The Appen Ltd (ASX: APX) share price is falling lower today. This comes after the company announced a disappointing trading update to the market. At the time of writing, the Appen share price is trading down 11.1% at $26.60.

What’s driving the Appen share price lower?

Investors have sent the Appen share price to lows not seen since May after the company reported that COVID-19 impacts have disrupted its performance for the current quarter of FY20.

The company – a global language technology data provider – noted a slowdown in customer spend in both in April and August announcements to the market. While the current quarter has improved over the previous period, Appen attributed this to the time of year, which routinely sees a lift in revenue from customers.

As the pandemic has intensified in the United States, Appen’s major customers have shifted their priorities and activities. This has impacted the company’s face-to-face sales and customer engagement norms, thus leading to lower revenue being achieved.

In light of these developments, Appen anticipates underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $106 million to $109 million. This reflects a substantially lower guidance range of the previously indicated $125 million to $130 million EBITDA in its half-year August report.

Further weighing down the expected results is the surging Australian dollar against the US dollar. In December, the exchange rate moved 4 cents to AUD$1 = US$0.74, impacting EBITDA by up to a further $2 million.

Looking ahead

Despite this, Appen revealed that the second-half EBITDA is forecast to grow more than 30% over the period.

The company said that it continued to win new customers in industries less affected by COVID-19. These include shipping, automotive, education and healthcare.

In addition, its major clients have transferred their focus to new product development, in which Appen is seeing a significant increase in work load.

A report from IDC Worldwide Artificial Intelligence Systems Spending Guide estimates that artificial intelligence (AI) spend is increasing 28% annually. Appen reiterated that long-term trends remained positive and it projects a strong rebound post COVID-19.

Appen share price summary

After losing 11% today, the Appen share price has fallen almost 40% from its 52-week high of $43.66. The company’s shares have risen 20% since the start of the year.

Appen has a market capitalisation of $3.2 billion and a price-to-earnings (P/E) ratio of 72.3.

More reading

• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Why Appen, McPherson’s, Northern Star, & PWR shares are dropping lower
• 3 stellar ASX growth shares to buy
• 2 stellar ASX tech shares to buy next week
• Why Appen, Chalice Gold Mines, Piedmont Lithium, & Zip shares are dropping lower

Aaron Teboneras owns shares of Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. 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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The S&P/ASX 200 Index (ASX: XJO) has followed the lead of U.S. markets and is on course to end its winning streak. In afternoon trade, the benchmark index is down 0.6% to 6,688 points.

Four shares that have not let that hold them back today are listed below. Here’s why they are storming higher:

Asaleo Care Ltd (ASX: AHY)

The Asaleo Care share price jumped 22% to $1.23 this morning before being hurriedly placed into a trading halt. The catalyst for this was news that the personal care products company has received an unsolicited takeover proposal. Asaleo Care has requested the halt until it releases an announcement in relation to the takeover proposal.

Fortescue Metals Group Limited (ASX: FMG)

The Fortescue share price has continued its positive run and climbed a further 3% to $22.50. Investors have been buying the iron ore producer’s shares after the price of the steel-making ingredient rose again. According to CommSec, the spot iron ore price pushed through the US$150 a tonne level overnight.

Perpetual Limited (ASX: PPT)

The Perpetual share price is up almost 6% to $35.98. The catalyst for this appears to be a broker note out of Credit Suisse this morning. According to the note, the broker has upgraded the fund manager’s shares to an outperform rating with a $39.00 price target. This follows the release of its investor day update on Wednesday.

Starpharma Holdings Limited (ASX: SPL)

The Starpharma share price has surged 11% higher to $1.45. This follows the release of an announcement by the biopharmaceutical company which revealed that it expects to release its COVID-19 antiviral nasal spray in the first quarter of next year. It will also be marketed as an antiviral nasal spray for other important respiratory viruses such as influenza and respiratory syncytial virus (RSV). The product will go on sale in Europe initially.

More reading

• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Starpharma (ASX:SPL) share price jumps 15% after COVID-19 nasal spray update
• Inquiry calls moratorium on mining projects after Rio Tinto (ASX:RIO) Juukan debacle
• The Fortescue (ASX:FMG) share price has doubled in 2020: Too late to invest?
• Citigroup downgrades these ASX mining stocks after a big rally

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Starpharma Holdings Limited. The Motley Fool Australia has recommended Starpharma Holdings Limited. 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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The shares of whisky and vodka distiller Top Shelf International Holdings Ltd (ASX: TSI) made their debut on the ASX today, after an initial public offering (IPO) pricing it at $2.21.

