Syrah Resources Limited · ASX:SYR
Syrah Resources — Shareholder Meeting (May 2019)
22 slides from Syrah Resources's shareholder meeting presentation, May 24, 2019
Slide 1: Annual General Meeting
For personal use only Annual General Meeting Shaun Verner – Managing Director & CEO 24 May 2019 0
Slide 2: Important notice and disclaimer
Important notice and 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.
Slide 3: Syrah at early stage of attractive 5 year strategic growth plan
Syrah at early stage of attractive 5 year strategic growth plan For personal use only Syrah’s 5 year strategic plan targets significant shareholder value creation Balama Graphite Expansion Diversification Natural Graphite Target State Operation • Critical material for vehicle •Stable operations •Bal
Slide 4: Underpinned today by foundations for sustainable growth
Underpinned today by foundations for sustainable growth For personal use only •Strong safety record •Tier 1 producing asset •Health programs •Largest natural graphite producer •Local employment •Growth optionality •Environmental compliance •Significant vanadium Resource •Community programs •Binding
Slide 5: 2019 focus to ensure long term success
2019 focus to ensure long term success For personal use only Sustainability Production Market Penetration BAM Project • Maintain strong safety • Recovery performance • Price discovery • Production and record qualification of purified • Product mix • Market share growth • Stakeholder spherical graphi
Slide 6: Syrah is committed to making a long term positive impact in Mozambique
Syrah is committed to making a long term positive impact in Mozambique For personal use only Supporting the Employment Health & Environment Economy Community Direct and contract roles World class >US$41m paid in for Mozambicans Programs to improve environmental salaries in Mozambique education, heal
Slide 7: Sustainability Highlights 2018
Sustainability Highlights 2018 For personal use only Health & Safety Environment • Strong health and safety record with TRIFR of 0.3 as at 31 December 2018 • Environmental Monitoring Program continuing to meet over 200 license conditions • Syrah achieved accreditation in ISO 14001:2015 & OHSAS 18001
Slide 8: Sustainability Highlights 2018
Sustainability Highlights 2018 For personal use only People Government and Community • Syrah’s Mozambique workforce comprises of 96% Mozambican nationals with • Binding Mining Agreement finalised with Government of Mozambique 55% from the 8 local Host Communities • Balama Graphite Operation was offi
Slide 9: Balama – the world’s major producer in first year of operations
Balama – the world’s major producer in first year of operations For personal use only Production Summary FY2018 2018 Production and Recovery Material Mined (>9% TGC1) Tonnes (‘000) 1,356 120 80% Material Mined (>2% to <9% Tonnes (‘000) 478 100 TGC1) 60% 80 Waste Mined Tonnes (‘000) 205 Total Materia
Slide 10: Balama production improvement plan
Balama production improvement plan For personal use only Maximise Recovery and Optimise Throughput Critical Equipment Management • Graphite liberation – feed size adjustment and grinding media optimisation • Ownership and Expertise: Back to back dedicated senior specialists • Crusher availability –
Slide 11: Sales and Operations Planning – unit cost / price trade off
Sales and Operations Planning – the current unit cost / price trade off, and driver for 2019 production target For personal use only 2019 production strategy driven by unit cost reduction and price increase Unit Cost vs Price tradeoff • Drive unit cost decrease through increased production volume •
Slide 12: Sales & Marketing – Global customer and end segment base established
Sales & Marketing – Global customer and end segment base established For personal use only Graphite Sales – Positive customer feedback on grade and quality Product Price Range Achieved 2018 US$/t (CIF) FY18 2,000 Graphite Sales & Shipments (‘000) t (kt) 1,800 1,900 Graphite Sold and Shipped 73 80 1,
Slide 13: Natural Graphite Pricing – a disaggregated market
Natural Graphite Pricing – a disaggregated market For personal use only Natural Graphite China Ex-China Current global natural graphite market Demand Growth Fines Currently net exporter therefore marginal Pricing reflects incentive for China to ~600kt High off large base (-100 mesh) pricing influenc
Slide 14: Pricing Expectations – key variables of Syrah weighted average price
Pricing Expectations – key variables of Syrah weighted average price have strong upside potential over the short and medium term For personal use only Pricing factor Extent Currently Expected Expected price development Priced-In Forward Impact Market entry pricing & Reduced qualification and entry p
Slide 15: EV growth and battery capacity investment continues to support natural graphite demand
EV growth and battery capacity investment continues to support natural graphite demand For personal use only Graphite key end market growth data CY 2018 CY18 vs CY17 Demand Lithium ion battery segment Global Steel Production Mt 1,809 4.6% • Graphite is anticipated to remain the key material for anod
Slide 16: Base case demand view supports Balama reaching full capacity
Base case demand view supports Balama reaching full capacity; significant fines growth driven by battery anode material demand For personal use only kt Natural Graphite Demand Outlook 1200 +40 1,015 1000 +230 800 745 600 825 400 595 200 150 190 0 2018 Incremental Fines Demand Incremental Coarse Dema
Slide 17: Syrah’s natural spherical graphite competition is entirely Chinese
Syrah’s natural spherical graphite competition is entirely Chinese; Li-ion battery capacity expanding across regions For personal use only 4 88 18 23 GWh GWh GWh GWh 31 119 GWh GWh 105 349 10 GWh GWh GWh Currently all natural Syrah spherical graphite Battery (for battery anodes) Anode supplied from
Slide 18: Battery Anode Material (BAM) Project – First production achieved
Battery Anode Material (BAM) Project – First production achieved For personal use only First production Syrah precursor1 testing Vidalia BAM site Vidalia BAM site Phase 1 Commercial unpurified spherical Customer qualification Purified spherical and benchmarking purchase agreement purchase completed
Slide 19: Vanadium opportunity
Vanadium opportunity For personal use only Review of 2014 Review Conclusion Review Conclusion Scoping Study1 (Using original grid (Using diesel power power assumption) assumption) Capital costs Higher Higher Operation costs Lower2 Higher Balama graphite ore body Project Economics Positive Positive w
Slide 20: Finance – Balama operational and BAM cash draw to reduce significantly from Q3 2019
Finance – Balama operational and BAM cash draw to reduce significantly from Q3 2019 For personal use only Cash Net cash outflow profile Further major reduction in Balama operational and BAM cash draw • Balama 2018 cash flows impacted by the slower than expected realisation of working capital with im
Slide 21: 2019 Outlook
2019 Outlook For personal use only Balama Graphite Operation Marketing • Syrah will continue to review and manage the trade off between additional supply • Increased production consistency and stabilised logistics throughput provide a solid through production volume increase and realised prices to e
Slide 22: Summary
Summary For personal use only • 2018 provided enormous learning across both production and market • Achievable 2019 production plan developed - driving to positive operational cashflow, whilst managing market impact • Significant positive catalysts ahead for 2019: • Driving production volume and str