Slide 1: Q1 2023 Quarterly Activities Report
Q1 2023 Quarterly Activities Report 27 April 2023 Shaun Verner – Managing Director & CEO syrahresources.com.au Q1 2023 Quarterly Activities Report Syrah Resources | ASX: SYR1 27 April 2023
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: Our Position
Our Position Syrah is a major ex-China natural graphite and active anode material (AAM) supplier for global customers, with upstream and downstream expansion potential underpinned by its world-class Balama resource Natural graphite and Syrah is the only Balama is a 350ktpa Syrah is building an AAM d
Slide 4: Our Value Proposition
Our Value Proposition Vertical Operating and Cost Position ESG Position Expansion Integration Development Potential ▪ AAM from Vidalia ▪ Largest integrated ▪ Cost competitive ▪ Leading ESG ▪ Significant for battery makers natural graphite AAM supply from standards and downstream and auto OEMs operat
Slide 5: Our ESG Profile
Our ESG Profile Consider new photo to right for solar Best practice Leading ESG standards Low carbon footprint Auditable back to source sustainability frameworks ✓ ISO:45001 and ISO:14001 certification at ✓ Sustainability frameworks guided by: ✓ Independent life cycle assessment (LCA) ✓ Fully integr
Slide 6: Q1 2023 Highlights
Q1 2023 Highlights Health & Safety Balama & Vidalia Market & Corporate – Balama production and C1 cash costs impacted by – Slower global EV sales growth of 32% in 41 kt maximum inventory positions and minor operational issues Q1 2023, versus Q1 2022, to ~2.7 million units2 1.1 Group TRIFR Balama pro
Slide 7: Volatile Chinese anode production in Q1 2023 following outpaced growth in 2022
Volatile Chinese anode production in Q1 2023 following outpaced growth in 2022 Global Monthly EV Sales (‘000 Units)1 Chinese Anode Production (kt per Month)2 1,400 Q1 2023 EV Sales 140 Q1 Chinese Anode Production 1,200 +36% +32% on Q1 2022 120 +32% on Q1 2022 112 1,000 100 +50% 800 80 +10% 600 60 40
Slide 8: Ex-China natural graphite supply into the growing Chinese anode market is critical
Ex-China natural graphite supply into the growing Chinese anode market is critical due to stagnating and seasonal Chinese natural graphite supply Global EV sales1 vs. China AAM production2 China Natural Graphite Production2 vs. China AAM Production2 160 1600 100 160 140 1400 140 80 120 1200 120 100
Slide 9: North American battery market is maturing rapidly
North American battery market is maturing rapidly Location of Planned Battery Manufacturing Capacity in North America North American battery manufacturing capacity1 2022 107 GWh LOCATION: OH LOCATION: TN LOCATION: MI LOCATION: MI LOCATION: Ontario SIZE: 35GWh SIZE: 90GWh ~700kt of AAM SIZE: 40 GWh S
Slide 10: Syrah aims to become a leading supplier of anode products
Syrah aims to become a leading supplier of anode products Our expansion strategy is underpinned by Balama’s world-class resource Vidalia, USA Potential Asia Tolling (>20ktpa) Europe Production Base and Vidalia Further Potential Further Vidalia Vidalia Qualification Vidalia Initial Target Expansion +
Slide 11: Q1 2023: Balama Production and Operations
Q1 2023: Balama Production and Operations ▪ 41kt natural graphite produced at 71% recovery during Q1 2023 – Production constrained by maximum finished product inventory positions – 15kt per month average and 24kt per month maximum daily production run-rated during campaign production runs – Operatio
Slide 12: Q1 2023: Balama Production and Operations
Q1 2023: Balama Production and Operations Natural Graphite Production (kt) Product Mix (% Fines) 87% 91% 46 44 83% 83% 83% 38 41 35 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2022 2022 2022 2022 2023 2022 2022 2022 2022 2023 Plant Recovery C1 Costs (US$/t2) 82% 80% 709 668 76% 78% 71% 615 76%1 543 464 Q1 Q2 Q3 Q
Slide 13: Balama is the largest natural graphite mining & processing operation globally
Balama is the largest natural graphite mining & processing operation globally Ex-China Natural Graphite Reserves and Reserve Grade 1 BALAMA 25.0 CUT-OFF GRADE2 Africa North America 20.0 Other Contained Graphite Reserves (Mt) 15.0 BALAMA (7.2% TGC CUT-OFF GRADE)2 Asset Overview 10.0 Location Southern
Slide 14: Q1 2023: Balama Sales and Marketing
Q1 2023: Balama Sales and Marketing ▪ 30kt natural graphite sold and shipped – Lower than anticipated fines product sales to Chinese anode customers and increased unsold finished product inventory at quarter end – Volatile sales order performance – No constraints in container and breakbulk vessel av
Slide 15: Vidalia 45ktpa AAM facility DFS illustrates compelling economics
Vidalia 45ktpa AAM facility DFS illustrates compelling economics at realistic AAM prices1 Vidalia Further Expansion Project Parameters Operating Margin (US$/kg AAM, real) Facility Economics5 Observable Spot Natural Graphite AAM price AAM Prices3: US$5.00 – 7.00/kg (2023 real) 45 ktpa 75 ktpa ~$6.53/