The Top Shelf share price slipped to $2.19 inside the opening few minutes of trading, and is now trading down further to $2.12 at the time of writing.

More about the Top Shelf IPO

Top Shelf is the brainchild of former Shelf CFO, Drew Fairchild, who’s also currently sitting on the board of ASX-listed workforce management software company Damstra Holdings Ltd (ASX: DTC). 

The company distils its own brands, including the flagship Ned Whisky and also Grainshaker Vodka, from its state-of-the-art $20-million Campbellfield site in Melbourne. 

Top Shelf has raised $47.2 million in the IPO at $2.21 a share – split between a $35 million primary issuance of new shares, and a $12.2 million selldown by existing shareholders. The pricing values the company at $90.5 million, which is 4.5 times the forecast revenue for FY21.

According to the prospectus, the company has yet to turn a profit – posting negative earnings before interest, tax, depreciation, and ammortisation (EBITDA) of $3.1 million in FY20, and negative $1.3 million in FY19.

Top Shelf says the fresh funds would be used to invest in sales and marketing, as well as funding the acquisition of the Eden Lassie agave farm. Agave is the main ingredient used in the distilling of tequila or mezcal, which it will launch next year.

Business update

As part of the float today, Top Shelf has also released an update saying that strong sales momentum has continued in November and for the key December quarter, with sales growth on track to achieve Top Shelf’s FY21 revenue forecast of $20 million.

The revenue forecast is mainly driven by the ongoing rollout of Ned Whisky across Australian retail stores, and the successful initial release of the Grainshaker Australian Vodka, both on-premise and online.

Top Shelf also said that 150,000 agave plants have now been planted at the Eden Lassie Agave Farm, with a further 100,000 plants in the nursery available for planting.

More reading

• Freedom Foods (ASX:FNP) faces class action lawsuit
• The two ASX stocks most impacted by the dangerous rise of the Aussie dollar
• Is Moderna stock a hold?
• Why has the CSL (ASX:CSL) share price seemingly gone nowhere this year?
• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high

Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Damstra Holdings Ltd. The Motley Fool Australia has recommended Damstra Holdings Ltd. 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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The embattled Freedom Foods Group Ltd (ASX: FNP) now has yet another thing to worry about.

Freedom Foods has announced to the market this morning that it is now facing a class action lawsuit from law firm Slater & Gordon Limited (ASX: SGH).

The announcement this morning was a short one:

Freedom  Foods Group Limited advises that a Victorian Supreme Court class action proceeding was commenced against the Company and its auditors, Deloitte Touche Tohmatsu, and served on the Company on 9 December 2020. The proceeding alleges breaches of the Corporations Act 2001 (Cth), Australian Securities and Investments Commission Act and Australian Consumer Law.

The Company has appointed Arnold Bloch Leibler (ABL) to defend the proceeding.

According to reporting in the Australian Financial Review (AFR) today, the class action is on behalf of shareholders who bought or acquired Freedom shares between the dates of 7 December 2014 and 24 June 2020 (when the company was placed in a trading halt, which remains in place to this day).

The AFR reports that the class action’s “key allegation” is that Freedom “withheld material information relating to its true asset position since 2014”. It alleges that Freedom Foods “engaged in significant breaches of its continuous disclosure obligations and misleading and deceptive conduct”. It also alleges Freedom’s auditor Deloitte “failed in its duties in signing off on Freedom Foods’ accounts each financial year between 2014 and the first half of 2020”.

How did Freedom Foods get here?

Freedom Foods has had a year I’m sure it (and its shareholders) would rather forget. It all started back in June, when it was announced the company’s former chief executive officer, Rory McLeod, advised he would be going “on leave”. A few days later, it was announced that McLeod, as well as Freedom’s chief financial officer, would be leaving the company.

This came after revelations there had been some serious irregularities in Freedom’s accounting books, which failed to note that large volumes of food stocks had perished in storage. This lead to multiple writedowns amounting to around $60 million in inventories and a further ~$10 million in ‘bad debts’.

Following these embarrassing revelations, it was announced the company would go into an ASX trading halt until 30 October. Well, 30 October came and went and Freedom shares still remain in purgatory.

The company finally released its full-year results for the 2020 financial year last Monday (30 November) and told investors it had sustained a loss after tax of $174.5 million in FY2020.

Freedom Foods’ Interim Chief Executive Officer, Michael Perich, called these number a “deeply disappointing set of results for Freedom Food Group, its people and its shareholders”.

More reading

• Freedom Foods (ASX:FNP) reveals $174.5m loss and $280m capital raising plan
• Freedom Foods (ASX:FNP) prepares for return to trading
• G8 Education (ASX:GEM) share price rebounds after lawsuit news

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Freedom Foods Group Limited. 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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The Aussie looks poised to push to new 28-month highs and that spells bad news for some of the most popular ASX stocks.

