Resignation of Managing Director 16 5 14 Daily trading volume (m) 12 4 Share price (A$) 10 16 Jul 2016 – Economist 3 article suggesting fiscal 8 and political instability in Mo
Slide 42: Mozambique debt restructure
Mozambique debt restructure For personal use only On 25 October 2016, the Mozambique government officially acknowledged their inability to pay the next instalments of their debts (~US$10b), and have called for a restructuring of payments and new financial aid from the International Monetary Fund (
Slide 43: Mozambique long-term growth prospects
For personal use only Mozambique’s long-term growth prospects are still promising on the back of progress in the development of its nascent energy sector The Mozambique’s government payment capacity is therefore expected to significantly increase after 2021, subject to a timely implementation of
Slide 44: Construction progress – November 2016
Construction progress – November 2016 For personal use only 1. 2. 4. 3. Clockwise from top left: 1. Ore bin construction 2. Recycle crusher 3. Primary milling – scrubber installation 4. Thickener 42 42 42
Slide 45: Construction progress – November 2016
Construction progress – November 2016 For personal use only 1. 2. 4. 3. Clockwise from top left: 1. Filtration 2. Flake drying area 3. Plant workshop 4. Plant and equipment lay down area 43 43 43
Slide 46: Solid balance sheet with no debt
Solid balance sheet with no debt For personal use only Fully funded to deliver the development of the Balama Project US$30 million to fund working capital requirements for the Balama Project through to positive cash flows across a range of reasonable assumptions Cash reserves of US$35 million
Slide 47: Balama Project development
Balama Project development For personal use only Balama Project Capital Expenditure(1) Remains on schedule to commence commissioning in Q2 CY2017 Remaining Commitments US$58m 31% 46% Project costs Detailed design and major to date procurement activities completed US$84m Project Capital Cost US$1
Slide 48: Additional contingency funding
Additional contingency funding For personal use only Work has commenced on arranging a revolving debt facility provisionally between US$30m and US$50m for the Balama Project purely as a conservative contingency measure during commissioning and production ramp-up. 46 46
Slide 49: Why does product qualification take time?
Why does product qualification take time? For personal use only Demonstrating consistency in product across the qualification period places Syrah in a strong position Observed demand pressure on raw material supply is assisting in building relationships and facilitating collaboration with key cu
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