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Syrah Resources Limited 2013 Graphite & Graphene Conference Melbourne 19 November 2013 Image: Core from Ativa Zone being logged

Syrah presentation for graphite conference November 2013

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Graphite and Graphene conference in New York, on 25-26th November 2013. This presentation explains comprehensive analysis of market and market capacity for Graphite.

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Page 1: Syrah presentation for graphite conference November 2013

Syrah Resources Limited

2013 Graphite & Graphene Conference

Melbourne 19 November 2013

Image: Core from Ativa Zone being logged at Balama

Page 2: Syrah presentation for graphite conference November 2013

Syrah Resources Overview

Syrah has identified and proven up the world’s largest graphite deposit at Balama (100%) containing high-grade zones combined with an exceptional quality product

The graphite has excellent metallurgy with a concentrate grade in excess of 96% and 98%

A range of graphite flake sizes from jumbo size to fine

Potentially one of the world’s largest vanadium deposits with met testwork underway. Grades comparable to the world’s largest operating vanadium deposit

Located close to key infrastructure (power, water, port) with low power costs anticipated

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Syrah is focused on the development of its high grade Balama graphite and vanadium project in Mozambique

Somalia

Tanzania

DemocraticRepublic

of the Congo

Angola

Namibia Botswana

South Africa

Lesotho

Swaziland

Zambia

Madagascar

Malawi

KenyaUganda

Mozambique

Rwanda

Burundi

Tanzania HM

Nachingwea

Wembere

Shikula

Sasare

Lunga

Sena

Mavuzi

Ngamiland

Balama

Zimbabwe

Page 3: Syrah presentation for graphite conference November 2013

The Balama Resource: incredibly large, growing and versatile

Global Inferred resource of 1.15Bt @10.2% TGC and 0.23% V2O5

Ativa Zone – 51 million tones @ 19.9% TGC & 0.38% V2O5 at a 13% cutoff gradeMualia Zone – 136 million tonnes at 16.6% TGC and 0.43% V2OMepiche Zone – 145 million tonnes at 15.1% TGC and 0.43% V2O5

3The Balama Graphite resource is absolutely World Class

Page 4: Syrah presentation for graphite conference November 2013

Scoping Study results The Scoping study, undertaken by Snowden Mining Industry Consultants, has

delivered and confirmed an exceptionally robust financial outlook for the Balama project:

Low capital cost of US$91.6 million, Mine gate cost of US$102/t, FOB costs of US$198/t at the port of Pemba. The projected operating costs are bottom of the cost curve for graphite production

High grade ore and simple metallurgy leads to a simple plant design. Equipment components are off the shelf, meaning straightforward construction with minimal technology risk at the commissioning phase

Favourable infrastructure is assisting strong project economics – water, roads, power, port

Only 1.2 Mtpa of mining required to produce 220,000 tpa of graphite concentrates

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Project economics are compelling due to high grades, simple metallurgy and favourable infrastructure

Page 5: Syrah presentation for graphite conference November 2013

Our vision of the next 15 months to production

5

Q4 CY13 Q1 CY14 Q2 CY14 Q3 CY14 Q4 CY14 Q1 CY15 Q2 CY15

Syrah plans to have financing in place early in 2014 and to be in commercial production in Q2 2015

Q4 2013Feasibility study released with exceptionally robust numbers, a simple plant with correspondingly low capex and quick build time

Q4 2013Pre-construction crew onsite at Balama, preparing for construction phase

Fin

an

cin

gIn

frastr

uctu

reFeasib

ilit

yP

hase

Q4 2013Discussions with financiers, offtakers, existing investors and new investors with the expectation of finalising in Q1 2014

Q2 2014Construction commences

Q1 2015Commissioning

Q2 2015Production

Pre-construction Construction Comm-

ission Production

Q2 2014Construction BeginsEquipment orderedEarthworks and infrastructure completed by Dec 2014Plant facilities completed by Dec 2014Mine prepared for production

Q1 2015Commissioning from December 2014 with a 3 month period to ramp up processing plant

