Syrah Resources Limited · ASX:SYR
Syrah Resources — Q1 2022 Earnings Presentation
26 slides from Syrah Resources's earnings presentation, Apr 27, 2022
Slide 1: Q1 2022 Quarterly Activities Report
Q1 2022 Quarterly Activities Report 27 April 2022 Shaun Verner – Managing Director & CEO -
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: Syrah's Value Proposition
Syrah’s Value Proposition Electric Vehicles require graphite ● Electric Vehicle (“EV”) adoption is gaining momentum ● Anodes in lithium-ion batteries used in EVs are made of graphite Syrah’s vision is to be the Graphite is a strategic critical mineral world’s leading supplier of ● Global anode suppl
Slide 4: Syrah's Positive ESG Profile
Syrah’s Positive ESG Profile ✓ ISO:45001 and ISO:14001 certification at Balama ✓ ISO:9001 certification at Vidalia Leading ESG standards ✓ Vidalia expansion project being developed in line with best practice health, safety and environmental standards ✓ Critical Risk Management Framework embedded acr
Slide 5: Q1 2022: Highlights
Q1 2022: Highlights Health and Safety • Total Recordable Injury Frequency Rate (“TRIFR”) of 0.9 for Balama and 0.0 for Vidalia at quarter end • Strong momentum in EV sales and penetration, a key leading indicator for natural graphite and active anode material (“AAM”) demand growth • Global EV sales
Slide 6: EV sales and anode production volumes continue to strengthen
EV sales and anode production volumes continue to strengthen Global EV Sales (‘000 Units) Chinese Anode Production (kt) Q1 2022: +80% on Q1 2021 93 78 80 +53% 67 71 800 59 58 59 60 58 46 44 47 51 52 54 38 42 41 41 31 700 +97% 19 23 24 23 27 13 +110% 600 Jan-20 Jun-20 Jan-21 Jun-21 Jan-22 Jul-20 Jul-
Slide 7: Battery manufacturing capacity and anode material required expected to rapidly increase
Battery manufacturing capacity and anode material required expected to rapidly increase Estimated Battery Manufacturing Capacity Pipeline (GWh)1,2 Graphite Battery Anode Material Requirement (kt)1,2 7,000 Global 1,000 Europe North America 7,000 China Europe North America Other Graphite based AAM 998
Slide 8: North American battery market is maturing rapidly to support a large-scale EV manufacturing base
North American battery market is maturing rapidly to support a large-scale EV manufacturing base in the region Location of Planned Battery Manufacturing Capacity in North America Planned Battery Manufacturing Capacity in North America1 Size Company Location Status / Start (GWh) North American share
Slide 9: Syrah's vision is to become a leading supplier of anode products
Syrah’s vision is to become a leading supplier of anode products AAM Vidalia, USA Production Potential2 Asia Tolling (>20ktpa) Base Vidalia FID Taken Europe Potential Additional Potential Further Vidalia Customer Initial Expansion Expansion: Vidalia Expansion + Europe AAM Qualification Facility Expa
Slide 10: Q1 2022: Balama Production and Operations [CURRENT STATUS]
Q1 2022: Balama Production and Operations [CURRENT STATUS] • 46kt natural graphite produced with strong operational performance and stable product quality and grade • Maximum inventory positions and ongoing disruption in the global container shipping market prevented Balama operating at a higher pro
Slide 11: Q1 2022: Balama Production and Operations
Q1 2022: Balama Production and Operations Natural Graphite Production (kt) Product Mix (% Fines) 46 80% 86% 80% 80% 83% 29 25 13 5 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2021 2021 2021 2021 2022 2021 2021 2021 2021 2022 Plant Recovery C1 Costs (US$/t) 1,159 76% 82% 82% 76% 68% 839 68%1 684 537 464 Q1 Q2 Q3 Q
Slide 12: Balama is the largest natural graphite mining/processing operation globally
Balama is the largest natural graphite mining/processing operation globally Asset Overview Ex-China Natural Graphite Reserves4 Location Southern Cabo Delgado Province, Mozambique Operations 150 Reserve & 107Mt (16% TGC) Graphite Ore Reserve SYRAH Reserve Tonnage (Mt) Greenfield Resource1 1,421Mt (10
Slide 13: Q1 2022: Balama Sales and Marketing [CURRENT STATUS]
Q1 2022: Balama Sales and Marketing [CURRENT STATUS] • Sold and shipped 35kt natural graphite and all 30kt finished product inventory contracted to customers ‒ 19kt shipped in March 2022 incorporating the first 10kt spot breakbulk shipment from Pemba • Unprecedented container shipping market disrupt
