- Syrah Resources’ (SYR) subsidiary finalises a non-binding term sheet and receives a conditional commitments offer from the US Department of Energy (DOE)
- Under the loan program, Syrah is set to get a US$107 million loan (A$145 million) to fund the initial expansion of its Vidalia active anode material facility in Louisiana
- Importantly, the loan would be the first from the loan program in over 10 years and the first ever to a materials processing facility
- Syrah says the proposed loan highlights the Vidalia facility’s position in the US as a reliable domestic supplier for the critical minerals supply chain
- Company shares have been trading 12.4 per cent higher at $1.77
Syrah Resources’ (SYR) wholly-owned subsidiary has finalised a non-binding term sheet with the US Department of Energy (DOE) for a US$107 million loan (A$145.4 million).
The conditional commitment offered to Syrah Technologies reportedly represents a significant step in its process of market, technical and legal due diligence since July last year.
The loan will fund the initial expansion of Syrah’s Vidalia active anode material (AAM) facility in Louisiana to have an annual production capacity of 11,250 tonnes of AAMs.
The proposed loan will be made under DOE’s Advanced Technology Vehicles Manufacturing (ATVM) loan program in support of the Biden Administration’s critical minerals strategy.
If finalised, the loan to Syrah would be the first from the ATVM loan program since 2011 and the first ever from the ATVM loan program to a materials processing facility.
Director of DOE’s Loan Programs Office Jigar Shah said the conditional commitment to Syrah shows DOE’s focus on building a strong domestic supply chain for zero emission solutions.
“This reiterates President Biden’s commitment to strengthening US critical mineral supply chains and growing the US workforce to support domestic battery manufacturing for electric vehicles,” Mr Shah said.
“Moreover, the Vidalia Initial Expansion project provides a socially and environmentally responsible US supply chain for graphite, which is critical to accelerating the deployment of batteries to power EVs.”
Syrah Managing Director and CEO Shaun Verner said the loan will allow the company to accelerate its growth strategy.
“The finalisation of a term sheet and offer of a conditional commitment from DOE for a loan under the ATVM program highlights Vidalia’s strategic position in the US and provides strong validation of Syrah, Vidalia and the Vidalia Initial Expansion,” Mr Verner said.
The loan has a term of up to 10 years from financial close and interest on the loan will be fixed.
For the term sheet to become binding, DOE needs to complete due diligence, the Syrah Board needs to provide approval, and other conditions needs to be satisfied.
Once the binding loan documents have been signed, Syrah and its subsidiary need to satisfy other conditions before the loan commitment becomes effective and the funds can be advanced.
Financial close is targeted for the end of June and first advance of the loan is expected in the September quarter.
To the extent the loan is drawn, the company will use proceeds from a placement and entitlement offer completed earlier this year to accelerate studies, fund construction and provide additional balance sheet flexibility.
Company shares were trading 12.4 per cent higher at $1.77 at 12:54 pm AEST.