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Syrah Resources Symposium Series SYRAH RESOURCES LIMITED 26-27 November 2012

Syrah Resources- Symposium Resources Roadshow

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Page 1: Syrah Resources- Symposium Resources Roadshow

Syrah Resources

Symposium SeriesSYRAH RESOURCES LIMITED

26-27 November 2012

Page 2: Syrah Resources- Symposium Resources Roadshow

This document has been prepared by Syrah Resources Ltd (“the Company”) to provide summary information about the Company and its associated entities and their activities current as at the date of this document. The information contained in this document is of general background and does not purport to be complete.

This document is not and should not be considered as an offer or an invitation to acquire any securities issued by the Company and will not form part of any contract for the acquisition of securities. In particular, this document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States unless the Securities have been registered under the US Securities Act of 1933 or an exemption from registration is available.

This document is for information purposes only and is not financial product or investment advice, nor a recommendation to acquire securities in the Company. It has been prepared without taking into account the objectives, financial situation or needs of individuals. Past performance information given in this document is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

This document includes certain statements, opinions, projections, forecasts and other forward-looking information which, while considered reasonable by the Company, are inherently subject to significant uncertainties and contingencies. Many known and unknown factors could cause actual events or results to differ materially from estimated or anticipated events or results included in this document. Recipients of this document are cautioned that forward-looking statements are not guarantees of future performance – they must make their own independent investigations, consideration and evaluation of the opportunity to invest in the Company. By accepting this document, recipients agree that if they wish to investigate, consider or evaluate any opportunity to invest in the Company, they will make and rely solely upon their own investigations and enquiries and will not in any way rely upon this document.

Any statements, opinions, projections, forecasts and other forward-looking information contained in this document do not constitute any commitments, representations or warranties by the Company and its associated entities, directors, agents and employees, including any undertaking to update any such information. Except as required by law, and only to the extent so required, directors, agents and employees of the Company shall in no way be liable to any person or body for any loss, claim, demand, damages, costs or expenses of whatsoever nature arising in any way out of, or in connection with, the information contained in this document. The Company has prepared this document based on information available to it at the time of preparation and subject to the qualifications in this document. To the maximum extent permitted by law, none of the Company, its affiliates or any of their respective related bodies corporate or other affiliates or its or their directors, officers, employees, representatives, agents or advisors (each a Limited Party and together the Limited Parties) take any responsibility for the contents of this document or any action taken by any recipient on the basis of any information in the document. The Limited Parties do not accept any liability or responsibility for any expenses, losses, damages or costs incurred by any recipient as a result of their receipt or use of this document and the information in this document being inaccurate or incomplete in any way for any reason, whether by negligence or otherwise. No Limited Party makes any representation or warranty, express or implied, as to the currency, accuracy, completeness, reliability, fairness or correctness of the information contained in this document or about the Company generally or any opportunity to invest in the Company in the future.

The Limited Parties make no recommendations as to whether recipients should participate in any offer or issue of securities by the Company or make any other investment in the Company and recipients represent, warrant and agree that they have not relied on any statements made by any Limited Party in relation to the Company, or any potential investment in the Company generally.

FiguresAll figures in this document are in Australian dollars (AUD) unless stated otherwise. This document is confidential and not for further distribution This document contains certain confidential information. It is provided by the Company on the basis that, by accepting this document, persons to whom this document is given agree to keep the information strictly confidential and not to disclose it to anyone within their organisation except on a need-to-know basis and subject to these restrictions, or to anyone outside their organisation.The release, publication or distribution of this document in jurisdictions outside Australia may be restricted by law. Any failure to comply with such restrictions may constitute a violation of applicable securities laws. By accepting this document, you represent and warrant that you are a person to whom an offer of securities may be made without a disclosure document (as defined in the Corporations Act 2001 (Cth) (Corporations Act)) on the basis that you are exempt from the disclosure requirements of Part 6D.2 in accordance with Section 708(8) or 708(11) of the Corporations Act.

Important notice and disclaimer

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1. Company Overview

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Investment highlights

A globally significant, large flake, high grade natural graphite deposit Over 7km strike distance and up to 2km of surface width of outcropping graphite and vanadium

mineralisation High grade zone recently extended with additional drilling, grades reported are among the

highest recorded globally Metallurgy in preliminary test work indicates concentrate grades in excess of 97% C achievable Close to infrastructure and good main road access

Highly strategic flake graphite discovery at Balama, Mozambique

Attractive graphite market fundamentals High purity natural graphite price has increased from ~US$750/tonne in 2004 to current prices of

~US$1,800+/tonne(1)

Strong demand drivers including emerging green and energy technologies China supplies ~67% of global flake graphite but supply is likely to become constrained as it

imposes export restrictions, environmental standards, and deposits become increasingly difficult to mine

US and European Commission have both declared graphite a critical material4

Page 5: Syrah Resources- Symposium Resources Roadshow

Tom Eadie Non-Executive Chairman (since 2007) 30+ years experience in the Australian and international resource sector Also Executive Chairman of Copper Strike Ltd

