Syrah Resources Limited · ASX:SYR
Syrah Resources — Investor Presentation (February 2022)
61 slides from Syrah Resources's investor presentation, Feb 7, 2022
Slide 1: Vidalia Final Investment Decision and Equity Capital Raising
Vidalia Final Investment Decision and Equity Capital Raising 7 February 2022 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES -
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Important notice and disclaimer Investor Relations IMPORTANT: You must read the following carefully before continuing or m
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES JORC Reporting (cont’d) Information contained in this presentation describing mineral deposits may not be comparable to si
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Non-IFRS financial measures Any pro forma financial information included in this presentation has been prepared by the Com
Slide 5: Important Notice and Disclaimer
Important Notice and Disclaimer NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Not an offer This presentation is not and should not be considered an offer or an invitation to acquire, or a solicitation
Slide 6: Syrah's Value Proposition
Syrah’s Value Proposition NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Electric Vehicles require graphite ● Electric Vehicle (“EV”) adoption is gaining momentum ● Anodes in lithium-ion batteries used in EVs are made of graphite Syrah’s vision is to be the Graphite is a st
Slide 7: Syrah's Positive ESG Profile
Syrah’s Positive ESG Profile NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ISO:45001 and ISO:14001 certification at Balama ISO:9001 certification at Vidalia Leading ESG standards Vidalia expansion project being developed in line with best practice health, safety and
Slide 8: Table of Contents
Table of Contents NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Company Update and Equity Raising Overview 9 Vidalia Final Investment Decision 14 Market and Supply Chain Update 23 Balama Graphite Operation 29 Debt Financing 37 Transaction Details 39 Key Risks 42 Internatio
Slide 9: Company Update and Equity Raising Overview
Company Update and Equity Raising Overview 9
Slide 10: Syrah is progressing to become a vertically integrated natural graphite AAM supply alternative
Company Update Syrah is progressing to become a vertically integrated natural graphite AAM supply alternative for USA and European customers NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Health and Safety • Total Recordable Injury Frequency Rate (“TRIFR”) of 0.5 for Balama
Slide 11: Equity Raising Overview and Debt Financing Progress
Equity Raising Overview and Debt Financing Progress NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES • Syrah is undertaking a fully underwritten equity raising of ~A$250m consisting of an institutional placement of A$125m (the “Placement”) and a 1 for 5.9 pro-rata accelerated
Slide 12: Sources and Uses
Sources and Uses NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Overview Sources and Uses1 • A$232m (US$165m)2,3 of Offer proceeds and existing cash, expected to fund all Sources A$m US$m estimated remaining installed capital costs for the Vidalia Initial Expansion ‒ Includ
Slide 13: Fully Funded 11.25ktpa AAM Vidalia Facility To Start of Production
Fully Funded 11.25ktpa AAM Vidalia Facility To Start of Production NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES • Syrah has received all required approvals to begin construction of the Vidalia Initial Expansion project • Detailed engineering on the Vidalia Initial Expansi
Slide 14: Vidalia Final Investment Decision
Vidalia Final Investment Decision 14
Slide 15: Vidalia FID paves way to Syrah becoming an integrated natural graphite AAM producer
Vidalia FID paves way to Syrah becoming an integrated natural graphite AAM producer for battery supply chain participant and OEM customers NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES 2020 2021 2022 US$79m capital invested in Vidalia1 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Product Qualific
Slide 16: Syrah has significantly advanced detailed engineering and long-lead equipment procurement
Syrah has significantly advanced detailed engineering and long-lead equipment procurement NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES • Bankable Feasibility Study on the Vidalia Initial Expansion was completed in December 20201 • Subsequently, Syrah has completed front-e
Slide 17: Updated Vidalia Initial Expansion project parameters
Updated Vidalia Initial Expansion project parameters NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Vidalia Initial Expansion Project Parameters • Updated estimate of maximum production capacity, operating costs and installed 2020 2022 capital costs for the Vidalia Initial
Slide 18: Vidalia Initial Expansion estimated installed capital costs
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Vidalia Initial Expansion estimated installed capital costs Installed Capital Costs for the Vidalia Initial Expansion Project (US$m)1 • Updated installed capital costs estimate for the Vidalia Initial Expansion project to impro
Slide 19: Vidalia is expected to exhibit robust operating margins
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Vidalia is expected to exhibit robust operating margins • 11.25ktpa AAM Vidalia facility is expected Operating Cost Estimate (All-in) for 11.25ktpa AAM Vidalia Facility (US$/t AAM Real)1 to exhibit a competitive operating cost
Slide 20: Vidalia Initial Expansion construction and production timetable
