Syrah Resources Limited · ASX:SYR
Syrah Resources — Investor Presentation (August 2015)
56 slides from Syrah Resources's investor presentation, Aug 3, 2015
Slide 1: Delivering the World's Premier Graphite Operation
For personal use only Syrah Resources Syrah Resources Limited Limited Delivering the World’s Premier Graphite Operation STATES STATES Balama Graphite Feasibility Study UNITED THEUNITED Presentation FOR NOTNOT DISTRIBUTION FOR OR RELEASE DISTRIBUTIONOR INTHE RELEASE IN Equity Capital Raising Presenta
Slide 2: Important notice and disclaimer
For personal use only Important notice and disclaimer IMPORTANT: You must read the following before continuing. This presentation has been prepared by Syrah Resources Limited (ABN 77 125 242 284) (“Company” or “Syrah”, including its subsidiaries, unless the context requires otherwise) in relation to
Slide 3: Important notice and disclaimer (cont'd)
For personal use only Important notice and disclaimer (cont’d) Past performance Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of the Company's views on its future performance or condition. I
Slide 4: Important notice and disclaimer (cont'd)
For personal use only Important notice and disclaimer (cont’d) Diagram, charts, graphs and tables Any diagrams, charts, graphs and tables appearing presentation are illustrative only and may not be drawn to scale. Investment risk NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES An investment in
Slide 5: Important notice and disclaimer (cont'd)
For personal use only Important notice and disclaimer (cont’d) Not an offer This presentation is not and should not be considered an offer or an invitation to acquire Company securities or any other financial products and does not and will not form any part of any contract for the acquisition of New
Slide 6: Table of contents
For personal use only Table of contents 1. Offer Details 2. Investment Highlights NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3. Balama Graphite Project 4. Future Potential Projects: Spherical Graphite Facility, Recarburiser Products and Vanadium Project 5. Appendices A. Company Overview B.
Slide 7: Offer Details
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1. Offer Details 6
Slide 8: Offer overview
For personal use only Offer overview Offer size and structure Equity raising of approximately A$211 million via: − A 4 for 19 fully underwritten accelerated pro‐rata renounceable Entitlement Offer of New Shares to raise approximately A$113 million NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STAT
Slide 9: Sources and uses of proceeds
For personal use only Sources and uses of proceeds Sources US$m A$m Estimated uses to 30 June 2017 US$m A$m Syrah cash at bank at 30 June 2015 7 9 (1) Balama Graphite Project development 144 198 Net proceeds of Offer 148 203 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Total sources 155 212
Slide 10: Offer timetable
For personal use only Offer timetable Event Date Announcement of Capital Raising Monday, 3 August 2015 Placement Monday, 3 August 2015 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Monday, 3 August 2015 to Institutional Entitlement Offer Tuesday, 4 August 2015 Institutional Bookbuild Wednesda
Slide 11: Investment Highlights
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 2. Investment Highlights 10
Slide 12: Investment Highlights
For personal use only Investment Highlights Exposure to world class Balama Graphite Project 2015 Feasibility Study completed by Snowden Mining Consultants Pty Ltd (“Snowden”) confirms the potential of the Balama Graphite Project:(1) − High grade and low strip ratio, with an estimated IRR of 71% an
Slide 13: Balama is a unique, world class graphite project
For personal use only Balama is a unique, world class graphite project Equity market capitalisation (US$m)(1) Reserves(2) 598 13.2 14 20% 18% Total Graphite Content (TGC%) 12 Proposed Equity Raising 16% Contained Graphite (Mt) 10 14% 8 12% NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 10% 6 8
Slide 14: Experienced Board of Directors with an extensive track record
For personal use only Experienced Board of Directors with an extensive track record Jim Askew Over 40 years of international experience as a Director and/or Chief Executive Officer for a wide range of Australian Non‐Executive and international publicly listed mining, mining finance and other minin
Slide 15: Strong management and technical team to deliver Balama
