SYR - Syrah Resources

[Miner]

I really need to get my head back around the whole market at the moment. Too much time away drinking Martinis.

Hey @kennas
Just checking if you got your heads back after sabatical leave?
We need your safe return on ASF and SYR thread.
SYR has again surprised (?) the market on its Q3 report published today. When it will raise a white flag with seeing to be doing something.
I will watch the Market reaction when it opens on Monday.
The following reported much aftermarket closed today
https://www.asx.com.au/asxpdf/20191018/pdf/449n2nlr7jxy1k.pdf
https://www.asx.com.au/asxpdf/20191018/pdf/449n0wwzqgkb7n.pdf
I am paranoid to read the line - discussions with employees, Mozambique Govt etc for continuity - are we looking for a belly up syndrom ??
Eye wash by reducing payment to non executive directors. What about reduction on pay based on performance, for the top brass - it will itself bring some millions reduction. Fat cats I meant

 

[rederob]

The dog might turn out to be a dead cat, and any bounce might be worrisome.
Until graphite prices improve SYR is definitely one to avoid.

Presently dwelling around 38 cents and not showing any sign of recovery.
Australian Super must be ruing the day they took the plunge and here's some news today:

Unlisted Convertible Note issued at a face value of A$55,800,000 per Note. Maturity date is 5 years from the Subscription Date (28 October 2019)... AustralianSuper may elect to fully convert into fully paid ordinary shares of Syrah any time after 30 months from the Subscription Date and prior to maturity date.​

 

[rederob]

Presently dwelling around 38 cents and not showing any sign of recovery.

A month later and we are into 35cent territory.
No recovery remotely on the horizon.
The fleas on this dog are sucking it dry.
Sub-30cents is very much on the cards in 2020, while a recovery in graphite prices would lead to a decent bounce given its existing production capacity and capital reserves.

 

[barney]

The fleas on this dog are sucking it dry.
Sub-30cents is very much on the cards in 2020, while a recovery in graphite prices would lead to a decent bounce given its existing production capacity and capital reserves.

They raised $25 ?? million back in June at 81 cents. The SP ran up for 3 weeks to $1.06 just after that so I assume the Instos were selling into that.

Cap raises have kept their balance sheet healthy with Market Cap only 2X Cash.

Still burning around $10 million per Quarter however so whoever is stumping up the Cash will want to see some positive SP movement eventually.

Worth watching for the "turn" and if it does it should bounce hard as you say Red.

 

[rederob]

I do not hold this stock but noticed it has risen steadily in recent weeks.
Today they provided a report on quarterly performance.
I always look for what is obvious and not stated or not detailed.
SYR wrote a lot about "expectations" but the single line summary in its "Outlook" says:
"Forecast Q1 2020 Group net cash outflow is ~US$16.0 million comprising of:"
At that rate of cash burn the company will need to do another capital raising before the year is out, or take drastic action to curtail costs.
Alternatively, a major rebound in graphite prices may occur and save them - that is what they are hoping for.

 

[tinhat]

Thanks for the reminder to sell. Lucky for me I bought bang smack at the all time low back at the beginning of December. I did this based solely on the article in the paper about Australian Super saying they will take on the shorters and are backing the management of the company. Australian Super are a major shareholder. So I figured "game on", this is probably the bottom. So it was a speckie for me. I don't have hard and fast stop losses but for a specie I should have thought about selling at 60c which would is about the 15% pullback from the recent high. If I wanted to stay in the stock but still conserve half my paper profit up to the recent high I would adjust my stop down to around 53c.

But this is a speckie and the report today reminded me that I hold no strong conviction. I've got to bpay some funds to take up my SPP entitlement in WZR so I was going through the portfolio just now looking to see if anything was a sell and, yep, time to cash in the chips on SYR.

Then I thought, "don't trade in the opening hour" as the price is holding up reasonably well given that you would expect a bit of selling on the report. But then why waste my morning sitting in front of the computer, get it done and get on with the day. They joys of being a small time retail investor.