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Vidalia Initial Expansion construction and production timetable Key Steps in Construction Ongoing Activities • Order critical long-lead items <2 Years • Execute construction contracts sequentially • • Product development and te
Slide 21: Vidalia FID underpinned by contracted volumes and defined strategy for uncontracted volumes
Vidalia FID underpinned by contracted volumes and defined strategy for uncontracted volumes NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Vidalia Offtake Strategy Vidalia to supply USA and European customers • Offtake agreement with Tesla for 8ktpa AAM, at a fixed price, f
Slide 22: Syrah's long term vision is to become a leading supplier of value-added anode products
Syrah’s long term vision is to become a leading supplier of value-added anode products for the rapidly growing global battery supply chain NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES AAM Vidalia, USA Production Potential2 Asia Tolling (>20ktpa) Base Vidalia FID Taken Eur
Slide 23: Market and Supply Chain Update
Market and Supply Chain Update 23
Slide 24: 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 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Battery Mineral Composition of Batteries Natural Graphite Demand for Batteries 2020 100% Silicon LTO O
Slide 25: EV sales and anode volumes have continued to strengthen
EV sales and anode volumes have continued to strengthen NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Global EV Sales (‘000 Units) Chinese Anode Production (kt) 2021: +119% pcp 67 71 +61% 59 58 59 60 58 +94% 51 52 54 46 44 47 42 41 41 38 31 700 +100% +90% 23 24 23 27 19 13
Slide 26: Estimated battery manufacturing capacity is expected to rapidly increase across key regions
Estimated battery manufacturing capacity is expected to rapidly increase across key regions, with substantial localised anode material supply required NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Estimated Battery Manufacturing Capacity Pipeline (GWh)1,2 Graphite Battery
Slide 27: USA battery market is maturing rapidly to support a large-scale EV manufacturing base
USA battery market is maturing rapidly to support a large-scale EV manufacturing base in the region NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Location of Planned Battery Manufacturing Capacity in USA Planned Battery Manufacturing Capacity in USA1 North American share o
Slide 28: Vertical integration through to AAM in USA will be a key differentiator for Syrah
Vertical integration through to AAM in USA will be a key differentiator for Syrah as the market matures NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Balama Graphite Operation1 Vidalia AAM Project2 Sites / Location Benefits of vertical integration to Syrah: Margin captur
Slide 29: Balama Graphite Operation
Balama Graphite Operation 29
Slide 30: Q4 2021: Balama Production and Operations
Q4 2021: Balama Production and Operations NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES • December 2021 quarter production constrained by maximum inventory positions and container shipping market disr
Slide 31: Q4 2021: Balama Production and Operations
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Q4 2021: Balama Production and Operations NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Natural Graphite Production (kt) Product Mix (% Fines) Before temporary Before temporary suspension of productio
Slide 32: Balama is the largest natural graphite mining/processing operation globally
Balama is the largest natural graphite mining/processing operation globally NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Asset Overview Ex-China Natural Graphite Reserves4 Location Southern Cabo Delgado Province, Mozambique Operations 150 Reserve & 108Mt (16% TGC) Graphit
Slide 33: Q4 2021: Balama Sales and Marketing
Q4 2021: Balama Sales and Marketing NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES • Sold and shipped 19kt natural graphite and all 20kt finished product inventory contracted to customers • Unprecedent
Slide 34: Syrah has developed a major additional export option in breakbulk shipments through Pemba port
Syrah has developed a major additional export option in breakbulk shipments through Pemba port NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Whilst Syrah expects container shipping availability to improve, a major new logistics option has been developed to commence break
Slide 35: China domestic graphite fines price has increased
China domestic graphite fines price has increased due to Chinese supply disruptions and strong demand flowing through the supply chain NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES A constructive market is supporting increasing China domestic Natural Graphite Fines Price
Slide 36: Balama products have a strong track record of customer acceptance
Balama products have a strong track record of customer acceptance across customer geographies NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Bubble size = 2018–2021 natural graphite tonnes sold into each geography. Total 311kt natural Key considerations in customer graphite
Slide 37: Debt Financing
Debt Financing mN SYRAH RESOURCES
Slide 38: U.S. Government Debt Financing
U.S. Government Debt Financing NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES U.S. DoE ATVM1 Loan Program debt financing U.S. International DFC2 debt financing • Authority to loan up to US$17.7 billion to support US-based manufacturing of • U.S. Government's development fin
Slide 39: Transaction Details
Transaction Details | SYRAH RESOURCES 39
Slide 40: Equity Raising Overview
Equity Raising Overview • Syrah is undertaking a fully underwritten equity raising of ~A$250m (the “Offer” or the “Equity Raising”) consisting of the following: NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ‒ A fully underwritten Placement of new fully paid ordinary shares
