Syrah Resources : March Quarterly Activities and Cashflow Report

Quarterly Activities Report - Period Ended 31 March 2022

Key Points

• • Total Recordable Injury Frequency Rate ("TRIFR") of 0.9 for Balama and 0.0 for Vidalia at quarter end

• • Demand growth for Balama natural graphite end uses, with global electric vehicle ("EV") sales up 80% in Q1 2022, versus Q1 2021, to approximately 2.0 million units 1 and Chinese anode production increasing to above 90kt in March 20222

• • Higher Balama production and sales enabled by Pemba breakbulk shipments supplementing Nacala container shipments

• • Balama produced 46kt natural graphite at 76% recovery with 35kt sold and shipped during quarter

• • Product quality consistent with previous quarters with stable grade, and higher recovery relative to historical quarters with an equivalent production rate

• • Balama C1 cash costs (FOB Nacala/Pemba) of US$464 per tonne

• • Weighted average sales price increased to US$573 per tonne (CIF), with very strong incremental demand and higher new contract prices

• • First 10kt spot breakbulk shipment from Pemba port arrived in China in March 2022 and two spot breakbulk shipments scheduled in the June 2022 quarter

• • Significant sales order book with more than 90kt of natural graphite sales orders for the June 2022 quarter and into the second half of 2022, demonstrating robust underlying demand conditions

• • Final investment decision for initial expansion of Vidalia AAM facility to 11.25ktpa AAM production capacity ("Vidalia Initial Expansion") approved by Syrah Board3

• • Detailed engineering for the Vidalia Initial Expansion project more than 60% completed and construction advancing within the planned schedule and budget

• • 11.25ktpa AAM Vidalia facility targeted to start production in the September 2023 quarter

• • BFS on the expansion of Vidalia's production capacity to at least 45ktpa AAM, inclusive of

  11.25ktpa AAM, to be completed in 2022

• • Syrah completed A$250 million (US$178 million4) institutional placement and pro rata accelerated non-renounceable entitlement offer to fully fund the Vidalia Initial Expansion project and strengthen balance sheet5

• 1 Source: MarkLines. March 2022 includes Syrah's estimate for EV sales (~1k total) in selected countries.

• 2 Source: ICCSino.

• 3 Refer ASX release 7 February 2022.

Syrah Resources Limited ABN 77 125 242 284

Registered Office: c/- Vistra Australia (Melbourne) Pty Ltd Level 4, 96-100 Albert Road

T +61 3 9670 7264www.syrahresources.com.au

South Melbourne, VIC 3205

• • Syrah offered a Conditional Commitment6 from the US Department of Energy following finalisation of a non-binding term sheet for up to US$107 million loan7 to fund the Vidalia Initial Expansion8

• • Quarter end cash balance of US$205 million.

Balama Graphite Operation ("Balama") - Mozambique

Syrah Resources Limited (ASX: SYR) ("Syrah" or "Company") recorded a TRIFR of 0.9 at quarter end for Balama.

Balama produced 46kt natural graphite for the quarter at approximately 15kt per month, on average, for the first time since the September 2019 quarter. Maximum finished product inventory positions and ongoing disruption in the global container shipping market prevented Balama operating at a higher production rate. Strong operational performance was achieved with stable product quality and grade.

Plant recovery was 76%, which was lower than recovery achieved in campaign operations during Q4 2022. This was due to higher process variability, planned maintenance activities and the integration of a cyclone system in the secondary milling circuit during the quarter. Plant recovery was materially higher than when Balama last operated at an equivalent production rate in 2019.

Balama C1 cash costs (FOB Nacala/Pemba) for the quarter were US$464 per tonne, reflecting the benefit of fixed costs being spread over an increased production rate, and were within C1 cash costs (FOB Nacala/Pemba) guidance of US$430-470 per tonne at a 15kt per month production rate.

Balama C1 cash costs are expected to continue to reduce as production rate increases beyond 15kt per month with improved shipping options and availability and as improvement initiatives are embedded.