 

[tinhat]

Yep, that was a bit silly because I am still at my computer and sure enough, as soon as 11am came around, the price has jumped from .565 to .60

 

[rederob]

Yep, that was a bit silly because I am still at my computer and sure enough, as soon as 11am came around, the price has jumped from .565 to .60

Irrational exuberance!

 

[tinhat]

Irrational exuberance!

too much coffee!

 

[Trav.]

Just having a look at SYR and noted the following

High Lows = Good
Trending Up = Good
Ascending Triangle Forming = Good
Gap Filled = Good

So on the watch list it goes.

 

[tinhat]

I bought back into SYR as I had managed to free up some funds but effectively I've pocketed my profits. I still don't hold any strong conviction on the stock, I just haven't looked at it closely but I reckon the chart looks like it will remain in uptrend as the chart by @trav suggests.

 

[Sdajii]

SYR has done pretty well over the last month or two, recovering steadily from its lows. Very speculative over the next month, but I figured I'd take a punt for the June competition. Electronic vehicles aren't going anywhere and China is out of favour lately, giving SYR a boost. Of course, the world is in a bit of strife, but that's harming almost everyone.

 

[tinhat]

I'm out of SYR at a 10% loss on my most recent holding. I might be one of the few who actually made some profit on this stock trading it as it scraped along the bottom of the pond.

Synthetic graphite is the go, so they say.

 

[rederob]

Syrah is a good company from a structural perspective and has a world class resource.
Its idea is to offer an alternative to China for industry's natural graphite supply chain to the battery market.
Currently there is an oversupply to the market and Syrah's resources are not being drawn upon.
The CEO's recent presentation was underwhelming.
I am not a holder and have not been.
If I were a trader right now I would be shorting this company based on fundamentals.

 

[Dona Ferentes]

wonderful optimism exhibited here

lot of stale holders likely to impede any continuation.

 

[Dona Ferentes]

.... since inception

 

[finicky]

Was just looking at SYR as a possible template for the trajectory of Chalice (CHN)
The monthly chart is in itself interesting as small rounded low coming out of capitulation volume in March. Could be just Wuhan crash related I guess. Nice regular small bodied candles though - gives an impression to me of accumulation.

All Data Monthly

 

[finicky]

Quarterly chart - cracked through 50c with a vengeance in December quarter.
With hindsight, the high volume June Qtr doji candle was a good signal?

 

[Dona Ferentes]

and back over a dollar... so what follows ?

Sources said the $419 million company was looking for between $50 million and $100 million in fresh equity, and a deal was expected to launch in coming days. And there's plenty of reasons why Syrah could need new capital.

High on the list is restarting its flagship Balama graphite project in Mozambique, which has been sitting idly for the past half year. Operations at Balama were halted by Syrah in July, as the global market for batteries sustained a pandemic-induced hammering, which was the final straw for the project. Syrah had already announced production cuts at Balama late last year due to weakening market conditions, and that was followed by a company restructure in 2019's September quarter that saw the staff head count at Balama cut by 30 per cent.

However, a tightening graphite market could mean its time for Balama to restart. In a note to clients a fortnight ago, UBS analysts said the graphite market was supportive of Balama restarting in 2021, and in their base case scenario the project would be restarted before March.

While it's been offline, UBS reckoned the Balama project had been burning around $US10 million cash each quarter. Syrah had $US44 million cash on its balance sheet as of September 30 this year and no debt, according to a quarterly activities report published in October.

The other big reason Syrah could need capital would be to finance the development of its graphite production facility at Vidalia, in the United States. Syrah said it had completed a bankable feasibility study (BFS) on the project at the start of December, and it would cost $US138 million to build a 10 kilo tonne per annum processing facility. The completion of the BFS meant Syrah could start having "commercial discussion for project development to progress with potential offtake partners and financiers," the company said.

 

[basilio]

I researched SYR for a long time when I had an interest in CSE (shareholder of SYR)

It seemed that, as usual, the big money was made during the exploration period period when blue sky projections of resources and sales were unhampered by reality.

So they have the largest and cheapest graphite mine in the world in Balama but they want to raise $138m to start a 10k PA graphite production facility ?
What was the point of proving and developing their Balama mine and then seemingly walking away ? (Perhaps raising more money is easier ? )