SYR V MNS: CSG Production Costs

Estimated Production Costs For 99.99% Coated Spherical Graphite (CSG):

	Column 1	Column 2	Column 3	Column 4
1		SYR THERMAL	MNS THERMAL	SYR CHEMICAL
2	_ Battery feedstock %C graphite _	~98%1	99.1%2	~98%1
3	Life of mine operating cost to produce the battery feedstock (USD)	$3003	$5594	$3003
4	Thermal cost to produce 1 ton of CSG (USD)?	$5505	$4606	N/A
5	Chemical cost to produce 1 ton of CSG (USD)?	N/A	N/A	$2407
6	Shipping cost from Mozambique to New Orleans (USD)	$2208	N/A	$2208
7	Total cost to produce 99.99% battery anode grade spherical graphite (USD)	$1,0709	$1,01910	$7609

<sub>1. December Quarterly Activities and Cashflow Report (2017), page 14.
2. Nachu BFS and Corporate Update (2016), slide 15.
3. Quarterly Activities Report Audio Cast, [32:15], (October, 2016); Jim Askew: "We see no reason to vary our delivery cost onto a ship of 300 dollars U.S a ton."
4. Nachu BFS and Corporate Update (2016), slide 7.
5. Downstream Strategy Update (2016), slide 34.
6. Step 1: Magnis converts its ~99.1% C graphite feedstock to 99.8% uncoated spherical graphite via milling (Source). Step 2: The uncoated spherical graphite is coated thermally (Source) to become 99.99% coated spherical graphite. The $460 figure is calculated using the table from slide 34 of Syrah's Downstream Strategy Update; extrapolating the graph to a 99.8% Feed Graphite Carbon Content (%). The $460 does not include the cost of Step 1 (only Step 2). The figure could be lower though because Magnis claims a CSG yield of 75% versus Syrah's ~50%; on balance I assume that Magnis' increased yield is offset by the costs of Step 1 and use the extrapolation from slide 34.
7. Downstream Strategy Update (2016), slide 33.
8. Syrah Finalised Balama Graphite Feasibility Study And Declares Maiden Ore Reserve (2015), page 10. USD$110 *2 tons of feedstock.
9. In Louisiana.
10. In Tanzania. As noted in Footnote 6, this is an estimate based on assumptions and will be updated as Magnis produces cost estimates.</sub>



Uncertainties that need to be resolved:

(a) Are the chemical/thermal costs per ton from slides 33 & 34 of the Downstream Strategy Update, the cost per ton of feedstock or the cost per ton of CSG produced?

(b) Syrah's CSG yield is ~50% whereas Magnis' is typically 75% (I'm assuming due to a higher %C graphite feedstock?). What is Magnis' thermal cost to produce 1 ton of CSG including the costs of Steps 1 & 2 from footnote 6.

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