Syrah completed a major process improvement project at Balama with the commissioning of a

4 A$ proceeds converted into US$ based on the USD/AUD exchange rate of 0.71. The net proceeds of the Offer once settled were converted into US$ (representing the underlying currency in which the majority of the Vidalia Initial Expansion expenditure will be incurred).

• 5 Refer ASX releases 9 February 2022 and 3 March 2022.

• 6 A Conditional Commitment is offered by DOE prior to issuing a loan and indicates that DOE expects to support the Vidalia Initial Expansion project, subject to the satisfaction of certain conditions including fulfilling remaining legal, contractual, and financial requirements.

7 Includes estimated capitalised interest costs. Approximately US$104 million in advances from the DOE loan is proposed to be available to fund eligible costs of the Vidalia Initial Expansion project.

• 8 Refer ASX release 19 April 2022.

• 9 TGC = Total Graphitic Carbon.

cyclone system to increase liberation and optimise classification efficiency from the secondary milling circuit. The cyclone system forms part of the Company's recovery improvement plan at Balama and is expected to yield a step change in the recovery capability of the plant. Plant recovery has significantly improved since commissioning of the system in mid-March 2022. Post quarter end, Syrah took a final investment decision on the installation of a 11.25 MWp solar photovoltaic installation combined with an 8.5 MW/MWh battery energy storage system ("Solar Battery System") at Balama10. The Solar Battery System will be delivered under a build-own-operate-transfer arrangement, is expected to derive operating cost savings at Balama from the March 2023 quarter and further enhances the Company's environmental sustainability credentials.

At quarter end, employees at Balama increased to 451 excluding contractors, with recent hiring prioritising essential and critical roles. Rates of Mozambican national employment, local host community and female employment were 96%, 37% and 18%, respectively, of Balama's total labour contingent excluding contractors.

Syrah continues to actively monitor the security situation through various government, community and commercial channels. There have been no security related impacts on Syrah's operations, employees or contractors. The Company's regularly reviewed security procedures at Balama are currently deemed appropriate.

During the quarter, there was a significant reduction in the number of employees and contractors at Balama that tested positive for COVID-19. There are currently no COVID-19 positive cases detected at Balama. Syrah completed a vaccination program in the Balama community to increase vaccination rates within host communities. COVID-19 protocols remain in place at Balama and Syrah is fully compliant with Government protocols in relation to COVID-19.

Natural Graphite Sales and Marketing

Natural graphite sales for the quarter were 35kt with all 30kt finished product inventory contracted to customers. Natural graphite sales in March 2022 were 19kt incorporating the first spot breakbulk shipment from Pemba. Unprecedented container shipping market disruption caused by continuing China COVID-19 port and logistics restrictions and global trade imbalances is impacting the Company's ability to secure desired container capacity for Balama shipments from Nacala, and to match product sales to very strong underlying customer demand. Breakbulk shipments from Pemba will continue to be utilised to supplement container shipments.

• 10 Refer ASX release 6 April 2022.

• 11 Finished product inventory includes saleable inventory at Balama, Nacala, Pemba and USA.

The weighted average sales price of natural graphite sales for the quarter was US$573 per tonne (CIF). New contracts in the quarter were at prices materially higher than the average basket price. Fines sales accounted for approximately 79% of overall product sales. Fines market pricing increased through the quarter off a strong base in the December 2021 quarter with robust downstream anode demand and continued Chinese natural graphite supply disruptions. Coarse flake prices ex-China remained strong, with prices increasing through the quarter due to strong industrial demand and ongoing supply disruption, including from Ukraine and Russia. The weighted average sales price of natural graphite sales was US$590 per tonne (CIF) in March 2022. Significant sea freight rate volatility and surcharges are evident, caused by international logistics disruptions, with Syrah's current average shipping unit costs being approximately three times the long-term average.

