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The Syrah (ASX:SYR) share price is up 8% today. Here’s why

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The Syrah Resources Ltd (ASX: SYR) share price is surging higher today after the company released its December quarterly report and presentation.

Shares in the miner are currently trading 7.9% higher, reaching a price of $1.30 at the time of writing.

Syrah is an Australia-based industrial minerals and technology company. Its two facilities include the Balama graphite project in Mozambique, which has suspended production since March 2020 due to impacts from the  COVID-19 pandemic on travel and workforce. The other, which is not yet operational, is the Vidalia facility in Indiana, the United States.

Why is the Syrah share price rising?

A number of points in the quarterly report may be contributing to the Syrah share price rise today.

Firstly, its US-based Vidalia project was significantly de-risked after completion of a bankable feasibility study. The study highlighted the project’s strong economics.

Syrah also achieved first production of active anode material (AAM) from the Indiana facility during the quarter. The AAM was produced to target specifications and dispatched to electric vehicle supply chain participants. These include Tesla Inc (NASDAQ: TSLA) and Nio Inc (NYSE: NIO).

In addition, the company is assessing a potential restart to production at the Balama facility. Syrah noted that any restart will not take place until 2-3 months after any announcement is made.

As a result, Syrah advised it “remains on track to become a vertically integrated producer of natural graphite AAM to service ex-Asia markets”.

While not currently producing graphite, Syrah aims to join ASX graphite producers such as Talga Group Ltd (ASX: TLG) and Novonix Ltd (ASX: NVX) in supplying both traditional graphite markets and emerging technology markets across the globe.

Market update

In today’s release, Syrah said graphite market conditions had improved once again in the quarter, with higher prices being observed.

Positive momentum in EV sales growth also continued during the quarter, which is a key leading indicator for natural graphite demand growth. The company noted that global EV sales grew 106% in the fourth quarter of 2020 and 89% year on year in H2 2020.

In addition, Syrah completed a $124 million capital raising during the quarter. As a result, its cash balance sits at US$75 million as of 31 December 2020.

Syrah will use the proceeds to progress its final investment decision regarding Vidalia for a large AAM plant. The funds will also be used for restarting Balama and general corporate purposes.

The Syrah share price smashed its 52-week high today, trading as high as $1.34. Despite falling back to $1.3, shares in the company are trading 127% higher for the year.

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Daniel Ewing has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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