Syrah Resources (SYR) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw no natural graphite production at Balama due to low demand and sufficient inventory, with operations focused on maintenance and readiness; sales were made from inventory, mainly outside China.

• Vidalia produced ~130t AAM, selling ~40t for customer qualification, with commercial sales expected in 2025 pending customer qualification and US policy clarity.

• A $150 million binding loan from the US DFC was secured for Balama, providing critical liquidity and working capital support.

• Ended the quarter with $61 million cash, including $41 million restricted for Vidalia and $20 million unrestricted for Balama and corporate needs.

• Strategic focus remains on production readiness, cost minimization, and cash preservation to position for future market and policy shifts, especially in ex-China graphite supply.

Financial highlights

• Total cash at quarter end was $61 million, with $41 million restricted and $20 million available for operations.

• Balama fixed C1 costs were $4 million per month during non-operating periods.

• 13kt natural graphite sold/shipped at a weighted average sales price of $698/t (CIF), with 1.5kt shipped to Vidalia.

• Receipts from customers totaled $8.5 million for the quarter.

• Net cash used in operating activities was $(19.2) million for the quarter.

Outlook and guidance

• Vidalia AAM sales are expected in 2025, with timing dependent on customer qualification, US policy, and Chinese supply competition.

• Only one Balama production campaign is planned for Q4, targeting around 20,000 tons, contingent on demand.

• Balama targets 100ktpa fines sales to ex-China AAM customers from 2027.

• Ex-China natural graphite and AAM demand is forecast to grow at a double-digit CAGR through 2040.

• Further offtake agreements for Vidalia are expected once policy clarity improves, especially post-U.S. elections.