Very strong forward demand for Balama's high quality products has continued through the March 2022 quarter with the order book continuing to strengthen despite the seasonal restart of Chinese natural graphite production. Demand is consistent with strong growth in Chinese and global EV demand and continuing increases in Chinese anode production. Robust forward contracting with end-user customers is underpinning more than 90kt of natural graphite sales orders for the June 2022 quarter and into the second half of 2022 at higher prices for new contracts.

Natural graphite production from several major processing facilities in China were negatively impacted by environmental issues prior to the seasonal winter outage and ongoing COVID-19 related interruptions. Chinese natural graphite inventory positions have been rapidly drawn down during the seasonal winter outage due to the disruption in Chinese production and the challenges in the shipping market hindering imports into China. The extent of ongoing disruption and environmental constraints on Chinese natural graphite production is currently unclear. However, Syrah's forward sales orders indicate customer concern regarding Chinese natural graphite production availability and market balance. Continuing record monthly Chinese anode production rates, in conjunction with supply disruptions, is driving very strong demand and supportive pricing from Chinese customers for new sales orders.

During the quarter, Syrah developed a major new logistics option to commence breakbulk shipments through Pemba port. Syrah's first spot breakbulk shipment of 10kt natural graphite from Pemba arrived in China in March 2022. Syrah has scheduled two spot breakbulk shipments in the June 2022 quarter. Breakbulk shipments from Pemba create an additional export route for Balama products, provide flexibility in managing inventory positions and will enable significantly higher product sales than otherwise could be achieved solely through Nacala port, given prevailing container availability constraints.

Container shipping market disruption continued during the March 2022 quarter due to the reintroduction of COVID-19 related protocols at Chinese ports and broader Chinese logistics and supply chain disruptions, and trade flow impacts resulting from the Ukraine conflict. The Company continues to work closely with its container shipping service providers through Nacala to secure increased container shipping capacity. Improvement is expected with additional vessel services and container equipment for East Africa being planned. The integration of breakbulk shipping throughPemba in combination with improving container shipping availability through Nacala will support Balama sales and production of at least 15kt per month.

Vidalia Active Anode Material Facility ("Vidalia") - USA

Syrah recorded a TRIFR of 0.0 at quarter end for Vidalia.

The Company took pivotal steps in its strategy to become a vertically integrated natural graphite AAM supply alternative for USA and European battery supply chain participant and OEM customers during the March 2022 quarter and post quarter end.

In February 2022, Syrah's Board approved a final investment decision on the initial expansion of Vidalia to 11.25ktpa AAM production capacity ("FID")3. The Company has invested significant time, effort and capital in de-risking its entry into the downstream AAM market, including construction and operation of the existing, commercial scale qualification facility in Vidalia, technical product development, product qualification with target customers and various phases of studies and engineering on the Vidalia Initial Expansion.

A detailed capacity assessment and updated estimate of total installed capital costs for the Vidalia Initial Expansion were completed prior to FID. Estimated parameters of the Vidalia Initial Expansion project were revised from the 2020 Bankable Feasibility Study ("BFS")12 as shown below.

Detailed engineering and long-lead item procurement with Worley Group (ASX: WOR) ("Worley") is well advanced and continuing in parallel with construction of the Vidalia Initial Expansion project. Detailed engineering was more than 60% completed at the end of the quarter.

During the quarter, Syrah awarded Worley a services contract to provide construction management services for the Vidalia Initial Expansion project via an integrated Worley and Syrah construction management team. These services are being delivered by Worley's USA Gulf Coast team. To preserve the project schedule ahead of the FID, Worley and Syrah jointly advanced transition construction management to deliver early works and long-lead items.

• 12 Refer ASX release 1 December 2020.

• 13 Includes US$400 per tonne (FOB Nacala) for Balama natural graphite, reflecting an approximate all-in cost of production at Balama at full plant utilisation. Includes costs of transporting Balama natural graphite from Nacala to Vidalia, AAM delivery costs from Vidalia to representative US battery manufacturing facilities and maintenance costs.

14 Includes all actual and estimated engineering, equipment, materials, construction, construction-related capitalised costs from 1 December 2020 and an unutilised contingency.

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