Syrah Group Reports Q2 Results: Lower Natural Graphite Sales, Advancing Vidalia Expansion
Syrah Resources Limited
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Syrah Group Reports Q2 Results: Lower Natural Graphite Sales, Advancing Vidalia Expansion

Syrah Group (ASX: SYR) has released its Quarterly Activities Report for the three months ending June 30, 2023. The report detailed an apparent high cell and anode inventories at the volatile Chinese anode market, even as global electric vehicle sales grew 55% in Q2 2023 compared to the same period in 2022, reaching approximately 3. 4 million units. Meanwhile, natural graphite sales were lower, with only 15kt being sold and shipped to third party customers and 2kt being shipped to Vidalia.

Production from the Balama site was constrained by maximum inventory positions and lower natural graphite sales. The Company produced 15kt at Balama at 78% recovery in April 2023 and paused production in May and June 2023. Balama C1 costs (FOB Nacala/Pemba) also suffered and reached US$565 per tonne in April 2023, impacted by volume and diesel price.

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However, Syrah is making strides in other areas and is progressing the second offtake agreement with Tesla Inc. (Tesla) while simultaneously engaging with other potential customers. The construction of the 11. 25ktpa AAM Vidalia facility (“Vidalia Initial Expansion”) is also advancing, with a total installed capital cost estimate of US$190 million and expected start of production in December 2023 quarter.

Additionally, the DFS on expansion of Vidalia to a 45ktpa AAM (inclusive of 11. 25ktpa AAM production capacity) confirms the project is technically viable, financially robust and expected to generate significant value for Syrah. The Company has commenced transition activity for Vidalia Further Expansion project to maintain readiness for a FID in H2 2023. The quarter-end cash balance was US$101 million, including restricted cash of US$55 million.

"We have achieved a number of important milestones this quarter in progressing our business strategy while also navigating challenging market conditions," said Shaun Verner, Syrah Chief Executive Officer. "Continued success on our initiatives and strategy throughout the remainder of the year will position us well to take advantage of the increasing traction in growth in our markets and beyond. "

Syrah will issue a second A$50 million series to be issued in August 2023 with shareholder approval.

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