Syrah Resources Raises Funds to Expand Vidalia (ASX:SYR)

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Syrah Resources Ltd [ASX:LPI] has completed a $192 million capital raise to expand their Vidalia project.

Syrah aims to become the first major integrated producer of natural graphite anode material that is battery ready outside of China.

Their plan is to mine for graphite at their Balama graphite mine in Mozambique and then transport that graphite to their Vidalia facility in Louisiana, where it will be processed into active anode material (AAM).

Syrah Resources targeting production by 2023

The company completed a placement that raised around $125 million, and an institutional entitlement offer that raised another $67 million approximately.

The placement got support from both existing shareholders and new investors and about 76% of their entitlements available to eligible institutional shareholders were snatched up.

Shares were offered at a fixed price of $1.48 per new share, which is a discount on the share price of 10.3% of the company’s closing price of $1.65 a share on 4 February.

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Now the company is getting ready to launch an offer for retail investors, which they expect will raise around $58 million. This offer will open from next Monday, 14 February, and will close on 28 February.

Earlier this week, Syrah Resources approved a final investment decision for Vidalia to expand its production capacity to 11,250 tonnes a year of AAM. This would increase the production capacity of the plant, once its built, by around 12%.

This is after Syrah Resources recently signed a deal with Tesla to supply them 8,000 tpa of AAM from Vidalia for an initial four years.

Syrah expects to finish up building the plant in the June 2023 quarter, and to start production in the September quarter of 2023.

Building an anode supply option outside of China

Syrah is looking to become a vertically integrated natural graphite supplier for both the US and the EU,  and Vidalia is a pretty crucial step in achieving that.

Shares for Syrah were down 11% once it resumed trading today after a trading halt. Shares were exchanging hands at $1.47 cents at time of writing.

With EVs rolling out at a fast pace, we’ll need plenty of EV materials like graphite and lithium.

Check out our complete guide on how to invest in ASX lithium stocks. For more information, click here.

 

Best,

 

Selva Freigedo,
For Money Morning

PS: Our publication Money Morning is a fantastic place to start on your investment journey. We talk about the big trends driving the most innovative stocks on the ASX. Learn all about it here

About Selva Freigedo

Selva Freigedo is an analyst at Money Morning. She has a background in financial economics, but what makes Selva´s experiences different to many are the places she has lived and worked. Born in Argentina, she has also lived in Brazil, the US, Spain, and now Australia. She has seen up…

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