The Syrah Resources Ltd (ASX: SYR) share price is surging this morning and is now up 18.95% at $1.868 apiece.
Investors are reacting to a company announcement from Syrah today advising the market it has been offered a conditional loan from the US Department of Energy (DOE).
What did Syrah announce today?
The Syrah Resources share price is skyrocketing after the company said it has finalised a non-binding term sheet for a conditional US$107 million loan from the DOE.
Syrah notes the loan will be used “to fund the initial expansion of its Vidalia active anode material facility in Louisiana to 11.25ktpa AAM production capacity”.
The facility will be open to the group’s subsidiary, Syrah Technologies. The proposed loan is to be made under DOE’s Advanced Technology Vehicles Manufacturing (ATVM) loan program in support of US President Joe Biden’s critical minerals strategy.
The loan’s term sheet states it is for a maximum of US$107 million with “a term of up to approximately 10 years from financial close”.
“[The] DOE has US$17.7 billion in uncommitted loan authority under the ATVM program to support the manufacture of eligible advanced technology vehicles including electric vehicles (EVs), and qualifying components and materials, in the USA,” it said.
“If finalised, the loan to Syrah Technologies would be the first from the ATVM loan program since 2011 and the first ever from the ATVM loan program to a materials processing facility,” it added.
“Other recipients of funding from the ATVM loan program include Ford, Nissan, and Tesla.”
To fund the remaining $165 million of the Vidalia project, Syrah says it will use proceeds obtained from the equity raising completed earlier this year.
Speaking on the announcement fuelling the Syrah Resources share price, managing director and CEO Shaun Verner said:
The finalisation of a term sheet and offer of a Conditional Commitment from DOE for a loan under the ATVM program highlights Vidalia’s strategic position in the USA and provides strong validation of Syrah, Vidalia and the Vidalia Initial Expansion. Importantly, the loan will allow Syrah to accelerate its growth strategy in its downstream business and support the rapidly growing EV and battery supply chain in the USA.
In the last 12 months, the Syrah Resources share price has spiked 78% after some wide-reaching volatility. This year to date, however, it has slipped 3%.
The post Syrah Resources share price booms 19% amid show of US support appeared first on The Motley Fool Australia.
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Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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.
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