Slide 16: Q1 2023: Vidalia
Q1 2023: Vidalia Customer Engagement and Product Qualification ▪ Offtake agreement with Tesla to supply 8ktpa AAM from Vidalia at a fixed price for an initial term of four years1 – final AAM specifications agreed2 ▪ Further Tesla offtake agreement for an additional 17ktpa AAM under negotiation, for
Slide 17: Q1 2023: Vidalia
Q1 2023: Vidalia Vidalia Further Expansion (45ktpa AAM Facility) ▪ Demand for Vidalia AAM expected to significantly exceed 11.25ktpa ▪ DFS confirms expansion of Vidalia’s production capacity to 45ktpa AAM, inclusive of 11.25ktpa AAM is technically viable, financially robust and has compelling econom
Slide 18: 11.25ktpa AAM Vidalia facility offers competitive operational metrics
11.25ktpa AAM Vidalia facility offers competitive operational metrics Vidalia Initial Expansion Project Parameters Operating Margin (US$/kg AAM, real) Global Warming Potential (kg CO2 eqv./kg AAM)4 Observable Spot Natural Graphite AAM Prices2: Vidalia 7.3 11.25 ktpa 21 ktpa ~$6.53/kg AAM Natural gra
Slide 19: Vidalia Initial Expansion
Vidalia Initial Expansion Key Project Milestones Achieved Defined Schedule to 11.25ktpa AAM Production at Vidalia Offtake Final Construction Construction Start of 11.25ktpa AAM Agreement Investment on Schedule Completion and Production Run-rate Decision Commissioning Production Dec 2021 Feb 2022 Q1
Slide 20: AustralianSuper New Convertible Notes
AustralianSuper New Convertible Notes Key Terms1 Process ▪ Series 4 Note: A$50m (US$33m2) to be issued by 12 May 2023. ▪ General Meeting proposed in mid to late July 2023 to vote on the Maximum issue size ▪ Series 5 Note: A$50m (US$33m2) issuable at Syrah’s option before 31 December 2023, subject to
Slide 21: Vertically integrated supply chain underpins Syrah strategy
Vertically integrated supply chain underpins Syrah strategy Syrah’s vision is to be the world’s leading supplier of superior quality graphite and anode material products, working closely with customers and the supply chain to add value in battery and industrial markets Sites/Location Balama Graphite
Slide 22: Syrah is a near-term AAM supply option for USA and European markets
Syrah is a near-term AAM supply option for USA and European markets Vidalia AAM Facility Export Market and European AAM Facility ▪ Establishing US-based AAM ▪ Potential for AAM exports from Vidalia to Europe supply ▪ Potential European AAM facility vertically integrated ▪ Vertically integrated with
Slide 23: Q2 2023 outlook
Q2 2023 outlook End-market growth ‒ Volatile near-term Chinese anode market conditions / customer sales order performance in contrast to strong medium and long-term outlook for ex-China AAM demand Balama production and costs ‒ Optimising Balama sales and operations through near-term Chinese anode ma
Slide 24: Appendix
Appendix Q1 2023 Quarterly Activities Report Photo: Balama Ore 24
Slide 25: New Convertible Notes overview
New Convertible Notes overview1 • Unsecured Security and status • Prior to conversion, the Convertible Notes will rank equally with all other unsecured and unsubordinated debt obligations of Syrah including with Series 1 and Series 3 Notes. Maximum issue size / • Series 4 Note: A$50m (US$33m2). face
Slide 26: New Convertible Notes overview (cont'd)
New Convertible Notes overview (cont’d)1 • At any time after 12 November 2025 and up to the maturity date, AustralianSuper may elect to convert the New Convertible Notes issued into fully paid ordinary shares of Syrah, at the Conversion Price. • After 12 November 2025, if AustralianSuper elects to c
Slide 27: New Convertible Notes overview (cont'd)
New Convertible Notes overview (cont’d)1 • Syrah and AustralianSuper give customary representations and warranties including in relation to registration, power and capacity, solvency, authorisations, compliance with law, ranking, capital structure, accuracy of information and no litigation (as appli
Slide 28: Battery and natural graphite fines demand is in the early stages of growth
Battery and natural graphite fines (-100mesh) demand is in the early stages of growth – driven by EV adoption Global EV Sales (Millions) Lithium-ion Battery Capacity (GWh) Natural Graphite Demand (kt) 100 90% 8,000 8,000 90 80% 7,000 7,000 80 70% 6,000 6,000 70 60% 5,000 5,000 60 50% 50 4,000 4,000
Slide 29: 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 Batteries1 Natural Graphite Demand for Batteries2 100% 2023 Silicon LTO Other 4% 0% 0% MCMB 0% Natural 35% Metal Composition % Mass Synthetic
Slide 30: Syrah's global business to supply growing battery anode demand
Syrah’s global business to supply growing battery anode demand Vidalia, Louisiana, USA Balama, Cabo Delgado Province, Mozambique Sales and Marketing Hub, Dubai, UAE Contract Sales Liaison, Shanghai, China Corporate Office, Melbourne, Australia Q1 2023 Quarterly Activities Report 30