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Syrah Resources: Graphite's Elephant In The Room

(Editor's Note: Investors should be mindful of the risks of transacting in very illiquid stocks such as SYAAF. Syrah's listing in Australia, SYR.AX, offers stronger liquidity.)

The graphite sector

In 2011 the prices of natural flake graphite spiked as a result of rumored restrictions being placed on the mining and export of graphite from China. In reality the price spike was mostly caused by nervous buyers increasing their inventory to make sure they had an adequate supply of raw materials if supplies from China dried up.

The price spike encouraged several junior mining companies to turn their attention to graphite and the number of graphite exploration companies on the TSX venture exchange jumped from two to more than eighty in...

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