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Graphite explorer, Syrah Resources Limited (ASX: SYR) has witnessed an increase of 19% in estimated Mineral Resources at Balama Graphite Operation as compared to the previous estimates as at 31 December 2017.
Syrah Resourcesâ shares were up 4.206% in the intraday trade as on 29 March 2019 (12:50 PM).
In an update provided by the company on its graphite Ore Reserve and Mineral Resource estimates for the Balama Graphite Operation, the company informed that as at 31 December 2018, Balama had a significant graphite Ore Reserve of 113.3 Mt at 16.36% total graphitic carbon (TGC) for 18.5Mt graphite at 7.2% cut-off grade. These Mineral Resource estimates are significantly higher than the graphite Ore Reserve of 114.5Mt at 16.5% and 9% cut-off grade, recorded in 2017.
The revised Balama Mineral Resources reported in accordance with the JORC Code as at 31 December 2018 is 1,423Mt at 10% TGC (average grade) compared to 1,191 Mt at 11% TGC (average grade). The increase in Mineral Resource was driven by additional extrapolation which is warranted by the improved representation of mineralisation continuity, primarily at Balama East.
As per the companyâs announcement, around 90 percent of the Balama West and Balama East estimates are from depths of less than around 275m and 350m respectively. The company believes that the estimates are having reasonable prospects of extraction by open pit mining.
The Balama project is situated in the Cabo Delgado province of northern Mozambique and it was transitioned to operations on 1 January 2018 with production focused on ramp up and optimisation. The project produced 104kt of natural flake graphite in its first year of production in line with revised forecasts, following the October outage. The average graphite recovery from Balama achieved in 2018 was 53% which was lower than plan. However, due to the production improvement plan, significant improvement in recovery was achieved over the course of the year. The project witnessed the recovery of 70% in the fourth quarter with a peak daily recovery of 90% achieved.
In the Annual report, the companyâs Chairman, James Askew has described 2018 as âthe Balama commissioning yearâ. 2018 was a year of milestones for Syrah as it transitioned the Balama project from construction to operations. The Balama Graphite Operation performance was challenging during the year mainly due to a minor plant fire incident which delayed performance delivery. As a result of this, Syrahâs valuation, and shareholder wealth was substantially eroded over the year.
In 2019, the company is mainly focusing on penetrating the market for its graphite products at competitive prices. The management of the company is continuing with the vision of establishing Syrah as the leading high-quality graphite producer and downstream anode company globally.
On the stock performance front, the share price of the company decreased by 53.48% in the past six months as on 28 March 2019. SYRâs shares are trading at $1.115 with a market capitalization circa $368.4 million as on 29 March 2019 (AEST 12:50 PM).
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