Slide 1: Equity Capital Raising Presentation
For personal use only Equity Capital Raising Presentation 4 September 2018 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 0 0
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 Non-IFRS Financial Measures Investors should also be aware that certain financial data included in this presentation may be "non‐IFRS financial information" under Regulatory Guide 230 Disclosin
Slide 4: Important notice and disclaimer
Important notice and disclaimer For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 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 par
Slide 5: Table of contents
Table of contents For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Company update 5 Investment highlights 7 Balama Graphite Operation ramp-up update 8 Sales and marketing 14 Battery Anode Material (BAM) strategy 18 Vanadium opportunity progression 23 Offer details 25 Key ri
Slide 6: For personal use only
Company update For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • The ramp-up and de-risking of Balama is well advanced (1) • Balama is on track to achieve CY2018 production guidance of 135kt to 145kt(2), enabled by significant month on month production performance improvem
Slide 7: For personal use only
Company update For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Balama contains a significant vanadium Resource which presents a potential value-accretive opportunity that Syrah will advance through near term studies Vanadium • Consultant has been appointed to undertake a
Slide 8: Investment highlights
Investment highlights For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Long life asset, with over 50 years of mine life(1) and 350kt per year of graphite concentrate production capability(2) • Balama is the largest natural graphite mine globally as measured by annual flak
Slide 9: Balama Graphite Operation ramp-up update
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Balama Graphite Operation ramp-up update 8
Slide 10: Balama Graphite Operation – a Tier 1 producing asset
Balama Graphite Operation – a Tier 1 producing asset For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Location • Mozambique (Cabo Delgado Province) Reserves and • Graphite Reserves(1): 114.5Mt at 16.6% Total Graphitic Carbon (TGC) - 18.9Mt of contained graphite Resources •
Slide 11: Ramp-up of the world's largest graphite mine accelerating
Ramp-up of the world’s largest graphite mine accelerating For personal use only • Strong safety record with Total Recordable Injury Frequency Rate (TRIFR) of 1.0 at Balama as at end August 2018 NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Ongoing strong Government and Community support • P
Slide 12: Balama achieving sustainable production performance improvements
Balama achieving sustainable production performance improvements For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Weekly Plant Feed Graphite Recovery Weekly Production Higher recovery enabled by COO commenced in June 2018: 1 Progressive step up in plant feed 2 3 Improving p
Slide 13: Supply chain optimisation is underway to facilitate a release of working capital
Supply chain optimisation is underway to facilitate a release of working capital For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Supply chain optimisation underway, driven by: • Transition to a dedicated trucking fleet and purpose built Cross Dock Facility • Streamlining c
Slide 14: Balama is best positioned to meet incremental future graphite demand
Balama is best positioned to meet incremental future graphite demand For personal use only • Balama’s large Reserve and Resource allows for future plant expansion, potentially representing a low capital intensity option to meet incremental future NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 15: Sales and marketing
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Sales and marketing 14
Slide 16: Syrah's market entry and sales strategy is changing global trade flows
Syrah's market entry and sales strategy is changing global trade flows – Syrah expected to be the largest producer of natural graphite in 2018 For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Strategic focus: Strategy focused on delivering diversification of revenue across
Slide 17: Wide range of prices achieved – potential for higher basket price
Wide range of prices achieved – potential for higher basket price through continued product quality (FC) and product mix (mesh size) optimisation For personal use only 1 Fixed Carbon (FC%) 2 Product Mix (Mesh Size)(1) Impact on received price NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Aver
Slide 18: Diversification of customers across country, sector and contract type
Diversification of customers across country, sector and contract type provides for regular price discovery For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Number of Pricing YTD Actuals (Jan-18 to Aug-18) Country Contract Type Products(1) customers Mechanism Other Term, Spo
Slide 19: Battery Anode Material (BAM) strategy
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Battery Anode Material (BAM) strategy 18
Slide 20: BAM strategy evolving as market develops
BAM strategy evolving as market develops – strategic opportunity to accelerate entry to final anode product market For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Strategic Context • Syrah’s BAM strategy reflects: Lithium-ion battery supply chain – Natural Graphite • Evolv
Slide 21: BAM strategy evolving as market develops
BAM strategy evolving as market develops – strategic opportunity to accelerate entry to final anode product market For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Syrah's BAM strategy 1 Rapid development of qualification product • Louisiana facility (Vidalia) re-sized to l
