Syrah Resources Limited · ASX:SYR
Syrah Resources — Investor Presentation (September 2017)
49 slides from Syrah Resources's investor presentation, Sep 19, 2017
Slide 1: Equity Capital Raising Presentation
For personal use only Equity Capital Raising Presentation September 2017 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Important notice and disclaimer
Important notice and disclaimer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES IMPORTANT: You must read the following before continuing. This presentation has been prepared by Syrah Resources Limited (ABN 77 125 242 284) (and / or its subsidiaries, as the context requires
Slide 3: Important notice and disclaimer
Important notice and disclaimer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 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 vie
Slide 4: Important notice and disclaimer
Important notice and disclaimer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Effect of rounding A number of figures, amounts, percentages, estimates, calculations of value and fractions in this presentation are subject to the effect of rounding. Accordingly, the actual
Slide 5: Important notice and disclaimer
Important notice and disclaimer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriters and advisors None of the underwriters, nor any of its or the Company’s respective advisers or any of their respective affiliates, related bodies corporate, directors, officers, par
Slide 6: Table of contents
Table of contents For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1. Offer Details 2. Balama Graphite Project Overview 3. Battery Anode Material (BAM) 4. Appendices 55
Slide 7: Currently on track for first production in late October 2017
Company update For personal use only Currently on track for first production in late October 2017 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - - First ore through primary crushing circuit achieved during September 2017 - Commissioning underway and progressing to plan(1) Balama Graphite Pro
Slide 8: Offer Details
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Offer Details 77
Slide 9: Offer overview
Offer overview For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Equity raising of approximately A$110 million via: - 1 for 10.5 fully underwritten pro-rata accelerated non-renounceable Entitlement Offer at A$3.38 per New Share to raise Offer size and approximately A$85 mi
Slide 10: Sources and uses of proceeds
Sources and uses of proceeds For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Sources US$m(1) A$m Estimated uses US$m(1) A$m Syrah cash at bank at 31 August 2017 77 96 Balama Project development(2) 31 39 Balama Project working capital and Net proceeds of Offer 85 106 70 87
Slide 11: Offer timetable
Offer timetable For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Event Date Trading Halt and Announcement of Capital Raising Tuesday, 19 September 2017 (Pre-market open) Placement and Institutional Entitlement Offer Opens Tuesday, 19 September 2017 Placement and Institution
Slide 12: Investment highlights
Investment highlights For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Balama is expected to be the largest natural graphite mine globally as measured by annual flake concentrate production from 2018 First mover advantage - Syrah is the only listed company with a major gr
Slide 13: Balama Graphite Project Overview
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Balama Graphite Project Overview 12 12
Slide 14: Balama Graphite Project – a Tier 1 asset
Balama Graphite Project – a Tier 1 asset For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Reserves and - Reserves(1): 114.5Mt at 16.6% Total Graphitic Carbon (TGC) - 18.9Mt of contained graphite Resources - Resources(1): 1,191Mt at 11.0% TGC - 128.5Mt of contained graphite
Slide 15: Balama has the largest defined graphite reserve and is the only major listed graphite project in construction
Syrah’s Balama deposit has the largest defined graphite reserve and is the only major listed graphite project in construction For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Graphite Reserves 160 Syrah Resources’ low-grade stockpiles at 2 – 9% TGC will be greater than most
Slide 16: Balama Graphite Project is significantly de-risked, with construction nearing completion
Balama Graphite Project is significantly de-risked, with construction nearing completion For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Project construction is materially complete and plant commissioning currently underway - Currently on track for first production in la
Slide 17: Project construction and commissioning update
Project construction and commissioning update For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Commissioning underway - First ore through primary crushing circuit achieved during September 2017 - First production forecast for late October 2017 (flake graphite) and Novembe
Slide 18: Project construction and commissioning update (cont.)
