Syrah Resources Limited (ASX: SYR) (“Syrah” or “Company”), releases its Interim Report for the half year ended 30 June 2019. This is the first interim report post declaration of commercial production, effective 1 January 2019, of the Balama Graphite Operation (“Balama”) in Mozambique.
• Strong safety record continued with Total Recordable Injury Frequency Rate of 0.3 as at 30 June 2019
• Revenue of US$46.9 million from sales of 101kt natural flake graphite
• Net loss after tax of US$81.4 million includes non-cash post tax impairment of property, plant and equipment and mining assets of US$65.9 million, and inventory write down of US$4.8 million
• Total assets of US$420.5 million, net assets US$380.4 million
• Cash of US$64.7 million as at 30 June 2019
Shaun Verner, Managing Director and CEO said, “During the first half of 2019, production of 92,000 tonnes and sales of over 100,000 tonnes saw Balama become globally significant in the natural graphite market, with growth in sales to China and Balama product going into the battery supply chain. We also continued to progress our Battery Anode Material Strategy (“BAM”) in the USA, with qualification shipments of unpurified spherical graphite dispatched to target customers. Construction and commissioning of the purification circuit of the BAM facility in Vidalia, Louisiana is nearing completion, and dispatch of purified spherical graphite for qualification purposes will follow. At both Balama and Vidalia, Syrah is highly focussed on working safely and partnering with community and stakeholders as we build our market presence and develop shareholder value.”
He added, “As announced on 10 September 2019, a sudden and material decrease in spot natural flake graphite prices in China has led us to take immediate action in response to current market conditions. We will conduct an orderly reduction in production volume to the end of Q3 2019 to produce approximately 45,000 tonnes. In Q4 2019 we will significantly reduce production to approximately 5,000 tonnes per month to maintain operations. We have commenced a review of further immediate cost savings and an operational review for 2020. Our forecast cash balance of US$60 million at the end of September and additional available liquidity of ~US$38.5 million from the completion of the convertible note allows for flexibility to manage our near term production volumes in line with demand growth. Despite the near term market challenges, lithium-ion battery demand remains positive with significant growth expected. The decisive action taken in managing our production volumes in the current market conditions is in the best interest to preserve the long term value of Balama, which hosts the world’s largest graphite Ore Reserve and significant Vanadium Resource.