Syrah Resources (ASX: $SYR) equity raising announcement

Syrah Resources Limited (ASX: $SYR) has announced an Equity Raising initiative to raise approximately A$98 million (US$65 million) through a fully underwritten institutional placement and a pro rata accelerated non-renounceable entitlement offer. The company aims to utilize the proceeds to preserve Balama operating mode optionality, fund Vidalia operating costs and reserve accounts under its loan with the US Department of Energy, support Vidalia's ramp-up and progress in product qualification, and accelerate AAM development.

Executive commentary on equity raising and strategic goals

The Equity Raising and Series 1 and 3 Notes Conversion aim to ensure the company is well-capitalized to deliver its 2024 targets and execute its medium-term strategy. The Equity Raising will increase Syrah's pro-forma cash and the Series 1 and 3 Notes Conversion will reduce the company's borrowings and resolve a potential refinancing task in October 2024. Jarden Australia Pty Ltd is acting as the sole lead manager, underwriter, and bookrunner to the Equity Raising, with Ashurst serving as the legal adviser to the company.

Outlook and impact of the equity raising initiative

Syrah Resources Ltd's equity raising initiative and the Series 1 and 3 Notes Conversion are expected to have a significant impact on its financial position and strategic growth in the coming years. The company's Managing Director and CEO, Shaun Verner, expressed that the Equity Raising and Series 1 and 3 Notes Conversion will enable the company to preserve optionality with respect to Balama's operating mode and support the continued ramp-up of production at Vidalia, and the path to product qualification and commercial sales. The funds from the Equity Raising will also contribute to transition activities on the Vidalia Further Expansion project to achieve FID readiness. The company's rationale for the Equity Raising and use of proceeds includes preserving operating mode optionality for the Balama Graphite Operation, supporting the ramp-up of production at the Vidalia AAM facility to product qualification, funding AAM development acceleration, and strengthening Syrah's balance sheet.