Syrah Resources Limited · ASX:SYR
Syrah Resources — Q2 2023 Earnings Presentation
28 slides from Syrah Resources's earnings presentation, Jul 18, 2023
Slide 1: Q2 2023 Quarterly Activities Report
Q2 2023 Quarterly Activities Report 18 July 2023 Shaun Verner – Managing Director & CEO syrahresources.com.au Q2 2023 Quarterly Activities Report Syrah Resources | ASX: SYR1 18 July 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: Q2 2023 Highlights
Q2 2023 Highlights Health & Safety Balama & Vidalia Market & Corporate – Balama production constrained by maximum inventory – Global EV sales in Q2 2023 up 55% 15 kt positions and lower sales; production paused in May and June 2023 compared to Q2 2022 to ~3.4 million units5 1.3 Group TRIFR Balama pr
Slide 7: Improving Chinese anode production in Q2 2023
Improving Chinese anode production in Q2 2023 Global Monthly EV Sales (‘000 Units)1 Chinese Anode Production (kt per Month)2 140 1,400 Q2 2023 EV Sales 140 Q2 Chinese Anode Production 1,200 +38% +62% +34% +55% on Q2 2022 120 +23% on Q2 2022 +78% 1,000 100 +50% 800 80 +9% 600 60 400 40 200 20 0 0 Sep
Slide 8: Ex-China natural graphite supply critical for growing Chinese anode market
Ex-China natural graphite supply critical for growing Chinese anode market Global EV sales1 vs. China AAM production2 China Natural Graphite Production2 vs. China AAM Production2 160 1,600 160 140 1,400 140 120 1,200 120 100 1,000 100 80 80 800 60 60 600 40 40 400 20 20 200 0 Jun-20 Jun-22 Apr-20 De
Slide 9: Natural graphite AAM market will be under supplied
Natural graphite AAM market will be under supplied Supply Demand Balances for natural and synthetic graphite AAM 1. Source: Benchmark Mineral Intelligence, June 2023. Q2 2023 Quarterly Activities Report 9
Slide 10: 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 11: 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 12: Q2 2023: Balama Production and Operations
Q2 2023: Balama Production and Operations ▪ 15kt natural graphite produced at 78% recovery during April 2023 – Production constrained to ~50% capacity by maximum finished product inventory positions – Higher recovery and quality compared to Q1 2023 ▪ Balama production paused in May and June 2023 to
Slide 13: Q2 2023: Balama Production and Operations
Q2 2023: Balama Production and Operations Plant operations and production paused in May and June 2023 Natural Graphite Production (kt) Product Mix (% Fines) 87% 91% 91% 83% 83% 44 41 38 35 15 Q2 Q3 Q4 Q1 April Q2 Q3 Q4 Q1 April 2022 2022 2022 2023 2023 2022 2022 2022 2023 2023 Plant Recovery C1 Cost
Slide 14: 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 15: Q2 2023: Balama Sales and Marketing
Q2 2023: Balama Sales and Marketing ▪ 15kt natural graphite sold and shipped to 3rd party customers – Significantly lower sales to Chinese anode customers, due to AAM inventory overhang, and strong coarse flake demand – No breakbulk shipments and good availability in container shipping capacity ▪ 2k
Slide 16: Syrah's sales strategy for Balama natural graphite products
Syrah’s sales strategy for Balama natural graphite products Balama will be a ‘market critical’ supplier of fines natural graphite to emerging ex-China customers ▪ USA and European demand for diversification of AAM Ex-China merchant natural graphite anode processing hubs sourcing ex-China is accelera
Slide 17: Q2 2023: Vidalia
Q2 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 ▪ Progressing further Tesla offtake agreement for an additional 17ktpa AAM, for a tota
Slide 18: Q2 2023: Vidalia
Q2 2023: Vidalia Vidalia Further Expansion (45ktpa AAM Facility) ▪ DFS confirms expansion of Vidalia’s production capacity to 45ktpa AAM, inclusive of 11.25ktpa AAM is technically viable, financially robust and has compelling economics ▪ Commenced early activities on Vidalia Further Expansion to mai
Slide 19: 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 $5.85/kg AAM Natural grap
Slide 20: Vidalia Initial Expansion
Vidalia Initial Expansion Key Project Milestones Achieved Defined Schedule to 11.25ktpa AAM Production at Vidalia Offtake Final Mechanical Start of 11.25ktpa AAM Agreement Investment Completion and Production Run-rate Construction Decision Commissioning Production Dec 2021 Feb 2022 Q2 2023 Q4 2023 Q
Slide 21: Vidalia 45ktpa AAM facility DFS illustrates compelling economics at realistic AAM prices
Vidalia 45ktpa AAM facility DFS illustrates compelling economics at realistic AAM prices1 Vidalia Further Expansion Project Parameters Operating Margin (US$/kg AAM, real) Facility Economics5 Observable spot natural graphite AAM AAM price Prices3: US$5.00 – 7.00/kg (2023 real) 45 ktpa 75 ktpa $5.85/k
Slide 22: 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 23: 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/Middle Eastern AAM Facility ▪ Establishing US-based AAM ▪ Potential for AAM exports from Vidalia to Europe supply ▪ Potential European or Middle Eastern AAM facility ▪ Vertically integ
Slide 24: Q3 2023 outlook
Q3 2023 outlook End-market growth ‒ Volatile near-term Chinese anode market conditions in contrast to strong medium and long-term outlook for ex-China AAM demand Balama production and costs ‒ Implementing dynamic operating mode and other cost saving initiatives for lower production volumes through n
Slide 25: Appendix
Appendix Q2 2023 Quarterly Activities Report 25
Slide 26: 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 27: 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 28: 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 Q2 2023 Quarterly Activities Report 28