Syrah Resources- Symposium Resources Roadshow


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Syrah Resources- Symposium Resources Roadshow

  1. 1. SYRAH RESOURCES LIMITED Symposium Series 26-27 November 2012Syrah Resources
  2. 2. Important notice and disclaimerThis document has been prepared by Syrah Resources Ltd (“the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date ofthis document. The information contained in this document is of general background and does not purport to be complete.This document is not and should not be considered as an offer or an invitation to acquire any securities issued by the Company and will not form part of any contract for the acquisition of securities. Inparticular, this document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States unless theSecurities have been registered under the US Securities Act of 1933 or an exemption from registration is available.This document is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire securities in the Company. It has been prepared without takinginto account the objectives, financial situation or needs of individuals. Past performance information given in this document is given for illustrative purposes only and should not be relied upon as(and is not) an indication of future performance.This document includes certain statements, opinions, projections, forecasts and other forward-looking information which, while considered reasonable by the Company, are inherently subject tosignificant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results included in thisdocument. Recipients of this document are cautioned that forward-looking statements are not guarantees of future performance – they must make their own independent investigations,consideration and evaluation of the opportunity to invest in the Company. By accepting this document, recipients agree that if they wish to investigate, consider or evaluate any opportunity to investin the Company, they will make and rely solely upon their own investigations and enquiries and will not in any way rely upon this document.Any statements, opinions, projections, forecasts and other forward-looking information contained in this document do not constitute any commitments, representations or warranties by theCompany and its associated entities, directors, agents and employees, including any undertaking to update any such information. Except as required by law, and only to the extent so required,directors, agents and employees of the Company shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way outof, or in connection with, the information contained in this document. The Company has prepared this document based on information available to it at the time of preparation and subject to thequalifications in this document. To the maximum extent permitted by law, none of the Company, its affiliates or any of their respective related bodies corporate or other affiliates or its or theirdirectors, officers, employees, representatives, agents or advisors (each a Limited Party and together the Limited Parties) take any responsibility for the contents of this document or any action takenby any recipient on the basis of any information in the document. The Limited Parties do not accept any liability or responsibility for any expenses, losses, damages or costs incurred by any recipient asa result of their receipt or use of this document and the information in this document being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. No Limited Partymakes any representation or warranty, express or implied, as to the currency, accuracy, completeness, reliability, fairness or correctness of the information contained in this document or about theCompany generally or any opportunity to invest in the Company in the future.The Limited Parties make no recommendations as to whether recipients should participate in any offer or issue of securities by the Company or make any other investment in the Company andrecipients represent, warrant and agree that they have not relied on any statements made by any Limited Party in relation to the Company, or any potential investment in the Company generally.FiguresAll figures in this document are in Australian dollars (AUD) unless stated otherwise. This document is confidential and not for further distribution This document contains certain confidentialinformation. It is provided by the Company on the basis that, by accepting this document, persons to whom this document is given agree to keep the information strictly confidential and not todisclose it to anyone within their organisation except on a need-to-know basis and subject to these restrictions, or to anyone outside their organisation.The release, publication or distribution of thisdocument in jurisdictions outside Australia may be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. By accepting this document,you represent and warrant that you are a person to whom an offer of securities may be made without a disclosure document (as defined in the Corporations Act 2001 (Cth) (Corporations Act)) on thebasis that you are exempt from the disclosure requirements of Part 6D.2 in accordance with Section 708(8) or 708(11) of the Corporations Act. 1
  3. 3. Unsaved Document / 21/09/2012 / 20:01 1. Company Overview 2 2