Paul Kehoe Managing Director (since 2011) 15+ years experience in corporate finance and restructuring Accountant and geologist

Mike Chester Non-Executive Director (since 2011) 27+ years experience in investment banking, mining company research and

funds management Also Non-Executive Director of NuCoal Resources, Guildford Coal Ltd and

Black Fire Minerals Ltd

Alistair Campbell

Non-Executive Director (since 2011) 30 years mining industry experience Principal Consultant of OptiRes Pty Ltd

Board of Directors

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Page 6: Syrah Resources- Symposium Resources Roadshow

Current capital structure

Overview Syrah share price and volume – last 1 year

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2. Industry Overview

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Page 8: Syrah Resources- Symposium Resources Roadshow

Introduction to graphiteOverview Principal characteristics of graphite include:

−Resistant to corrosion and heat−Excellent conductor of heat and electricity−High lubricity, natural strength and

malleabilityNatural flake graphite (e.g. Balama deposit) Typically found as discrete flat flakes, >

0.1mm in size Used for higher value including battery

applications Priced by purity and/or flake size, up to

US$1,800/tonne+Natural amorphous graphite Low grade (70%-85% C) and extremely fine

grain size Pricing at US$600-$800/tonne, it requires

extensive and costly processing for higher value applications

World graphite market based on graphite type

Source: Mackie Research Capital 2011

Synthetic50%

Natural50%

Flake40%

Vein1%

Amorphous59%

2010 natural graphite world production ~925,000 – ~1,100,000 tonnes

Synthetic graphite Produced mainly from hydrocarbon

sources High purity, prices from US$10,000 –

$20,000/tonne Market size ~1Mtpa, of which ~50%

could potentially be substituted by high quality natural graphite if supply is available 8

Page 9: Syrah Resources- Symposium Resources Roadshow

Characteristics of a good flake graphite deposit

Large flake size – usually a higher purity of concentrate

Characteristic Balama

High grade – determines project cash costs and profitability/NPV at any given graphite price

High purity – higher purity requires less treatment to bring the graphite to above 97% C required for high value applications, such as Li-ion batteries

Latest metallurgy test work shows around half of concentrate in medium – jumbo flake size ranges

High grade zones over 20% identified; among highest recorded globally

97% C concentrate purity achieved in latest metallurgical testing

Flake size (mesh size)

80-85% C 94-97% C

Extra Large (+50) – +$1,800

Large (-50 +80) – $1,300-1,800

Medium (-80 +100) – $1,100-1,700

Fine (-100) – $1,150-1,450

Amorphous powder $600-800 –Source: Industrial Minerals Magazine, price date 18 Sep 2012.

US$/tonne

Translates directly to pricing

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Page 10: Syrah Resources- Symposium Resources Roadshow

China72%

India14%

Other14% Steel &

Refractory41%

Automotive Parts14%

Lubricants14%

Carbon Brushes

11%

Batteries10%

Other10%

Current supply and uses for natural graphite

Source: United States Geological Survey (2012) 10

Source: Mackie Research Capital, Company estimates.

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1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Nat

ural

gra

phit

e (M

t)

India China Other

According to USGS, China’s supply decreased ~30% from 2008 to 2009

USGS estimated world resources: 77Mt

Natural graphite production

Current natural graphite industry uses

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Approximately 40% used in the steel & refractory industries across a range of graphite qualities

Higher quality, coarse flake demand to be driven primarily by batteries and emerging technologies

Page 11: Syrah Resources- Symposium Resources Roadshow

Natural flake graphite pricing and demand

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Source: Industrial Minerals Magazine.Note: Large flake graphite, 94-97% C, +80 mesh, average pricing.

Source: Industrial Minerals Magazine.

2.5Mtpa+

Up to 1.5Mtpa

Prices have increased over the past 5 years with battery technology the sleeper

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Benchmark graphite prices have more than doubled since 2007

Some softening in Chinese refractory and steel demand has recently weakened prices

US$

/ton

ne

2007 2008 2009 2010 2011 2012

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3. Balama Project

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Page 13: Syrah Resources- Symposium Resources Roadshow

Balama overview

Over 7km strike distance and up to 2km of surface width of outcropping graphite and vanadium

Balama is a high quality graphite deposit

Located 240 km west of Pemba port

Excellent metallurgy results achieved in testing

Drilling well advanced

− First ever drilling with 50 holes completed

Initial JORC Resource Estimates for both Balama West and East anticipated in late 2012 / early 2013

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Location

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Balama West – 400 to 500 million tonnes at 10% TGC and 0.20% V2O5

Balama East – 300 to 400 million tonnes at 11% TGC and 0.30% V2O5

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Exploration targets for Balama West and Balama East *

Exploration target based on depth of 200 metres over the areas drilled, and based on the weighted average grade for every drill hole with assay results to date

* This targeted tonnage and grade is conceptual in nature and there has been insufficient work to define a Mineral Resource under the JORC Code and it is uncertain if further exploration will result in the determination of a Mineral Resource.