Economists are warning that we are approaching a dangerous level. This is where the currency will put a brake on the economy and company earnings, reported the Australian Broadcasting Corporation.

The Australian dollar is hovering close to US74.5 cents currently and experts are predicting it could go higher in 2021.

Some S&P/ASX 200 Index (Index:^AXJO) stocks may have to downgrade their earnings guidance as soon as the March quarter, warned UBS.

Currency headwinds pressuring some ASX stocks

The broker worked out the ASX stocks that are most likely to suffer as it’s forecasting the Aussie battler to hit US78 cents by end of 2021 and US82 cents the following year.

“COVID saw large fluctuations in the AUD, with the AUD hitting a low of 0.57 on 23 March,” said UBS.

“Since then, as a ‘risk-on’ currency, the AUD has appreciated 29% as markets have recovered.”

Calculating the impact of the Aussie

Working out the direct earnings impact of the Australian dollar-to-US dollar exchange rate is not easy. It’s much tricker when you try to link the currency pair to share price movements.

This is because offshore earners are often exposed to other currencies too, such as the Euro or British pound.

Further, share price movements are influenced by a host of other factors, such as market sentiment and outlook.

Cochlear share price most negatively correlated

However, UBS found that two ASX stocks in particular are most vulnerable to a strong Australian dollar.

The first is the Cochlear Limited (ASX: COH) share price. The hearing implant developer generates income in both the US dollar and Euro, but reports in Australian dollars.

The Euro could offset some of the earnings pressure from its US operations, but that may not be enough.

“A 1% increase in the AUD/USD has been associated with a -0.29% market-relative return for Cochlear, accounting for the historical relationships between other currency pairs,” explained UBS.

“A 1% increase in the AUD/USD has been associated with a -0.52% market-relative return for Cochlear, not accounting for the relationship between other currency pairs.”

Of all the ASX stocks under UBS’ coverage, the COH share price is the most sensitive to exchange rates.

CSL share price second most impacted

The second most sensitive stock is the CSL Limited (ASX: CSL) share price. The broker found that a 1% change in the currency pair coincided with a -0.27% market-relative return for the blood products maker, if other currencies are accounted for.

Otherwise, the CSL share price generated a 0.42% market-relative loss if only the AUD/USD rate is accounted for.

More reading

• Why has the CSL (ASX:CSL) share price seemingly gone nowhere this year?
• ASX 200 down 0.4%: Appen downgrades guidance, Fortescue hits a record high
• Why the Michael Hill (ASX:MHJ) share price is leaping 11% higher
• 5 things to watch on the ASX 200 on Thursday
• 2 fantastic ASX healthcare shares to buy for 2021

BrenLau owns shares of CSL Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

A recent downgrade from buy to hold from a Wall Street analyst has Moderna (NASDAQ: MRNA) stock under pressure. Needham analyst Alan Carr has removed his $110 price target on the stock, citing valuation concerns.

Moderna’s market cap has swelled 885% this year to around $67 billion at recent prices. Despite coming under pressure recently, this is still one of the best performing large-cap healthcare stocks of 2020.

By the end of 2020, Moderna thinks it can deliver enough doses of mRNA-1273 for 10 million Americans, and perhaps produce enough for 500 million people in 2021. That could lead to enormous sales next year, but they probably won’t last.

Commercial-stage biotechnology companies generally trade at mid-single-digit multiples of total revenue when that revenue is expected to continue growing at a healthy pace. While Moderna could record a huge windfall in 2021, it isn’t likely to last. The next vaccine rolling through Moderna’s pipeline probably won’t have a chance to launch until 2024.

Forget about holding Moderna. It’s time to think about selling your shares. If all goes well with BNT162b2 and at least a few more names on a huge list of coronavirus vaccine candidates, Moderna won’t need to manufacture anything at scale by the end of 2022. Without any means to support its enormous valuation, it’s hard to see how the stock can rise over the long run. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• CSL (ASX:CSL) share price on watch after hints of ‘far more robust’ vaccine
• Which ASX travel shares performed the best in November? 
• 3 key advantages Moderna holds over Pfizer and AstraZeneca
• Why Platinum Asset’s healthcare fund doesn’t own CSL (ASX:CSL) shares
• Why AstraZeneca’s potential vaccine is more exciting than you think

Cory Renauer 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Compared to its stellar rise in 2019, the CSL Limited (ASX: CSL) share price has seemingly gone nowhere fast this year. This is despite solid earnings and a contribution to the COVID-19 vaccine efforts. How have other S&P/ASX 200 Index (ASX: XJO) healthcare shares performed and why hasn’t the CSL share price pushed higher? 