  4. 4. Investment highlightsHighly strategic flake graphite discovery at Balama, Mozambique A globally significant, large flake, high grade natural graphite deposit Over 7km strike distance and up to 2km of surface width of outcropping graphite and vanadium mineralisation High grade zone recently extended with additional drilling, grades reported are among the highest recorded globally Metallurgy in preliminary test work indicates concentrate grades in excess of 97% C achievable Close to infrastructure and good main road accessAttractive graphite market fundamentals High purity natural graphite price has increased from ~US$750/tonne in 2004 to current prices of ~US$1,800+/tonne(1) Strong demand drivers including emerging green and energy technologies China supplies ~67% of global flake graphite but supply is likely to become constrained as it imposes export restrictions, environmental standards, and deposits become increasingly difficult to mine US and European Commission have both declared graphite a critical material 3
  5. 5. Board of DirectorsTom Eadie Non-Executive Chairman (since 2007)  30+ years experience in the Australian and international resource sector  Also Executive Chairman of Copper Strike LtdPaul Kehoe Managing Director (since 2011)  15+ years experience in corporate finance and restructuring  Accountant and geologistMike Chester Non-Executive Director (since 2011)  27+ years experience in investment banking, mining company research and funds management  Also Non-Executive Director of NuCoal Resources, Guildford Coal Ltd and Black Fire Minerals LtdAlistair Non-Executive Director (since 2011)Campbell  30 years mining industry experience  Principal Consultant of OptiRes Pty Ltd 4
  6. 6. Current capital structureOverview Syrah share price and volume – last 1 year ASX listed Market capitalisation (undiluted) of ~A$400 million at A$3.00/share as at 20 November 2012 133,869,590 shares on issue 17,500,000 options on issue ~$15m cash on hand at 31 October 2012 Directors’ direct and indirect interests total ~29% of current shares on issue 5
  7. 7. Unsaved Document / 21/09/2012 / 20:01 2. Industry Overview 6
  8. 8. Introduction to graphiteOverview World graphite market based on graphite type Principal characteristics of graphite include: − Resistant to corrosion and heat 2010 natural graphite world production ~925,000 – ~1,100,000 tonnes − Excellent conductor of heat and electricity − High lubricity, natural strength and Amorphous Vein 59% malleability 1%Natural flake graphite (e.g. Balama deposit) Synthetic Natural Typically found as discrete flat flakes, > 50% 50% Flake 40% 0.1mm in size Used for higher value including battery applications Source: Mackie Research Capital 2011 Priced by purity and/or flake size, up to US$1,800/tonne+ Synthetic graphiteNatural amorphous graphite  Produced mainly from hydrocarbon sources Low grade (70%-85% C) and extremely fine  High purity, prices from US$10,000 – grain size $20,000/tonne Pricing at US$600-$800/tonne, it requires  Market size ~1Mtpa, of which ~50% could extensive and costly processing for higher potentially be substituted by high quality value applications natural graphite if supply is available 7
  9. 9. Characteristics of a good flake graphite depositCharacteristic Balama Large flake size – usually a higher purity of concentrate  Latest metallurgy test work shows around half of concentrate in medium – jumbo flake size ranges High grade – determines project cash costs and profitability/NPV at any given graphite price  High grade zones over 20% identified; among highest recorded globally High purity – higher purity requires less treatment to bring the graphite to above 97%directly to pricing Translates  97% Cmetallurgical purity achieved in latest concentrate testing C required for high value applications, such as Li-ion batteries US$/tonne Flake size (mesh size) 80-85% C 94-97% C Extra Large (+50) – +$1,800 Large (-50 +80) – $1,300-1,800 Medium (-80 +100) – $1,100-1,700 Fine (-100) – $1,150-1,450 Amorphous powder $600-800 – Source: Industrial Minerals Magazine, price date 18 Sep 2012. 8
  10. 10. Current supply and uses for natural graphite USGS estimated world resources: 77Mt Current natural graphite industry uses India 14% Other 10% Other Batteries Steel & 14% China 10% Refractory 72% 41% Carbon Brushes 11% Natural graphite production According to USGS, Lubricants China’s supply decreased 14% ~30% from 2008 to 2009 Automotive Parts 1.2 14% 1.0 Natural graphite (Mt) 0.8 0.6  Approximately 40% used in the steel & 0.4 refractory industries across a range of 0.2 graphite qualities 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010  Higher quality, coarse flake demand to be India China Other driven primarily by batteries and emergingSource: United States Geological Survey (2012) technologies 9 Source: Mackie Research Capital, Company estimates. 9
  11. 11. Natural flake graphite pricing and demand  Benchmark graphite prices have more than doubled since 2007  Some softening in Chinese refractory and steel demand has recently weakened prices Prices have increased over the past 5 years with battery technology the sleeper 2.5Mtpa+US$/tonne Up to 1.5Mtpa 2007 2008 2009 2010 2011 2012 Source: Industrial Minerals Magazine. Source: Industrial Minerals Magazine. Note: Large flake graphite, 94-97% C, +80 mesh, average pricing. 10 10
  12. 12. Unsaved Document / 21/09/2012 / 20:01 3. Balama Project 11