Page 15: Syrah Resources- Symposium Resources Roadshow

Balama West

Drilling results at Balama West have wide intercepts of very high grade graphite and vanadium:−BMDD0006: 196m @16.9% TGC and

0.41 V2O5 from 100m to 296m

−BMDD0007: 186m @ 16.7% TGC and 0.46 V2O5 from 131 m to 318m

−BMDD0009: 58.0m @ 20.0% TGC and 0.36% V2O5 from 4.5m to 62.5m

−BMDD0012: 79.0m @ 20.4% TGC and 0.42% V2O5 from 15.4m to 94.4m

Highest grades reported of 30.3% TGC and 0.88% V2O5 over 2m

Balama West now has two zones of very high grade graphite and vanadium mineralisation at or near surface

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Balama West (cont.)

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Two very high grade zones intersected to date at Balama West

The first has widths up to 196m and averaging between 10 – 17% TGC. This zone is open to the west and east

The second has widths up to at least 100m and averages between 15 – 22% TGC. This zone is open to the north, west and east

Both zones outcrop at surface or with minimal cover

Stacked Cross sections

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Balama EastSyrah has completed 25 diamond

drill holes at Balama East. Drill holes announced include:−BMDD0021: 218.4m @ 12.3%

TGC and 0.39% V2O5

−BMDD0022: 290.4m @ 13.8% TGC and 0.41% V2O5

−BMDD0023: 302.6m @ 13.7% TGC and 0.38% V2O5

Very high grade zones of greater than 15% TGC outcrop at surface

Very coarse flake graphite – visually appears to be coarser grained than Balama West

Sushi Zone has flake sizes up to 6mm in length

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Page 18: Syrah Resources- Symposium Resources Roadshow

Balama East (cont.)

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Cross section

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Metallurgy

Metallurgical test work has been conducted on a 58 kg sample of Balama graphitic material by Mintek(1)

Final results show a graphitic carbon concentrate of 97.02%

Recoveries at ~94%, with low levels of ash, volatile, moisture and sulphur

Graphitic carbon Ash Volatiles Moisture Sulphur

97.02% 2.24% 0.16% 0.57% 0.01%

+50 (Jumbo)5%

50-100 (Medium -

Large)42%

-100 - +200 (Fine)45%

-200 (Amorphous)

8%

47% of the concentrate has a flake size in the medium to jumbo range, with the mix of flake sizes considered ideal for meeting the requirements of different markets

Above attributes mean that the product could potentially besold into premium end market segments attracting higher prices

Overview Flake size results

19(1) Owned by the South African Government, Mintek is South Africa’s national mineral research organisation.

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Balama infrastructure

Balama is located 240 km west of deep water port facilities at Pemba, the third largest port in Mozambique

Less than 1km from major road connecting the project directly to airport and sea port

Nearby Balama township provides access to schools, medical facilities, shops and labour – electricity to Balama in process of being upgraded

Large regional dam, Chipembe, located only 14km from the project. Mozambique Government has made an offer for water rights. Positive response took one day!

Above: Pemba Port.

Above: Road from Pemba to Balama.20

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4. Upside Opportunities

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Vanadium prospectivity at Balama

Above: Balama coarse flake graphite sample with green vanadium bearing mica.

Vanadium represents significant potential upside although economics are very favourable on the graphite alone

−Roscoelite, the main vanadium ore mineral, has been shown to separate from the graphite during flotation

2010 vanadium production for the world was ~56.5kt

−Over 87% is used as a steel alloy for strength with other uses in chemicals and catalysts

−Future developments in battery technology

−Largest project globally is Xstrata’s Rhovan project which has a measured and indicated resource of 72.30Mt at 0.5% V2O5

(1)

Best vanadium drill result at Balama:

−BMDD0007: 94.0m @ 0.57% V2O5

−BMDD0022: 21.6m @ 0.68% V2O5

−BMDD0023: 109m @ 0.50% V2O5 22

Page 23: Syrah Resources- Symposium Resources Roadshow

Other exploration opportunitiesTanzania mineral sands

Syrah controls >1,000km2 of landholding

World class Kwale deposit 70km to the north

All prospects are lightly drilled and have open zones of mineralisation

−Fungoni Prospect: Historical drilling shows very high grades containing over 15% HM. Drill intercepts include 4m @ 27.8% HM and 4m @ 24.9% HM with excellent assemblage – zircon 25% of HM

−Syrah has drillied at Fungoni (8000m)

−Tajiri Prospect: Drill intercepts include 14m @ 9.2% HM and 9m @ 12.3% HM

Uranium & Copper prospectivity at Lunga, Zambia

18km long radiometric anomaly with palaeodrainage pattern and numerous Cu occurrences

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The End