For personal use only Strong management and technical team to deliver Balama Darrin Strange Previously a General Manager for Rio Tinto managing the West Angelas and Robe River iron ore Chief Operating Officer operations 25 years of experience in mining, manufacturing and engineering firms in Aus
Slide 16: Future potential projects
Title For personal use only Future potential projects Spherical Graphite Exports from China(3) Spherical Graphite Facility(1) Internal Economic Assessment (“IEA”) for a Coated Spherical Graphite facility in the United States was completed and released in 35,000 June 2015 NOT FOR DISTRIBUTION OR RE
Slide 17: Balama Graphite Project
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 3. Balama Graphite Project 16
Slide 18: Balama Highlights
For personal use only Balama Highlights 2015 Feasibility Study delivered by Snowden, highlights include(1): JORC Code (2012) Compliant Graphite Ore Reserves(2) would support over 40 years of operations at estimated full production rates NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Simple
Slide 19: Balama Highlights (cont'd)
For personal use only Balama Highlights (cont’d) Key regulatory approvals in place, including Mining Concession, Environmental Licence, Water Licence and Land Access (DUAT) Licence NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Mining concession covers a 25 year period and is renewable for a
Slide 20: Snowden Feasibility Study estimates
For personal use only Snowden Feasibility Study estimates Operational metrics Financial metrics Total initial capex Operational period years 42 US$m 138 (2) (including 10% contingency) NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Assumed weighted average basket (3) (4) Plant feed rate tpa 2,
Slide 21: CPC Engineering Front End Engineering Design (FEED)
For personal use only CPC Engineering Front End Engineering Design (FEED) Discussion Initial capital expenditure estimate (US$m) CPC Engineering has completed a FEED basis of estimate Process plant 63 for the processing plant at Balama NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Site infr
Slide 22: Indicative timeline to production
For personal use only Indicative timeline to production Q1 CY15 Q2 CY15 Q3 CY15 Q4 CY15 Q1 CY16 Q2 CY16 Q3 CY16 Q4 CY16 Q1 CY17 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Snowden Definitive CPC FEED Feasibility Study Pre‐construction works Balama Project Development Financing Detailed engi
Slide 23: Products and marketing: natural graphite overview
For personal use only Products and marketing: natural graphite overview Natural graphite industry overview Total natural graphite demand by market 2014(1) The natural graphite market in 2014 was approximately 645kt Major applications in 2014 were brake linings, foundry operations, NOT FOR DISTRI
Slide 24: Products and marketing: Syrah's product mix
For personal use only Products and marketing: Syrah’s product mix The final graphite concentrate product will be classified into particle size classes as requested by potential customers and under the Offtake Agreement with Chalieco The processing plant has been designed with sufficient flexibil
Slide 25: Products and marketing: Syrah targeting high growth markets
For personal use only Products and marketing: Syrah targeting high growth markets Li‐ion batteries Syrah will target the rising demand for graphite within Li‐ion battery applications − Electric vehicles and energy storage applications are expected to be the key drivers of graphite demand growth −
Slide 26: Offtake Agreement and advanced discussions
For personal use only Offtake Agreement Advanced discussions & Memoranda of Understanding(3) Major European graphite trader Chalieco is an affiliate company of Chinalco, which is Status: Advanced Discussions one of the largest aluminum producers in the world Exclusive 3 year, marketing and off
Slide 27: Mozambique regulatory regime
For personal use only Mozambique regulatory regime Balama Project is subject to the laws of Mozambique Revenue generated from the Balama Project will be subject to certain royalty payments, taxes and levies including: NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES − A royalty rate, current
Slide 28: Infrastructure and Logistics
For personal use only Infrastructure and Logistics Roads Balama Main bitumen road connects Balama to Nacala port Port of Nacala NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Nacala is a major port in Mozambique and the deepest port in southern Africa Ample capacity with a 600m bulk bert
