Highlights

• Syrah Resources has reported its September 2026 quarter, in which its Balama graphite mine in Mozambique operated in.

• C1 cost was US$581 a tonne during operating periods, or US$840 a tonne including fixed costs in non-operating.

• The company describes continuing oversupply of Chinese synthetic anode material, pushing prices below cost in many cases, and.

• Vidalia, a planned 11,250 tonne a year facility, has offtake agreements with Tesla and Lucid.

Syrah Resources (ASX:SYR) — has reported its September 2026 quarter, in which its Balama graphite mine in Mozambique operated in a single production campaign and its Vidalia battery material facility in the United States began commercial ramp-up. The company also reported cash of US$76 million and outstanding events of default on two government-backed loans.

Balama production and costs

Balama produced 19.3 thousand tonnes of graphite from 137 thousand tonnes of plant feed, at 88 per cent recovery, in one campaign. The company says ore processed was below Ore Reserve grade because of the Ativa pit mining sequence and dewatering, and expects higher-grade blends as mining progresses. Guidance for 2026 production of 60,000 to 80,000 tonnes is unchanged.

C1 cost was US$581 a tonne during operating periods, or US$840 a tonne including fixed costs in non-operating periods. Syrah has raised its medium-term cost guidance, at 20,000 tonnes a month, to US$480 to 520 a tonne from US$430 to 480, citing labour, restructured contract mining and the move to owned equipment.

Sales

Syrah sold and shipped 18.1 thousand tonnes, at an average CIF price of US$583 a tonne, compared with US$736 in the June quarter. It says fine material made up 90 per cent of sales, lowering the average price. Initial sales went to POSCO Future M under the Balama offtake agreement, and a large breakbulk shipment went to Indonesia. No product was shipped to Vidalia.

The company describes continuing oversupply of Chinese synthetic anode material, pushing prices below cost in many cases, and says most natural graphite suppliers are not operating because of weak margins.

Vidalia

Vidalia, a planned 11,250 tonne a year facility, has offtake agreements with Tesla and Lucid. Commercial ramp-up began in September 2026, with more than 550 tonnes of anode material produced for qualification and inventory. Syrah targets first commercial sales in the December 2026 quarter, subject to final customer qualification, with timing also depending on US policy considerations. It expects positive operating cash flow from the second half of 2027.

Steady-state operating cost guidance has risen to US$4.85 to 5.25 a kilogram from US$4.30 to 4.80. About US$8 million of Section 45X tax credits were received for the 2025 tax year, and future credits are estimated at US$6 to 7 million a year before a phase-down to zero from 2033.

Cash and debt

Cash was US$76 million at 30 September, down from US$98.3 million, of which US$55 million is restricted. Net operating cash outflow was US$18.7 million, including US$8.4 million of government grants and incentives. Syrah calculates a funding runway of 8.5 quarters, with US$82 million of unused facilities that are subject to new conditions.

Total facilities are US$402.8 million, of which US$320.8 million is drawn. Interest and fees due on 15 May 2026 on the Balama development finance loan were not paid and were capitalised. Several events of default under the US Department of Energy and DFC loans remain unresolved, and the company says it is working towards a permanent resolution.

Funding proposals

In March 2026 Syrah received non-binding proposals from DFC, the Department of Energy and AustralianSuper, its convertible noteholder. They would exchange a substantial part of the debt for shares and convertible notes, provide extra liquidity, and remove cash interest and principal repayments for three years. Financial close is targeted for the first half of 2027 and needs binding documents plus government, regulatory and shareholder approvals.

Milestones

Dated items include first Vidalia anode sales in the December 2026 quarter, expiry of Chinese export relief for US-bound graphite in January 2027, and the targeted funding close in the first half of 2027. None is guaranteed.