Page 6: Syrah presentation for graphite conference November 2013

Metallurgy

6Optimisation testwork underway to finalize plant design6

Vanadium – significant upside potentialVanadium – significant upside potentialSimple Graphite metallurgySimple Graphite metallurgy

Metallurgical test work has been conducted on Balama graphitic material by Mintek, specialist graphite processors and potential offtake partners

Results show graphitic carbon concentrates will be high grade (96%-98%)

High recoveries with low levels of ash, volatile, moisture and sulphur

Balama orebody offers flexibility in mining - customise product for clients

Vanadium is not in the current scoping study Initial testwork indicates that the vanadium

minerals are highly amenable to clean recovery, in the form of a high grade concentrate

Potential to sell a concentrate or upgrade to vanadium pentoxide flake

Feed

Rod mill Flotation

Product

ProductPebble mill

Product

Flotation

Flotation

Processing flowchart - indicativeProcessing flowchart - indicative

Page 7: Syrah presentation for graphite conference November 2013

Video

7

7Youtube link: http://www.youtube.com/watch?v=iEX7JU_yzjU

Page 8: Syrah presentation for graphite conference November 2013

Key Infrastructure

Located within close proximity of deep water port facilities at Pemba (~240km)−Third largest port in Mozambique. Ports of Africa confirmed available capacity for Balama

product through Pemba Port Main road connects Project to Pemba Port

−Sealed, well maintained road to Monte Puez (~200km). Remaining 40km currently unsealed with construction underway to seal remaining distance by end of CY2013

Large regional dam, Chipembe, located only 12km from the Balamba processing plant

−Suitable available capacity and allocation for Syrah Region currently being connected to the National Power Grid

−Power lines currently being installed between Balama town and Monte Puez. Mozambique Government has indicated willingness to extend this supply to the Balama Project

Pemba Port

8

Road: Pemba to Balama Chipembe Dam Power Lines near Balama

Page 9: Syrah presentation for graphite conference November 2013

Community development

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Significant investment has been made in local infrastructure

−Water bores drilled for use in neighbouring villages and Infrastructure programs commenced at Balama hospital

Strong supporter of local economies

−Large employer of local labour and developing training programmes to develop a local workforce

Balama operations will invest in local agricultural development for food supplies

Strong focus on improving local community health and education

Syrah is working proactively to engage the local community

Page 10: Syrah presentation for graphite conference November 2013

Current capital structure

Overview ASX listed

Market capitalisation (undiluted) of A$359 million at A$2.42/share as at 25 November 2013

148,410,123 shares on issue

4,209,467 options on issue

~$6m cash on hand at 30 September 2013

Directors’ direct and indirect interests total 31.79% of current shares on issue

Syrah price and volume – last 2 years

10

43210FebMarAprMayJuneJulyAugSepOctNov13

Page 11: Syrah presentation for graphite conference November 2013

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Graphite Market

Market in General and Syrah Targets & Strategies

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Page 12: Syrah presentation for graphite conference November 2013

Definition of Graphite & Key Points

Graphite is a natural form of carbon with the chemical formula C and is characterized by its hexagonal crystalline structure.

The key point here is;

Graphite = Carbon

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Page 13: Syrah presentation for graphite conference November 2013

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Graphite types, applications and substitution

Natural Graphite Synthetic Graphite

Application Micro Crystalline Flake Vein Secondary

SyntheticPrimary

Synthetic

Batteries (alkaline&Zinc Carbon) X X X X

Batteries (Li-ion) X X X

Carbon Brush X X X X

Conductive Coating X X X X

Expandable Graphite X

Foundry Coating X X X

Friction Material X X X X X

Fuel Cells X X X

Gaskets&Seals X

Pencils X X X

Plastics X X X

Powder Metals X X X

Rerfactory X X X

Steel & Iron (Carbon Additive) X X X

Source: Asbury Carbon

Page 14: Syrah presentation for graphite conference November 2013

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World Natural Graphite Production Statistics

Industrial Minerals Roskill BGS World Mineral

ProductionUSGS Mineral Com.