Project construction and commissioning update (cont.) For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Clockwise from top left: Primary crusher; Flotation; Ore bin conveyer; Power station. 17 17 17
Slide 19: Syrah expects to be a first quartile cash cost producer
Syrah expects to be a first quartile cash cost producer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Flake Graphite Cost Curve(1) Syrah expects to be in the first quartile of the global cost curve - Cash operating cost(2) target of <US$400 per tonne in Year 1(3) with ex
Slide 20: Balama – Mining Agreement
Balama – Mining Agreement For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Negotiation of a Mining Agreement has been finalised with the Ministry of Mineral Resources and Energy of the Republic of Mozambique following its Mining approval at the Council of Ministers weekly
Slide 21: As the battery market grows Syrah will seek to balance its sales book towards the battery market
As the battery market grows Syrah will seek to balance its sales book towards the battery market For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Existing contractual arrangements provide sufficient flexibility to cover Year 1 production(1) Volume per Term of Flake Graphite
Slide 22: Battery Anode Material (BAM)
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Battery Anode Material (BAM) - Strategy - Commercialisation of Qualification Plant 21 21
Slide 23: Lithium-ion battery supply chain
Lithium-ion battery supply chain For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES - Opportunity for Syrah to capture additional margin in the battery value chain through BAM production Balama Flake Graphite Production Graphite 1 Flake Graphite Ore 2 Concentrate BAM Producti
Slide 24: Scale, quality and production cost are expected to enable Syrah's BAM strategy
Scale, quality and production cost are expected to enable Syrah’s BAM strategy and establish a first mover advantage For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Battery Anode Material: competitive advantage enablers 1 Unprecedented capacity 2 High grade concentrate 3 L
Slide 25: Syrah is pursuing a BAM strategy to establish a first mover advantage
Syrah is pursuing a BAM strategy to establish a first mover advantage & maximise value For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Market Strategy Value Outlook for new demand from electric Develop BAM that optimises value, Higher margins increase our value vehicles is
Slide 26: BAM project
BAM project For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Feedstock - High purity flake graphite concentrate from Balama (-100 mesh size material) Processing capacity - Planned milling and purification capacity of 10kt per annum(1) and product mix - Optionality to produc
Slide 27: Incremental BAM investment accelerates commercial production
Incremental BAM investment accelerates commercial production and is expected to enhance product options For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Previous plan Current plan Up to 16ktpa BAM production(1) Qualification of battery anode material Production + Capacity O
Slide 28: Expected to provide global baseload of supply of flake graphite
Expected to provide global baseload of supply of flake graphite and expected to service all key battery markets For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 1 2 3 Flake graphite into key Battery Anode Material Flake graphite and BAM battery anode markets of for USA and
Slide 29: Appendices
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Appendices 28 28
Slide 30: Syrah Resources' Vision and Values
Syrah Resources’ Vision and Values For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Vision & Values Syrah’s vision is to be the leading supplier of superior quality graphite products, working closely with our customers and supply chain to innovate and bring enhanced value t
Slide 31: Board of directors and executive management team
Board of directors and executive management team For personal use only Board NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Jim Askew Shaun Verner Sam Riggall Dr. Christina Lampe- Rhett Brans José Caldeira Non-Executive Managing Director & Non-Executive Director Onnerud Non-Executive Director
Slide 32: JORC Mineral Resources and Ore Reserves
JORC Mineral Resources and Ore Reserves For personal use only Balama Graphite (JORC Code 2012) – as at 15 November 2016 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Mineral Resources Ore Reserves Contained Contained Classification Mt TGC (%) Classification Mt TGC (%) Graphite (Mt) Graphite (
Slide 33: Key Risks
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only Key Risks 32 32
Slide 34: Key Risks
Key Risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES The below table sets out key risks to be considered in relation to investment in Syrah. References below to “Syrah” or “the Company” include Syrah Resources Limited and its subsidiaries (unless the context requires
Slide 35: Key Risks
Key Risks For personal use only Mineral Resources and Ore Reserves are estimates of mineralisation that have reasonable prospects for eventual economical extraction NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Mineral Resources and in the future, as defined by the 2012 Edition of the Austral
Slide 36: Key Risks
Key Risks For personal use only The ability of Syrah to achieve its stated objectives will depend on the performance of contractual counterparties. NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Counterparty risk (including risks Syrah has entered into certain offtake and other sale, marketing
Slide 37: Key Risks
Key Risks For personal use only Construction of the Balama Project is materially complete and commissioning in process. The final stages of construction and the NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Construction and commissioning commissioning process (including, for example, the comm
Slide 38: Key Risks
Key Risks For personal use only There is a risk that unforeseen geological or geotechnical issues may be encountered when developing and mining Ore Reserves, such NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Geological and geotechnical risks as unusual or unexpected geological conditions, pi
Slide 39: Key Risks
Key Risks For personal use only Environmental regulation in the jurisdictions in which Syrah has operations impose significant obligations on companies that conduct NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Environmental regulation the exploration for and mining of commodities. These regu
Slide 40: Key Risks
Key Risks For personal use only Syrah’s mining activities may cause issues or concerns with the local community in connection with, among other things, the potential NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Community effect on the environment as well as other social impacts relating to e
Slide 41: Key Risks
Key Risks For personal use only Syrah’s operations could be adversely affected by government actions in Mozambique or other countries or jurisdictions in which it has NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Government actions operational exposures or investment or exploration interests.
Slide 42: Key Risks
Key Risks For personal use only Syrah is subject to taxation and other imposts in Australia, Mozambique, the USA and the UAE, as well as other jurisdictions in which NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Tax and customs risk Syrah has activities and investments. Changes in taxation la
Slide 43: Key Risks
Key Risks For personal use only The maintaining of tenements, obtaining renewals, and grant of tenements or permits (including for both construction and mining NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Security of tenure operations) depends on Syrah being successful in obtaining statutory
Slide 44: Key Risks
Key Risks For personal use only Investors should note that if they do not take up all of their entitlement under the Entitlement Offer, then their percentage NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Risk of dilution shareholding in Syrah will be diluted to a greater extent than would be
Slide 45: International Selling Restrictions
NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES For personal use only International Selling Restrictions 44 44
Slide 46: International Selling Restrictions
International Selling Restrictions For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International Selling Restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of the Company in any jurisdiction in which it would be unlawful. In parti
Slide 47: International Selling Restrictions
International Selling Restrictions For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 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 New Shares
Slide 48: International Selling Restrictions
International Selling Restrictions For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Switzerland 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
Slide 49: Key Contacts
Key Contacts For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Key contacts Nova Young Syrah Resources Limited Syrah Resources Limited ASX: SYR Contact – +61 422 575 530 ABN 77 125 242 284 Email – n.young@syrahresources.com.au Level 28, 360 Collins St Melbourne VIC Phone: +6
Syrah Resources — Investor Presentation (September 2017) on 6ix