Slide 22: BAM strategy evolving as market develops
BAM strategy evolving as market develops – strategic opportunity to accelerate entry to final anode product market For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES BAM plant installation ready Upcoming milestones Completed purchase of Louisiana site - fit for purpose for
Slide 23: Vidalia (Louisiana) battery anode material plant
Vidalia (Louisiana) battery anode material plant For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • USA facility re-sized to minimum requirements to: • Qualify BAM to capture first mover advantage and establish a core ex-Asia supply chain position for Syrah’s product • 5kt
Slide 24: Vanadium opportunity progression
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Vanadium opportunity progression 23
Slide 25: Syrah's vanadium opportunity
Syrah’s vanadium opportunity For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES • Consultant has been appointed to undertake a review of 2014 vanadium scoping study – expected completion October 2018 • Syrah targeting investment decision in relation to vanadium processing at
Slide 26: Offer details
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Offer details 25
Slide 27: Sources and uses of proceeds
Sources and uses of proceeds For personal use only Sources A$m US$m Uses A$m US$m NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Gross proceeds of equity raising 94 68 Balama working capital(1) 42 30 Delivery of BAM: Plant development (delivery of initial plant) 22 16 Working capital (operatin
Slide 28: Offer overview
Offer overview For personal use only • Syrah is offering 42.2 million New Shares at A$2.23 per New Share to raise approximately A$94m (US$68m) via a Placement to professional and sophisticated investors NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES ("Offer" or "Placement") Offer size and stru
Slide 29: Offer overview
Offer overview For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Event Date SPP Record Date 7:00pm, Monday, 3 September 2018 Trading Halt Tuesday, 4 September 2018 Announcement of Offer and Bookbuild opens Tuesday, 4 September 2018 Bookbuild closes Tuesday, 4 September 2018
Slide 30: Key risks
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Key risks 29
Slide 31: 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 32: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Funding risk Syrah's continued ability to operate its business and effectively implement its business plan over time will depend in part on its ability generate free cash flow, to raise funds for operations and grow
Slide 33: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES BAM strategy Relative to the Balama Operation, Syrah’s BAM strategy is at an early stage. Accordingly it is subject to a range of risks and variables which may impact upon Syrah’s ability to execute that strategy. T
Slide 34: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Geological and There is a risk that unforeseen geological or geotechnical issues may be encountered when developing and mining Ore Reserves, such as unusual or unexpected geological conditions, pit wall geotechnical
Slide 35: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE 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. These regulation reg
Slide 36: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Currency and Syrah’s activities may generate revenues, and Syrah may incur expenses, in a variety of different currencies, meaning its financial performance and position are impacted by fluctuations in the exchange
Slide 37: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Political risk, war 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 interests,
Slide 38: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Regulatory risk Syrah’s businesses are subject, in each of the countries in which it operates, to various national and local laws and regulations relating to, among other things, construction and exploration and min
Slide 39: Key risks
Key risks For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Underwriting Syrah has entered into an underwriting agreement with the underwriters, who have agreed to manage and fully underwrite the Placement, subject to certain terms and conditions. If certain risk conditions
Slide 40: International offer restrictions
For personal use only NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES International offer restrictions 39
Slide 41: International offer restrictions
International offer restrictions For personal use only International Offer Restrictions NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 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 particula
Slide 42: International offer restrictions
International offer restrictions For personal use only New Zealand NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES 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 a
Slide 43: International offer restrictions
International offer restrictions For personal use only Spain NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES This document has been prepared on the basis that all offers of New Shares will be made pursuant to an exemption under the Directive 2003/71/EC ("Prospectus Directive"), as amended and i
Slide 44: International offer restrictions
International offer restrictions For personal use only United Arab Em irates NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES Neither this document nor the New Shares have been approved, disapproved or passed on in any way by the Emirates Securities and Commodities Authority ("ESCA") or any othe