Slide 14: China domestic graphite fines price increasing due to a constructive balance in natural graphite market
China domestic graphite fines price increasing due to a constructive balance in natural graphite market Natural Graphite Fines Prices (US$/t)1 900 Asian Metal ▪ Strong demand and disrupted domestic supply has supported increased China domestic graphite fines pricing Benchmark Mineral Intelligence ▪
Slide 15: Q1 2022: Vidalia
Q1 2022: Vidalia Vidalia Initial Expansion • FID approved by Syrah Board1 • Detailed engineering more than 60% completed with Worley • No material changes in the critical path schedule or total installed capital costs following FID • Construction progressing within the planned schedule and budget un
Slide 16: Q1 2022: Vidalia
Q1 2022: Vidalia Customer Engagement and Product Qualification • Offtake agreement executed with Tesla to supply 8ktpa AAM from Vidalia at a fixed price for an initial term of four years1 • Market growth and segmentation benefits commercial engagement with other target customers – targeting addition
Slide 17: Vidalia is expected to exhibit robust operating margins and returns
Vidalia is expected to exhibit robust operating margins and returns Vidalia Initial Expansion Project Parameters Operating Cost Estimate (All-in) (US$/t AAM Real)1 2020 2022 Metric Units % Change BFS3 FID Observable Spot Natural Graphite AAM Price Range4: AAM ~$4,950/t – $6,970/t ktpa 10 11.25 +12%
Slide 18: De-risking the Vidalia Initial Expansion
De-risking the Vidalia Initial Expansion Date Key Milestones Apr 2022 ✓ Conditional Commitment for loan from DOE Feb 2022 ✓ Vidalia Initial Expansion project fully funded Feb 2022 ✓ Worley awarded construction management services contract Feb 2022 ✓ Final investment decision taken on Vidalia Initial
Slide 19: Syrah on track to become an integrated natural graphite AAM producer
Syrah on track to become an integrated natural graphite AAM producer 2020 2021 2022 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Product Qualification Detailed engineering on Vidalia Initial Expansion significantly advanced First purified spherical graphite (anode precursor) to full specification ✓ Dispatch of anode precur
Slide 20: Vidalia Initial Expansion construction and production timetable
Vidalia Initial Expansion construction and production timetable Key Steps in Construction Ongoing Activities • Order critical long-lead items <2 Years • Execute construction contracts sequentially • • Product development and testing (small particle sizes) Equipment trialing (purification, carbonisat
Slide 21: Vertical integration to AAM supply in USA is a key differentiator for Syrah
Vertical integration to AAM supply in USA is a key differentiator for Syrah Balama Graphite Operation1 Vidalia AAM Project2 Sites / Location Benefits of vertical integration to Syrah: ▪ Margin capture / cost protection Supply Chain 1. Mining / Ore Processing 2. Active Anode 3. Active Anode Material
Slide 22: Q2 2022 outlook
Q2 2022 outlook EV sales growth, constructive demand environment for anode material and Chinese supply disruption driving strong demand and pricing for Balama products Increasing Balama production beyond 15kt per month with consideration of market demand, forward customer contracting and shipping av
Slide 23: Appendix
Appendix 23 Photo: Balama Ore
Slide 24: Battery and natural graphite fines demand in early stages of growth – driven by EV adoption
Battery and natural graphite fines (-100mesh) demand in early stages of growth – driven by EV adoption Global EV Sales (Millions) Global Battery Manufacturing Capacity (GWh) Global Natural Graphite Demand (kt) 90 80% 8,000 12,000 80 70% 7,000 10,000 70 60% 6,000 60 8,000 50% 5,000 50 40% 4,000 6,000
Slide 25: 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 Batteries Natural Graphite Demand for Batteries 2020 100% Silicon LTO Other 1% 1% 1% MCMB 1% Metal Composition % Mass1 Natural 39% Synthetic 58%
Slide 26: Syrah's global business to supply growing battery anode demand
Syrah’s global business to supply growing battery anode demand Contract Sales Liaison, Sales & Shanghai Marketing Hub, UAE Vidalia Active Anode Material Facility, Louisiana USA Balama Graphite Operation, Mozambique Head Office, Australia 26 26