Healthcare winners and losers

ASX 200 healthcare shares including Fisher & Paykel Healthcare Corp Ltd (ASX: FPH), Sonic Healthcare Limited (ASX: SHL) and ResMed CDI (ASX: RMD) have all run into record highs following the tailwinds that COVID created for their earnings and businesses. These ranged from significant demand for respiratory-related devices created for Fisher & Paykel and ResMed, to supporting COVID testing around the world for Sonic Healthcare. 

Conversely, there have been some healthcare companies left out in the cold during the pandemic. These include Cochlear Limited (ASX: COH) and Ramsay Health Care Limited (ASX: RHC), both of which  experienced a significant decline in earnings due to lockdown measures. Cochlear’s FY20 net profit after tax dipped 42% due to the deferral of cochlear implant surgeries across the world. Similarly, Ramsay’s FY20 statutory net profit after tax was down 47.9% as surgeries were postponed.

CSL in the middle 

CSL hasn’t quite experienced the same tailwinds as Fisher & Paykel or ResMed, but its earnings haven’t been severely punished like Cochlear or Ramsay. 

In FY20, CSL’s revenues increased 9% and net profit after tax was up 17% on a constant currency basis. The business has experienced solid earnings growth across its portfolio and expects demand to remain strong, especially for immunoglobulin and influenza products which contribute more than half of the company’s revenue. 

CSL has not, however, remained immune to COVID-related challenges. A number of its R&D trials were paused as it needed to prioritise patient safety during the pandemic. Furthermore, plasma donors fuel the company’s pipeline and revenue. In its FY20 report, CSL revealed its plasma collections had been adversely impacted with collection volumes down 5% compared to FY19.

According to CSL, the company is implementing a number of initiatives to try to mitigate these impacts. Moving forward, CSL is targeting revenue growth in the range of 6% to 10% and net profit growth between 3% and 8%. 

How has the CSL share price performed in 2020?

At the time of writing, the CSL share price has increased 9.68% in year-to-date trading. Whilst this is a significant outperformace when compared to the wider ASX 200, CSL shares still remain around 12% below the 52-week highs we saw in February this year. 

More reading

• 2 fantastic ASX healthcare shares to buy for 2021
• CSL (ASX:CSL) share price on watch after hints of ‘far more robust’ vaccine
• Brokers name 3 ASX shares to buy right now
• CBA (ASX:CBA) and the ASX banks just had an amazing month
• Why healthcare, tech and consumer staples shares underperformed the ASX 200 in November

Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd. The Motley Fool Australia has recommended Cochlear Ltd., Ramsay Health Care Limited, ResMed Inc., and Sonic Healthcare Limited. 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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At lunch the S&P/ASX 200 Index (ASX: XJO) is off its lows but remains on course to end its winning streak. The benchmark index is currently down 0.4% to 6,702.9 points.

Here’s what is happening on the market today:

Appen downgrades guidance.

The Appen Ltd (ASX: APX) share price has been sold off on Thursday after it downgraded its FY 2020 guidance. Due to COVID-19 headwinds, the artificial intelligence services company is now expecting to report full year underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $106 million to $109 million (or $108 million to $111 million when applying the originally assumed exchange rate). This is a reduction from its previous guidance of $125 million to $130 million. Management advised that many of its major customers in California have been hit by lockdowns, which has impacted investment decisions.

Fortescue hits record high.

The Fortescue Metals Group Limited (ASX: FMG) share price continued its ascent and hit a record high of $22.58 this morning. Investors have been buying the iron ore producer’s shares again on Thursday after the price of the steel making ingredient continued to rise. According to CommSec, the spot iron ore price pushed through the US$150 a tonne level overnight.

Gold miners tumble lower.

Australian gold miners have come under pressure today after the spot gold price tumbled lower overnight. The price of the precious metal dropped over 2% after vaccine optimism gave risk sentiment a boost and weighed heavily on safe haven assets. The likes of Evolution Mining Ltd (ASX: EVN) and Northern Star Resources Ltd (ASX: NST) are trading notably lower and have dragged the S&P/ASX All Ordinaries Gold index down 3.3% at lunch.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Perpetual Limited (ASX: PPT) share price with a gain of 6%. This morning Credit Suisse upgraded the fund manager to an outperform rating with a $39.00 price target. The worst performer has been the Appen share price by some distance with a 12% decline. This follows its guidance downgrade.

