Syrah (ASX:SYR) share price rockets 32% higher on Tesla deal

Syrah and Tesla have signed an agreement…

| More on:
rocketing asx share price represented by man riding golden dollar sign speeding through clouds

Image source: Getty Images

The Syrah Resources Ltd (ASX: SYR) share price has been a very strong performer on Thursday morning.

At the time of writing, the graphite producer’s shares are up 32% to a multi-year high of $1.75.

This latest gain means the Syrah share price is now up an impressive 78% in 2021.

Why is the Syrah share price shooting higher?

Investors have been bidding the Syrah share price higher this morning after it announced a major agreement relating to its vertically integrated Active Anode Material (AAM) production facility in Vidalia, USA.

Through this facility, Syrah is aiming to be the first major integrated ex-China producer of natural graphite AAM that is battery ready for electric vehicles.

Well, it made a major step forward to achieving this goal this morning. According to its announcement, the company has executed an offtake agreement with electric vehicle giant Tesla to supply natural graphite AAM from the production facility.

The release explains that Tesla will offtake the majority of the proposed initial expansion of AAM production capacity at Vidalia at a fixed price for an initial term of four years. This will commence from the achievement of a commercial production rate, subject to final qualification.

In addition, Tesla has an option to offtake additional volume from Vidalia subject to Syrah expanding its capacity beyond 10kt per annum of AAM.

Management believes that the agreement provides a compelling foundation to proceed with the initial expansion of Vidalia’s production capacity. Though, a final investment decision for construction of this expanded facility is planned in January 2022, subject to financing commitments.

But it doesn’t stop there. The company revealed that it is advancing commercial and technical engagement with other target customers to develop Vidalia AAM for mass production and secure additional long-term purchase commitments for Vidalia.

Should you invest $1,000 in Syrah right now?

Before you consider Syrah, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Syrah wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns 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.

More on Resources Shares

Happy woman miner with her thumb up signalling Wyloo's commitment to back IGO's takeover of Western Areas nickel
Resources Shares

3 ASX mining shares that went gangbusters on Friday

These ASX resource stocks ended the week on notable highs.

Read more »

man jumping along increasing bar graph signifying jump in alumina share price
Resources Shares

Critical Resources share price jumps 6% on ‘further significant’ lithium find

It has been a fantastic week for Critical Resources shareholders.

Read more »

A man takes his dividend and leaps for joy.
Resources Shares

Here’s why the Chalice Mining share price is jumping 15% today

Chalice Mining shares are ending the week strongly...

Read more »

high, climbing, record high
Resources Shares

Here’s why the Hawsons Iron share price is climbing today

Hawsons shares are set to finish Friday on a high note.

Read more »

Red arrow going down, symbolising a falling share price.
Capital Raising

Why is the Australian Vanadium share price crashing 17% today?

The Australian Vanadium share price is tumbling on Friday...

Read more »

A surprised man sits at his desk in his study staring at his computer screen with his hands up while he watched the Sezzle share price fall despite the company accepting a takeover offer from Zip Co
Resources Shares

What’s happening with the AVZ Minerals share price now?

AVZ shares are going to remain suspended until at least the end of the month...

Read more »

Happy man in high vis vest and hard hat holds his arms up with fists clenched celebrating the rising Fortescue share price
Resources Shares

BHP share price higher following Woodside shareholder merger approval

The BHP-Woodside petroleum merger is going ahead...

Read more »

A wide-smiling businessman in suit and tie rips open his shirt to reveal a green t-shirt underneath
Resources Shares

IGO share price surges 7% higher on lithium update

IGO shares are ending the week on a positive note...

Read more »