- Syrah Resources (SYR) reaches a final investment decision (FID) for the initial expansion of its Vidalia active anode material (AAM) facility in Louisiana in the US
- The FID outlines the facility’s expansion to 11,250 tonnes of AAM per annum, a 12 per cent increase on the annual capacity detailed in the bankable feasibility study
- Total estimated capital costs have increased 28 per cent to US$176 million (A$248.7 million) with estimated operating costs reducing by one per cent
- To fund capital and operating costs, Syrah plans to raise A$250 million through a placement and entitlement offer with shares priced at $1.48 each
- The company says the FID marks a “pivotal step” in becoming a vertically integrated producer of natural graphite AAM for the US and European battery market
- Syrah last traded at $1.65 on February 4
Syrah Resources’ (SYR) board has given the green light to a planned initial expansion of its Vidalia active anode material (AAM) facility in the US state of Louisiana.
The company said the final investment decision (FID) was approved to expand the facility to 11,250 tonnes per annum (tpa) of AAM, a 12 per cent increase on the annual production capacity outlined in its 2020 bankable feasibility study (BFS).
Total forecast installed capital costs for the initial expansion project have increased 28 per cent to US$176 million (A$248.7 million) from the 2020 BFS estimate, with US$165 million (A$233.2 million) remaining from January 1 2022.
Alongside the FID, Syrah has launched a A$250 million equity raise that is slated to fund the remainder of estimated installed capital costs, operating costs and further expansion studies.
The capital raise comprises a $125 million placement involving the issue of 84 million shares to institutional investors and a fully underwritten one-for-5.9 pro rata accelerated non-renounceable entitlement offer to raise the other $125 million.
Both will undertaken at a fixed price of $1.48 for each new share, equating to a 10.3 per cent discount to Syrah’s closing price of $1.65 on February 4.
Reaching the Vidalia FID represents a “pivotal” step in Syrah’s aspiration of becoming a vertically integrated natural graphite AAM supply alternative for the US and European battery supply chain and original equipment manufacturer market.
“We now have greater certainty over the project and financing for the Vidalia initial expansion and our path to entering the downstream AAM market, with the start of production scheduled for the September 2023 quarter,” Managing Director and CEO Shaun Verner said.
The company said detailed engineering and long-lead item procurement were significantly progressed with Worley Group (WOR).
Syrah intends awarding Worley a contract to provide construction management services for the initial expansion.
Construction of the 11,250 tpa Vidalia facility was targeted for completion in the June 2023 quarter.
Before announcing the FID and capital raise, Syrah entered a trading halt with shares last trading at $1.65 on February 4.