Slide 29: Community and social development
For personal use only Community and social development Syrah was awarded the 2014 Best Social Corporate Responsibility company for its community development activities by the Provincial Government of Cabo Delgado NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Initiatives that have been car
Slide 30: Next steps
For personal use only Next steps Pre‐construction works substantially completed Pre‐construction works substantially completed to facilitate commencement of mine construction NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES − Phase I and II of the farmland relocation plan and land clearing of
Slide 31: Future Potential Projects: Spherical Graphite, Recarburiser, Vanadium
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 4. Future Potential Projects: Spherical Graphite Facility, Recarburiser Products and Vanadium Project 30
Slide 32: Spherical Graphite Overview
For personal use only Spherical Graphite Overview Spherical graphite properties Coated spherical graphite process flowchart Spherical graphite is a physically and chemically altered form of natural graphite and is the optimum product for use in anodes for Li‐ion battery applications NOT FOR DISTRI
Slide 33: Potential Spherical Graphite Facility
For personal use only Potential Spherical Graphite Facility(1) Potential Spherical Graphite Facility Overview Preliminary operational metrics Coated Spherical Graphite production provides a potential future Raw material (‐100 US mesh graphite) downstream option for direct exposure to the growing Li‐
Slide 34: Vanadium industry overview
For personal use only Vanadium industry overview Overview Vanadium production by region (2014)(1) Major uses of vanadium in 2014 were the production of carbon, full‐ Other countries 1% alloy, and high‐strength low‐alloy steels Other vanadium applications: South Africa NOT FOR DISTRIBUTION OR REL
Slide 35: Balama Vanadium Scoping Study
For personal use only Balama Vanadium Scoping Study(1) Balama also contains a JORC Code (2004) Compliant Key Vanadium Scoping Study outcomes Vanadium Resource comprising 1.15Bt Resources at 0.24% Mine life 20 years V2O5 for 2.7Mt of contained vanadium(2) NOT FOR DISTRIBUTION OR RELEASE IN THE UNIT
Slide 36: Appendices
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 5. Appendices 35
Slide 37: A. Company overview
For personal use only A. Company overview Key details(1) Balama project location Shares on issue (as at 30 July 15) 165.2m Options on issue (as at 30 July 15) 6.6m NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Undiluted market capitalisation A$608.0m Balama (Share price of A$3.68 as at 30 Jul
Slide 38: B. Overview of Mozambique
For personal use only B. Overview of Mozambique Key facts Selected resources investments in Mozambique Owner/Operator Commodity Status Population 26.4 million Mining Projects Mozal aluminium smelter BHP Billiton Aluminium Operating NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Official langua
Slide 39: C. JORC Mineral Resources & Ore Reserves
For personal use only C. JORC Mineral Resources & Ore Reserves Balama Graphite (JORC Code 2012) Balama Vanadium (JORC Code 2004) Mineral Resources(1) Mineral Resources(2) Classification Mt TGC (%) Contained Graphite (Mt) Classification Mt V2O5 (%) Contained V2O5 (Mt) NOT FOR DISTRIBUTION OR RELEASE
Slide 40: Competent person statement – Balama Graphite
For personal use only Competent person statement – Balama Graphite The information in this report that relates to Mineral Resources and Ore Reserves is extracted from the report titled “Syrah finalises Balama Graphite study and declares maiden ore reserve” released to the ASX on 29 May 2015 and avai
Slide 41: D. Key risks
For personal use only D. Key risks This section discusses some of the risks associated with an investment in Syrah. Syrah’s business is subject to a number of risk factors both specific to its business and of a general nature which may impact its future performance and forecasts. Before subscribing
Slide 42: Key risks (cont'd)
For personal use only Key risks (cont’d) Mineral Mineral Resources and Ore Reserves are estimates of mineralisation that have reasonable prospects for eventual economical extraction Resources and in the future, as defined by the 2012 Edition of the Australasian Code for Reporting of Exploration Resu
Slide 43: Key risks (cont'd)