Summary

Country

Production (2011) mt(x1000 mt)

Production (2011) mt(x1000 mt)

Production (2011) mt(x1000 mt)

Production (2012) mt(x1000 mt)

Flake Amorph Flake Amorph TotalPotential Flake Total

Potential Flake

China 380 400 308 352 1,800 990 750 412.5

Brazil 96 0,0 75 0.0 89.9 49.5 75 41.25

India 35 0.0 13.5 1.5 143.5 78.9 150 82.5

N. Korea 30 0.0 100.2 30 30 16.5 30 16.5

Canada 21 0.0 25 0.0 20 11 26 26

Norway 8 0.0 8 0.0 7.8 4.2 7 7

Zimbabwe 5 0.0 1 0.0 7.2 4 0.0 0.0

Madagascar 4 0.0 4 0.0 4 2.1 5 5

Russia 2 0.0 4.6 7.4 14 7.7 14 7.7

Ukraine 1.5 0.0 8 0.0 8 4.4 6 3.3

Germany 0.3 0.0 0.0 0.0 0.0 0.0 0.0

Austria 0.0 16 0.0 0.5 0.9 0.0 0.0 0.0

Mexico 0.0 12 0.0 8 7.3 0.0 8 0.0

Turkey 0.0 0.3 0.0 0.175 0.0 0.0 10 0.0

Sri Lanka 4.2 0.0 3 0.0 3.3 1.8 4 2.2

TOTAL 587 428 550 400 2136 1170 1085 604

World Total 1015 950 2136 1085

Page 15: Syrah presentation for graphite conference November 2013

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Refractories, foundries, crucible; 38%

Metallurgy; 29%

Parts and components; 11%

Lubricants; 8%

Batteries; 8%

Others; 7%

Graphite Consumption By Sectors 2011

Source: Industrial Minerals Graphite Report 2012

Page 16: Syrah presentation for graphite conference November 2013

Some Questions We should Ask About the Market

1. What could be the market size in General?

2. What is the current market size?

3. Who are the main actors in the market and their current situation?

4. What happened in the past?

5. What is the new markets?

6. What is the altenative markets?

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Page 17: Syrah presentation for graphite conference November 2013

Question 1& 2Export Market Size

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Years Quantity Exported(metric tones) Unit Value in US$

2003 504,308.18 $302.95

2004 669,274.00 $303.99

2005 660,882.00 $298.36

2006 672,931.00 $298.61

2007 939,297.00 $267.40

2008 803,015.00 $417.18

2009 681,464.00 $397.72

2010 790,885.00 $487.13

2011 738,707.00 $816.47

2012 473,468.00 $1,037.21

2013- 1st Half 185,027.91 $1,198.41Source: http://www.trademap.org

Page 18: Syrah presentation for graphite conference November 2013

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012$

$200

$400

$600

$800

$1000

$1200

0

100000

200000

300000

400000

500000

600000

700000

800000

900000

1000000

Quantity Exported vs Unit Value

Unit Value Quantity

Page 19: Syrah presentation for graphite conference November 2013

3. Who are the main actors in the market and their current situation?

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Major Natural graphite Exporting countries (quantity in mt)

Reporter 2007 2008 2009 2010 2011 2012

China 670,570.00 597,349.00 458,895.00 585,483.00 444,800.00 257,722.00

Brazil 16,390.00 17,692.00 13,189.00 22,015.00 24,202.00 22,993.00

Canada 20,301.00 22,000.00 9,793.00 14,972.00 18,184.00 17,892.00

Mexico 16,083.00 13,347.00 9,379.00 11,576.00 18,300.00 21,284.00

Austria 7,319.00 8,962.00 5,192.00 9,519.00 N/A N/A

Madagascar 5,351.00 4,899.00 3,417.00 3,782.00 3,873.00 N/A

Sri Lanka 5,152.00 5,192.00 3,018.00 3,027.00 3,341.00 N/A

Czech Rep, 4,028.00 4,075.00 2,150.00 3,154.00 4,421.00 4,126.00

Source: UN Trade Statistics

Page 20: Syrah presentation for graphite conference November 2013

4. What Happened in the Past?

In 1992, two important thing for the graphite market happened

1. China entered the graphite market

2. Soviet Russia collapsed

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Page 21: Syrah presentation for graphite conference November 2013

