Syrah Resources Limited

Thank you for standing by and welcome to the CIRA Resources Q3 quarterly report update. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Sean Verner, Managing Director and CEO. Please go ahead.

Thank you. Good morning and thanks to everyone for joining us on the call today. With me is our CFO, Steve Wells, and our EGM Strategy and Business Development here in the area. So after a very challenging 12 months, it's great to be able to report on a more productive quarter with a positive BALAMA natural graphite ramp-up of operations following restart, sales, strengthening market conditions for BALAMA finds, and important quality and market fail-wins for the Dahlia business. This morning we'll work through the presentation provided with the quarterly report to update you on the important developments in the quarter and then we'll be happy to answer any questions at the end. So turning to slide three and I wanted to first remind everyone about clear and differentiated investment propositions. Starra is the leading integrated natural graphite and active anode material producer outside China, with the hard-won investment and capability in place, providing a lead time over followers. Vertical integration from mine to end customer offers a secure source of high-quality critical mineral supply outside China. Our unique asset base is OPEX cost competitive with China and leading ex-China, and well placed to generate strong margins over the longer term. Our leading sustainability position, including external assessment, provides full auditability and traceability from raw material through to finished product. And finally, in response to expected continued strong growth in our end markets, we have clear expansion opportunities that we can execute in line with the needs of our customers and government stakeholders. Moving on to slide four and let me spend a moment now talking about our most important values of safety and sustainability. As we continue to develop a position as a leading critical minerals producer, we're guided by three core objectives, being positive for the communities in which we operate, being sustainable for the environment and providing secure supply for our customers. I'm pleased to say that in the quarter, our performance on key metrics measuring safety and sustainability were very strong. Our people and our local communities are critical to our success, and the resolution of community and national issues impacting the llama in Q2 this year continued to progress positively through Q3. The health, safety and security of employees and contractors will always remain SARA's highest priorities. As we strive to zero harm in our operations, I'm pleased to report that our total reportable injury frequency rate remains very low at 1.1 incidents per million hours worked across the group, a result which any operation globally would be proud of. During the quarter, I also had the opportunity to meet with President Chapa of Mozambique and Minister Palay of Mineral Resources and Energy Portfolio, who both reaffirmed the importance of BALANA Mozambique and their support for the operation. We also note in recent days that Total has removed its force majeure notice for its $20 billion LNG project in Cabo Delgado, demonstrating increased confidence in the new government's ability to manage security and its developments following the election. Our safety focus is underpinned by our work on critical risk hazard management and infield leadership interactions. Syrah's operations are clearly aligned with leading global sustainability standards. Last year, Balama became the first graphite operation globally and the first mining operation in Mozambique to achieve the Initiative for Responsible Mining Assurance, or IRMA50, level of performance for sustainability. This achievement highlights nearly a decade of strengthening our differentiated performance, including a strong safety record investment in training and developing a highly skilled workforce, ongoing community development and human rights due diligence. Along with our ISO certification and external auditing required under our US government funding arrangements, we continue to prioritise health and safety and environmental management systems, confirming our commitment to operating sustainably and driving continuous improvement in this area. The final point I wanted to reiterate on sustainability is the global warming potential of our integrated natural graphite anode product relative to other suppliers. The Independent Life Cycle Assessment, or LCA, completed on SARA's integrated operations by Minviro, from Bulama origin to the debut customer date, estimated 7.3 kilograms of CO2 equivalent per kilogram of anode material produced, which is around 50% lower than equivalent natural graphite anode material from the benchmark supply bridge in Heilongjiang Province in China and 70% below synthetic graphite benchmarks from China. We believe that these efforts give SARA competitive advantage as the most sustainable source of integrated natural graphite anode material available at scale today. On slide five, I'm turning now to a more detailed look at our performance and highlights in the third quarter. As we previously reported after restarting operations in mid-June, in July we recommenced shipments from Balama and removed the force majeure declaration that had been in place since December 2024. We ran a six-week production campaign throughout the quarter and produced 26,000 tonnes of natural ferropark. Difficult to make clear comparisons with prior periods given that we were ramping up operations after an extended outage. The comparisons will be more relevant in future quarters. Recovery of 68% was below our target as we restarted and went through some initial maintenance requirements and utilization of all the stockpile through the outage. But the team focused heavily on quality and volume to meet the two initial break box sales in line with customer expectations. Given the outage period has depleted finished product inventory completely, We essentially sold everything we produced in the quarter with approximately 24,000 tonnes sold. With the great bulk shipments, one into Indonesia and our first ever bulk shipment to the US, we were pleased to be able to meet some of the pent-up demand resulting from the production outage in this first campaign. Our weighted average sales price for the quarter was US$625 per tonne, SIFT delivered. Our C1 operating cost during the operating period was US$585 FOB per tonne and the freight averaged US$92 per tonne. Importantly, this provides strong indications of better than historical pricing and a good basis for lower C1 costs as we can increase volumes, indicating positive future cash flow opportunities. At Vidalia, as we've previously announced, the business claims and receives a $12 billion cash paid Section 45X tax credit for the 2024 calendar year in connection with the operations of the anodotorial facility. Ongoing tax credits are expected in line with the relevant legislation annually, subject to the phase-down period from the start of the next decade. We continue to work through highly detailed and extensive qualification requirements at Bedelia and are making positive progress, albeit slower than we would like. Our product's quality and performance are excellent and we continue to deal constructively with a highly complex mix of policy, commercial and technical factors. We're focused on achieving sales as early as possible but expect that material sales volumes will only occur in 2026. but we emphasise that our work here will pay off, with our investment and development experience demonstrating a considerable time required for others to follow. Our cash flow from operations of negative US$3 million includes receipts from sales of natural craft shipments of US$12 million, along with the US$12 million tax credit I just mentioned. Excluding the tax credit, our cash outflow from operations reduced markedly from the prior quarter production and sales ramp up and inventory availability to facilitate further improvement in the quarters ahead. We're highly focused on getting Delana to operational cash flow break even as quickly as possible. Finally, the company had a strong cash balance of $87 million following the equity raising that was completed in Q3, noting that there are restrictions on use under our funding arrangements. I'll now hand over to Steve to provide some further detail on our financials and cash flow movements in the quarter.

Thanks, Sean, and good morning, everybody. I'll send your attention to the waterfall chart on slide six, which shows our cash flow through the quarter. As Sean mentioned, our cash outflow from operations in the quarter was $3 million and reflects revenue operating costs and the positive benefit of the $12 million Section 45X tax credit, which is an operating cost tax credit and can be received as a direct cash payment rather than a credit against future tax liabilities. While we won't have this benefit every quarter, as we noted in our ASX release at the time we received this credit, we estimate section 45X credits to be roughly $7 to $9 million per annum prior to phase out of the credit in accordance with current legislation. In terms of timing, it is likely that direct payments for further 45X credits will be ordinarily received in the second half of the following calendar year. Other movements to call out in this quarter were the equity raising that was launched at the end of July and completed in August and delivered net proceeds of $44 million. The company also received a $6.5 million disbursement from its loan with the DFC, which netted $2.2 million of refinancing repayments, led to a $4 million net proceeds from borrowings. While operating cash flow was marginally negative, as articulated, we also had a net cash inflow from borrowings so that excluding the net proceeds from the equity raise, the group was cash flow neutral for the quarter. In all, we closed the quarter with a cash balance of $87 million, which was made up of $27 million of unrestricted cash and $60 million of restricted cash for lender reserves and for use in each of our operating assets. We also have further liquidity available under the DFC facility, which is part of the ongoing DFC loan restructuring discussions. With that, I'll hand it back to Sean.