PERTH (miningweekly.com) – Graphite miner Syrah Resources has raised A$192-million through a fully underwritten institutional placement and the institutional component of a 1-for-5.9 pro-rata accelerated non renounceable entitlement offer, to fund construction of its Vidalia active anode material (AAM) facility, in Louisiana.

The placement was supported by both existing and new shareholders, with Syrah to place some 84-million shares at a price of A$1.48 a share, to raise A$125-million. The company on Wednesday said that the shares would be placed under its existing capacity, meaning shareholder approval would not be required.

Under the institutional entitlement offer, Syrah would issue 45-million new shares, also at a price of A$1.48 a share, raising A$67-million.

The offer price represented a 10.3% discount to Syrah’s closing price on February 4, and a 7.9% discount to the company’s theoretical ex-rights price.

“We are delighted by the strong support received from existing shareholders, and we are pleased to welcome new investors to Syrah’s register. The company is in a strong financial position to progress construction of the 11 250 t/y AAM facility at Vidalia,” said Syrah MD and CEO Shaun Verner.

Meanwhile, the retail component of the entitlement offer will open on February 14, and is expected to raise a further A$58-million. Shareholders would have the opportunity to subscribe for one new share for every 5.9 Syrah shares already held. The retail entitlement offer will close on February 28.

Syrah earlier this week took a final investment decision on the initial expansion at Vidalia to 11.25k 6.y production capacity, which will pave the way for Syrah to become a vertically integrated natural graphite AAM supplier for the US and European battery supply chain.

Syrah has to date invested some $79-million to de-risk its entry into the downstream AAM market ahead of the final investment decision, including the construction and operation of the existing, commercial-scale qualification facility at Vidalia, technical product development, product qualification with target customers, and various phases of studies and engineering work.

The expansion to the 11 250 t/y operation is expected to cost $176-million, incorporating design optimisation, scope savings and cost inflation. Syrah earlier this week estimated some $165-million in remaining installed capital costs from the start of January this year.

Construction of the initial expansion is expected to start immediately, with the installed capital costs to be funded by the equity raising and by Syrah’s existing cash. Construction is scheduled for completion in the June quarter of next year, with commissioning and the start of production expected in the September quarter, followed by an 18-month ramp up period to a full production rate.

Verner has previously said that funds from the capital raise would also be used to study the potential future expansion of Vidalia to a 45 000 t/y AAM production capacity, as well as to fund working capital cost at Balama.