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1990 1991 1992 1993 19940

50000

100000

150000

200000

250000

300000

350000

0 $

100 $

200 $

300 $

400 $

500 $

600 $

700 $

Chinese Market Entrance

NetWeight (mt) Unit Value

Period Trade Value NetWeight (mt)

Unit Value

1990 $66,340,617.00 114,774.79 $578.01

1991 $60,895,412.00 102,097.82 $596.44

1992 $111,954,601.00 262,860.23 $425.91

1993 $106,076,400.00 250,535.61 $423.40

1994 $124,227,851.00 307,424.76 $404.09

Page 22: Syrah presentation for graphite conference November 2013

Collapse of Soviet Russia?Petroleum Coke became substitute of natural graphite

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Page 23: Syrah presentation for graphite conference November 2013

5. What are the new Markets?

• Li-ion Batteries

• Graphene

• Fuel Cells

• Pebble Bed Nuclear Reactors

• Expandable Graphite

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Page 24: Syrah presentation for graphite conference November 2013

6. What are the Alternative Markets?

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Graphite Market

Natural GraphiteSynthetic Graphite

13Billion US$ Market

Carbon Market

Petroleum Coke Green Petroleum Coke Calcined Petroleum Coke Needle coke/Anode Grade Petroleum Coke

24 Billion US$ Market

Page 25: Syrah presentation for graphite conference November 2013

General Outlook of Graphite Market (% in value)

Natural Graphite8%

Synthetic Graphite electrode42%

Synthetic Carbon Fibers31%

Synthetic Graphite

Blocks8%

Synthetic Graphite Others11%

Graphite Market

Page 26: Syrah presentation for graphite conference November 2013

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Some examples from alternative markets

- Calcined Petroleum Coke

- Graphite Electrodes

- Aluminium Anodes

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Page 27: Syrah presentation for graphite conference November 2013

Calcined Petroleum Coke

Period Definition Trade ValueTrade Quantity

(tones) Unit Value

2011Calcined Petroleum

Coke imported(HS:271312)

$4,537,105,000.00 7,824,424.00 $580.00

2012

Calcined Petroleum Coke imported

(HS:271312) $3,648,701,000.00 6,753,684.00 $540.00

Obtained by calcining green petroleum coke at temperatures as high as 1400 0C

~ 4 billion US$ trade value

~ 7 million tones trade quantity

One of the main application is in Steel Mills as carbon raiser and recarburiser

Page 28: Syrah presentation for graphite conference November 2013

Synthetic Graphite Electrode

Trade Quantity : over 1.5 million mt/year (with considering electrodes other than furnaces

over 3 million tones)

Total Value : 5.5 Billion US$(est)

Used in Electrical Arc Furnaces (EAF)

2.5 kg Electrode consumed for 1 mt steel – 570 million tones steel produced through EAF

Needle Petroleum Coke is the main raw material for electrodes

Page 29: Syrah presentation for graphite conference November 2013

Aluminium Production & Aluminium Anodes50 million tones of aluminum production

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100 BBL CRUDE OIL

450 Kg GREEN COKE

4500 Kg Bauxite13 MWh600 Kg COAL

360 Kg CALCINED COKE

140 Kg BUTTS

180 Kg COAL TAR

90 Kg PITCH

560 Kg ANODES

6 Kg CATHODE

1920 Kg Alumina

1000 Kg ALUMINIUM

Page 30: Syrah presentation for graphite conference November 2013

Syrah Strategies and Advantages

• Competing with China for Traditional Markets− Competitive Cost (lowest cost)− Premium Product− Consistent Quality− Regular Supply

• Supplying the Altenative Markets− High Quality Graphite with High Grade− Low impurities (Sulphur <0.01%)− Ability to supply large quantities− Price flexibility (low cost)

• New Markets;− Focus on Battery applications

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Page 31: Syrah presentation for graphite conference November 2013

Syrah Resources Limited

New York 26 November 2013

Image: Core from Ativa Zone being logged at Balama

Thank you