  13. 13. Balama overview Over 7km strike distance and up to 2km of Location surface width of outcropping graphite and vanadium Balama is a high quality graphite deposit Located 240 km west of Pemba port Excellent metallurgy results achieved in testing Drilling well advanced − First ever drilling with 50 holes completed Initial JORC Resource Estimates for both Balama West and East anticipated in late 2012 / early 2013 12 12
  14. 14. Exploration targets for Balama West and Balama East * Balama West – 400 to 500 million tonnes at 10% TGC and 0.20% V2O5 Balama East – 300 to 400 million tonnes at 11% TGC and 0.30% V2O5Exploration target based on depth of 200 metres over the areas drilled, and based on theweighted average grade for every drill hole with assay results to date* This targeted tonnage and grade is conceptual in nature and there has been insufficient work to define a Mineral Resourceunder the JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource. 13
  15. 15. Balama West Drilling results at Balama West have wide intercepts of very high grade graphite and vanadium: − BMDD0006: 196m @16.9% TGC and 0.41 V2O5 from 100m to 296m − BMDD0007: 186m @ 16.7% TGC and 0.46 V2O5 from 131 m to 318m − BMDD0009: 58.0m @ 20.0% TGC and 0.36% V2O5 from 4.5m to 62.5m − BMDD0012: 79.0m @ 20.4% TGC and 0.42% V2O5 from 15.4m to 94.4m Highest grades reported of 30.3% TGC and 0.88% V2O5 over 2m Balama West now has two zones of very high grade graphite and vanadium mineralisation at or near surface 14
  16. 16. Balama West (cont.)Stacked Cross sections Two very high grade zones intersected to date at Balama West The first has widths up to 196m and averaging between 10 – 17% TGC. This zone is open to the west and east The second has widths up to at least 100m and averages between 15 – 22% TGC. This zone is open to the north, west and east Both zones outcrop at surface or with minimal cover 15
  17. 17. Balama East Syrah has completed 25 diamond drill holes at Balama East. Drill holes announced include: − BMDD0021: 218.4m @ 12.3% TGC and 0.39% V2O5 − BMDD0022: 290.4m @ 13.8% TGC and 0.41% V2O5 − BMDD0023: 302.6m @ 13.7% TGC and 0.38% V2O5 Very high grade zones of greater than 15% TGC outcrop at surface Very coarse flake graphite – visually appears to be coarser grained than Balama West Sushi Zone has flake sizes up to 6mm in length 16
  18. 18. 17Balama East (cont.) Cross section 17
  19. 19. MetallurgyOverview Flake size results Metallurgical test work has been conducted  47% of the concentrate has a flake size in the on a 58 kg sample of Balama graphitic medium to jumbo range, with the mix of material by Mintek(1) flake sizes considered ideal for meeting the Final results show a graphitic carbon requirements of different markets concentrate of 97.02% -200 +50 (Jumbo) Recoveries at ~94%, with low levels of ash, (Amorphous) 8% 5% volatile, moisture and sulphur Graphitic carbon Ash Volatiles Moisture Sulphur 97.02% 2.24% 0.16% 0.57% 0.01% 50-100 (Medium - -100 - +200 Large) (Fine) 42% 45% Above attributes mean that the product could potentially be sold into premium end market segments attracting higher prices (1) Owned by the South African Government, Mintek is South Africa’s national mineral research organisation. 18
  20. 20. Balama infrastructure Balama is located 240 km west of deep water port facilities at Pemba, the third largest port in Mozambique Less than 1km from major road connecting the project directly to airport and sea port Nearby Balama township provides access to Above: Pemba Port. schools, medical facilities, shops and labour – electricity to Balama in process of being upgraded Large regional dam, Chipembe, located only 14km from the project. Mozambique Government has made an offer for water rights. Positive response took one day! Above: Road from Pemba to Balama. 19
  21. 21. Unsaved Document / 21/09/2012 / 20:01 4. Upside Opportunities 20 20
  22. 22. Vanadium prospectivity at Balama Vanadium represents significant potential upside although economics are very favourable on the graphite alone − Roscoelite, the main vanadium ore mineral, has been shown to separate from the graphite during flotation 2010 vanadium production for the world was ~56.5kt − Over 87% is used as a steel alloy for strength with other uses in chemicals and catalysts − Future developments in battery technology − Largest project globally is Xstrata’s Rhovan project which has a measured and indicated resource of 72.30Mt at 0.5% V2O5(1) Above: Balama coarse flake graphite sample Best vanadium drill result at Balama: with green vanadium bearing mica. − BMDD0007: 94.0m @ 0.57% V2O5 − BMDD0022: 21.6m @ 0.68% V2O5 − BMDD0023: 109m @ 0.50% V2O5 21
  23. 23. Other exploration opportunitiesTanzania mineral sands Syrah controls >1,000km2 of landholding World class Kwale deposit 70km to the north All prospects are lightly drilled and have open zones of mineralisation − Fungoni Prospect: Historical drilling shows very high grades containing over 15% HM. Drill intercepts include 4m @ 27.8% HM and 4m @ 24.9% HM with excellent assemblage – zircon 25% of HM − Syrah has drillied at Fungoni (8000m) − Tajiri Prospect: Drill intercepts include 14m @ 9.2% HM and 9m @ 12.3% HMUranium & Copper prospectivity at Lunga, Zambia 18km long radiometric anomaly with palaeodrainage pattern and numerous Cu occurrences 22
  24. 24. The End