On 8 November 2018, the Australian-based industrial minerals and technology company, Syrah Resources Limited (ASX: SYR) announced that the replacement Primary Classifier Unit at the Balama Graphite Operation has been successfully installed and commissioned ahead of schedule. Following the release of this news, the share price of the company increased by 4.91 percent as on 8 November 2018.
On 4 October 2018, the company provided an update about fire occurred in the Primary Classifier section of the Balama process plant due to which the production activities including delivery, installation, and commissioning were stopped for 5 weeks. During the repair period, the company operated a by-pass and brought forward planned maintenance and production optimization works to reduce subsequent planned downtime. Further, the Production has been resumed with stable ramp up achieved.
In the September quarter, the graphite production of the company increased by 83 percent to 38.7kt as compared to the production of June quarter. Due to the fire in the Primary Classifier Screen unit of the process plant, it is expected that the company will suffer from a production loss of 30kt in the fourth Quarter. And, the total repair cost including the replacement unit is estimated to be around US$0.5 million.
In the next quarter, Syrah Resources is expecting that the total production will be in between 30kt to 35kt.
At the end of September quarter, the cash used in operating activities was $21.37 million and the cash flow from financing activities was $65.25 million.
The September quarter’s product weighted realized price was slightly ahead of June quarter, with a range of prices received driven by grade, flake size, qualification shipments, product mix, market entry and China domestic versus ex China pricing. The net cash outflow for the September quarter was US$21.6 million, and for the fourth quarter the net cash outflow is forecasted to be US$23.6 million (inclusive of SPP proceeds), with forecast cash on hand at 31 December 2018 of around US$77 million. In response to evolving market dynamics and supply chain participant interactions, the Company will focus an initial production capacity at Vidalia on qualification volumes to achieve near-term production and qualify BAM from a Syrah owned facility in the USA to capture first-mover advantage and establish a core ex-Asia battery supply chain position for Syrah’s product.
Recently, the company made an announcement regarding a sales agreement with Qingdao Taida-Huarun New Energy Technology Co. Ltd which will start immediately, and it is for 20kt of natural graphite from Balama. The deal will help the company to enter its Balama graphite product into China and the battery anode material market, and it will further support the company to establish Balama product as a baseload for battery materials.
In the last six months, the share price of the company decreased by 38.38 percent as on 7 November 2018. SYR’s shares traded at $2.030 with a market capitalization of circa $664.87 million as on 8 November 2018 (AEST 4:00 PM).
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