The Syrah Resources Ltd (ASX: SYR) share price is pushing higher on Friday morning.
At the time of writing, the graphite producer’s shares are up 2% to $1.08.
Why is the Syrah share price pushing higher?
Investors have been bidding the Syrah share price higher today after it announced its decision to issue a $28 million (US$22 million) convertible note tranche to AustralianSuper.
This follows the signing of an agreement in December with the super fund, which gave Syrah the option issue convertible notes totalling A$56 million (US$43 million) in two tranches.
While the first $28 million (US$22 million) tranche was not issued earlier this year due to its strong balance sheet position, the second tranche has been issued to support the orderly ramp-up of production at Balama under various market scenarios.
The funds will also be used to maintain project momentum for the proposed expansion of production capacity at its Active Anode Material Facility in Vidalia, USA.
Market conditions improve
The release explains that electric vehicle, anode material and natural graphite market conditions are constructive. This is supporting the ramp-up of production at Balama towards an initial target of 15kt per month.
Though, it stressed that it is continuing to be disciplined in its ramp-up at Balama by considering market demand and leading indicators.
Over in the United States, the Initial Detailed Design for the expansion of production capacity at Vidalia has improved the definition of costs in the Bankable Feasibility Study (BFS). Pleasingly, the estimated capital costs for the construction of a 10ktpa AAM facility at Vidalia remain consistent with the BFS, with the full proposed contingency being maintained.
Syrah’s cash position as at 30 June 2021, which will include proceeds from the note issue, is expected to be US$81 million.