For personal use only Key risks (cont’d) Counter party The ability of Syrah to achieve its stated objectives will depend on the performance of the counterparties under the various agreements risk it has. While the Balama licence is held by a 100% owned subsidiary of the Company, there is an explorat
Slide 44: Key risks (cont'd)
For personal use only Key risks (cont’d) Development of Syrah is in the development stage of the Balama Project. The development of any resources project comes with inherent risks, such as Balama Project the risks associated with construction of a mine processing plant and associated infrastructure,
Slide 45: Key risks (cont'd)
For personal use only Key risks (cont’d) Cost inflation Higher than expected inflation rates generally, or specific to the mining industry in particular, could be expected to increase operating and development costs and potentially reduce the value of future project developments. While, in some case
Slide 46: Key risks (cont'd)
For personal use only Key risks (cont’d) Environmental Environmental regulation in the jurisdictions in which Syrah has operations impose significant obligations on companies that conduct the regulation exploration for and mining of commodities. These regulations also cover the processing of ores in
Slide 47: Key risks (cont'd)
For personal use only Key risks (cont’d) Competition from Australian, Canadian, Chinese, Indian, Brazilian and other international graphite producers and explorers may affect the potential Competition future cash flow and earnings which Syrah may realise from its operations. For example, the introdu
Slide 48: Key risks (cont'd)
For personal use only Key risks (cont’d) Syrah is subject to taxation and other imposts in Australia, Mozambique and other jurisdictions in which Syrah has activities, investments and Tax risk exploration interests. Future changes in taxation laws in those countries, including changes in the interpr
Slide 49: Key risks (cont'd)
For personal use only Key risks (cont’d) Insurance risk Syrah maintains insurance coverage as determined appropriate by its board and management, but no assurance can be given that Syrah will continue to be able to obtain such insurance coverage at reasonable rates (or at all), or that any coverage
Slide 50: Key risks (cont'd)
For personal use only Key risks (cont’d) Dividends Any future determination as to the payment of dividends by Syrah will be at the discretion of the Directors and will depend on the financial condition of Syrah, future capital requirements and general business and other factors considered relevant b
Slide 51: E. Foreign Selling Restrictions
For personal use only E. Foreign Selling Restrictions Foreign Selling Restrictions This document does not constitute an offer of entitlements ("Entitlements") or New Shares of the Company in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any pe
Slide 52: Foreign Selling Restrictions (cont'd)
For personal use only Foreign Selling Restrictions (cont’d) Statutory rights of action for damages and rescission Securities legislation in certain of the Provinces may provide purchasers with, in addition to any other rights they may have at law, rights of rescission or to damages, or both, when an
Slide 53: Foreign Selling Restrictions (cont'd)
For personal use only Foreign Selling Restrictions (cont’d) European Economic Area – Germany The information in this document has been prepared on the basis that all offers of Entitlements and New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), a
Slide 54: Foreign Selling Restrictions (cont'd)
For personal use only Foreign Selling Restrictions (cont’d) New Zealand This document has not been registered, filed with or approved by any New Zealand regulatory authority under the Financial Markets Conduct Act 2013 (the "FMC Act"). The Entitlements and the New Shares in the entitlement offer are
Slide 55: Foreign Selling Restrictions (cont'd)
For personal use only Foreign Selling Restrictions (cont’d) Switzerland The Entitlements and the New Shares may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange ("SIX") or on any other stock exchange or regulated trading facility in Switzerland. This document h
Slide 56: Key contacts
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Key contacts Tolga Kumova Office Managing Director Syrah Resources Limited Syrah Resources Limited ASX: SYR Office contact ‐ +61 3 9670 7264 ABN 77 125 242 284 Mobile contact ‐ +61 421 707 155 Level 9, 356 Collins St Melbourn
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