Syrah Resources trims annual loss on record sales, production
Graphite producer Syrah Resources has boosted the ore reserves at its flagship Mozambique mine as it unveiled a much improved net loss for the year.
Syrah Resources has more than halved its annual net loss on revenues which more than tripled as it gears up for a busy year.
The graphite producer on Thursday unveiled an ore reserve upgrade at its Balama mine in Mozambique, with the 18Mt graphitic carbon reserve, up from 16.8Mt, sufficient to sustain mining for the next 50-plus years.
Syrah reported a net loss of $US26.8m, down from a $US56.9m loss the previous year, on revenue of $US106.2m, up from $US29m.
The company is looking to tick off a number of milestones in the near future, with a definitive feasibility study on the further expansion of its Vidalia “active anode material” (AAM) production plant in the US, from 11.25ktpa to 45ktpa “nearing completion”.
Syrah has already executed a binding agreement with the US government for a $US102m facility to support the financing of the 11.25ktpa project, which is expected to start production in the third quarter of this calendar year.
The company has also been selected for a US Department of Energy grant of $US220m, which could potentially fund “a significant proportion of capital costs of the Vidalia Further Expansion project’’.
“Despite global shipping availability constraining the ability to reach forecast volumes, Balama operational performance improved strongly in 2022, with record production and recoveries,” the company told the ASX.
“Syrah’s minimum natural graphite production target of 15kt per month was achieved when uninterrupted campaign operations were possible through the year, and would have
been well surpassed without maximum inventory positions at Balama and Nacala being reached as a result of global container shipping market disruption.
“The illegal industrial action at Balama also interrupted operations in the second half of the year.”
Syrah said the detailed engineering for the Vidalia “initial expansion” was 99 per cent complete at the end of calendar 2022 “and almost all construction and equipment contracts were awarded at year-end”.
“There was progress with construction activities and equipment fabrication was well advanced, with the 11.25ktpa facility taking shape,” the company said.
“A definitive feasibility study for the Vidalia Further Expansion project was substantially complete at year-end.
“Completion of this DFS will enable Syrah’s board to assess a final investment decision for this project in conjunction with customer and financing commitments.”
Syrah said surging demand in the electric vehicle (EV) market, with sales up 63 per cent year-on-year to 11 million units, underpinned a rise in the natural graphite spot price during 2022, and there was continued growing demand for the AAM which its Vidalia plant would produce.
“Leading auto original equipment manufacturers are positioning to create large-scale EV supply chains in the USA,” the company said.
“With this backdrop, the strategic importance of a localised natural graphite AAM supply source and the criticality of Vidalia is clear to all stakeholders.
“Syrah’s core focus in 2023 is transitioning Balama to sustainable operations, with supportive market conditions, unconstrained logistics and greater capacity utilisation expected, and advancing Vidalia’s expansion projects to become a globally significant vertically
integrated supplier of natural graphite AAM to ex-Asia markets.
“The company is uniquely positioned to benefit from the electrification of the vehicle fleet, increasing EV adoption across global consumer markets, battery supply chain development, focus on critical battery mineral supply in the US and favourable natural graphite market conditions.”
Managing director Shaun Verner was paid $1.65m in 2022, including short and long-term incentives, up from $978,031.
Syrah shares were 2.2 per cent higher at $1.66 on the ASX late Thursday afternoon.
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