Slide 41: Equity Raising Timetable
Equity Raising Timetable NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Indicative Timetable1 Event Date Announcement of Offer Monday, 7 February 2022 Trading Halt Monday, 7 February 2022 Institutional Entitlement Offer and Placement opens Monday, 7 February 2022 Institutio
Slide 42: Key risks
NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Key risks Photo: Balama Ore 42
Slide 43: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES This section discusses some of the key risks associated with any investment in Syrah, which may affect the value of Syrah shares. The risks set out below are not necessarily listed in order KEY RISKS OVERVIEW of impor
Slide 44: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES MINERAL RESOURCES Mineral Resources and Ore Reserves are estimates of mineralisation that have reasonable prospects for eventual economic extraction in the future, as defined by the 2012 Edition of the AND ORE RESERVE
Slide 45: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES LIQUIDITY AND Details of the sources and uses of the funds to be raised under the Offer are set out on page 12 of this presentation. The funds raised under the Offer, together with Syrah’s existing cash CAPITAL reserv
Slide 46: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES COVID-19 PANDEMIC The outbreak in late 2019 of a novel strain of coronavirus (“COVID-19”) has triggered a global downturn and global economic contraction, causing disruptions in demand and supply chains. On 11 March 2
Slide 47: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES COST INFLATION Higher than expected inflation rates generally, specific to the mining industry, or specific to the countries where Syrah operates or sources supplies, could be expected to increase operating and capita
Slide 48: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES ENVIRONMENTAL Environmental regulations in the jurisdictions in which Syrah has operations impose significant obligations on companies that conduct the exploration for and mining of commodities, or MATTERS industrial
Slide 49: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES CLIMATE CHANGE The impacts of climate change may affect Syrah’s operations and the markets in which the Company sells its Products through regulatory changes, technological advances and other market/economic responses
Slide 50: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES SOVEREIGN/POLITICAL Syrah’s operations could be affected by political instability in Australia, Mozambique, the USA, UAE or China or other countries or jurisdictions in which it has operations, investment RISK, WAR AN
Slide 51: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES REGULATORY RISK Syrah’s businesses are subject to, in each of the countries in which it operates, or the countries into which it sells its Products or receives supplies, various national and local laws and regulations
Slide 52: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES KEY PERSONNEL AND Syrah has a number of key management personnel on whom it depends to manage and run its business. From time to time, Syrah will require additional key personnel or operational staff, LABOUR MARKET RI
Slide 53: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES LITIGATION Syrah may be involved in claims, litigation and disputes from time to time including in relation to contractual disputes, native title claims, tenure disputes, environmental claims, occupational health and
Slide 54: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES UNDERWRITING RISK Syrah has entered into an underwriting agreement with Merrill Lynch Equities (Australia) Limited (“Lead Manager”). The Lead Manager has agreed to act as sole lead manager and underwriter in relation
Slide 55: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES UNDERWRITING RISK • a certificate which is required to be furnished by Syrah under the underwriting agreement is not furnished when required or a statement in that certificate is untrue, incorrect or misleading or dec
Slide 56: Key risks
Key risks NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES UNDERWRITING RISK The ability of the Lead Manager to terminate the underwriting agreement in respect of the events set out above, in some cases, is limited to circumstances where, in the reasonable opinion of the Unde
Slide 57: International Offer Restrictions
International Offer Restrictions 57 Photo: Balama flotation
Slide 58: International Offer Restrictions
International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES International Offer 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 particular,
Slide 59: International Offer Restrictions
International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Hong Kong WARNING: This document has not been, and will not be, registered as a prospectus under the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong, nor has
Slide 60: International Offer Restrictions
International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES Singapore This document and any other materials relating to the New Shares have not been, and will not be, lodged or registered as a prospectus in Singapore with the Monetary Authority of Singap
Slide 61: International Offer Restrictions
International offer restrictions NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES United States This document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The New Shares have not been, and will not be, registered
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