More reading

• Why Appen, McPherson’s, Northern Star, & PWR shares are dropping lower
• Why the Michael Hill (ASX:MHJ) share price is leaping 11% higher
• Inquiry calls moratorium on mining projects after Rio Tinto (ASX:RIO) Juukan debacle
• Evolution Mining (ASX:EVN) share price tumbles lower despite Crush Creek acquisition
• Saracen (ASX:SAR) and Northern Star (ASX:NST) shares on watch after merger update

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. 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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In late morning trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its winning streak. At the time of writing the benchmark index is down 0.4% to 6,700.7 points.

Four shares that have fallen more than most today are listed below. Here’s why they are dropping lower:

Appen Ltd (ASX: APX)

The Appen share price has sunk 12% lower to $26.27 following the release of an update. The artificial intelligence services company revealed that COVID-19 has been weighing on its performance and is expected to lead to it falling well short of guidance in FY 2020. It is now forecasting underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $106 million to $109 million (or $108 million to $111 million when applying the originally assumed exchange rate). This is down from its previous guidance of $125 million to $130 million.

McPherson’s Ltd (ASX: MCP)

The McPherson’s share price has dropped 8% to $1.15. Investors have been selling the health, wellness, and beauty products company’s shares after it announced the departure of its CEO after a difficult year. Laurie McAllister has resigned with immediate effect just days after the company completed the acquisition of the Global Therapeutics business from Blackmores Limited (ASX: BKL).

Northern Star Resources Ltd (ASX: NST)

The Northern Star share price is down 5.5% to $12.30. This follows a sizeable pullback in the spot gold price overnight after risk sentiment improved and demand for safe havens softened. It isn’t just Northern Star that is sinking lower. The S&P/ASX All Ordinaries Gold index is down 3.6% at the time of writing.

PWR Holdings Ltd (ASX: PWH)

The PWR share price has fallen 3.5% to $4.98 despite the release of a positive update. PWR revealed that trading had been strong recently. As a result, for the first half of FY 2021, it expects EBITDA in the range of $10 million to $11.5 million. This represents an increase of more than 30% on the prior corresponding period. However, with its shares recently hitting a record high, some investors may have been expecting even stronger growth.

More reading

• The PWR Holdings (ASX:PWH) share price dips on market update
• Why the McPherson’s (ASX:MCP) share price is sinking lower again
• Saracen (ASX:SAR) and Northern Star (ASX:NST) shares on watch after merger update
• Which ASX shares will China ‘punish’ next?
• 5 things to watch on the ASX 200 on Tuesday

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Appen Ltd. The Motley Fool Australia owns shares of and has recommended Blackmores Limited. The Motley Fool Australia has recommended PWR HLDING FPO. 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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The Syrah Resources Ltd (ASX: SYR) share price won’t be going anywhere today after it requested a trading halt in order to launch a capital raising.

What did Syrah announce?

This morning the graphite producer announced a capital raising which aims to raise a total of $124 million. This comprises a convertible note deed, a fully underwritten institutional placement, and a share purchase plan.

According to the release, Syrah is raising approximately $56 million (US$42 million) via a fully underwritten placement to professional and sophisticated investors at a fixed offer price of $0.90 per share.

This represents an 11.3% discount to its last close price.

It will then attempt to raise a further $12 million (US$9 million) via a non-underwritten share purchase plan. This will be offered to eligible shareholders in Australia and New Zealand following the completion of the placement.

Finally, a further $56 million (US$42 million) will be raised via a convertible notes issue in two equal tranches before 31 March 2021 and 30 June 2021 to AustralianSuper. This remains subject to certain conditions, such as the completion of the placement and the company obtaining shareholder approval.

Why is Syrah raising funds?

The release explains that the proceeds will be used to progress Syrah’s natural graphite Active Anode Material (AAM) facility in the United States towards a final investment decision for the construction of a 10ktpa AAM plant.

Earlier this month Syrah completed a Bankable Feasibility Study (BFS) for the expansion of its facility, which it believes represents an exciting milestone for the company.  

The BFS confirmed a strong business case for natural AAM production at the facility, with completion of the study allowing discussions for project development to progress with potential offtake partners and financiers.

In addition to this, the proceeds will also provide additional liquidity to manage a restart decision at Balama Graphite Project in Mozambique in an orderly manner. This is subject to market demand conditions, which are looking more favourable.

Management notes that it has observed positive leading market indicators in relation to Electric Vehicle (EV) sales growth and increased Government policy support for decarbonisation of the transport sector.

More reading

• Here’s why the Syrah (ASX:SYR) share price jumped to a 52-week high today

Motley Fool contributor James Mickleboro 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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