Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Syrah Resources Heads For Maiden Graphite Resource At Balama

Syrah Resources (ASX: SYR) is making solid progress on advancing its Balama Graphite and Vanadium Project in Mozambique towards the definition of a maiden JORC resource for the Balama West deposit by the end of December or early January.

The company is well advanced on a Scoping Study for the project, scheduled for delivery in early 2013, and the completion of a resource estimate will allow mining studies to begin.

Last month Syrah outlined the exploration potential for Balama, defining an initial exploration target of 700 to 900 million tonnes at 10% to 11% total graphitic carbon and 0.2% to 0.3% vanadium.

While open pit planning will focus on early delivery of very high grade mineralisation, above 15% total graphitic carbon, with a high proportion of very coarse flake graphite to maximise cash flow, planning will also examine pit designs that will deliver a 100 year life-of-mine ore supply.

However, Syrah believes that the actual mine life at Balama will be many times in excess of this.

Metallurgical testwork

Metallurgical testwork has begun at the Mintek laboratory in Johannesburg, South Africa.

Comminution testwork has begun and mineralogical samples collected. Mineralogical investigations will target the vanadium associated with the graphite and support an additional phase of testwork specifically targeted at vanadium recovery.

Knight Piesold has been engaged to complete a scoping level Tailings Storage Facility assessment with the objective of minimising start-up capital requirements while also looking at 100 year life-of-mine site layout requirements.

The Scoping Study will assess a range of process rate options with aim of establishing Balama as the major global supplier of graphite concentrate in the lowest cost quartile.

Drilling progress

The company is advancing its 2012 drilling campaign having completed 17 diamond holes at Balama West for a total of 4,407 metres and 20 diamond holes at Balama East for a total of 3,929 metres.

Of these, 14 holes from Balama West and 20 holes from Balama East will be used to calculate the maiden JORC resource for each deposit.

Twenty three diamond drill holes and 11 trenches were used to support the exploration target.

Balama has extensive zones of graphite grading between 15% and 20% total graphitic carbon and vanadium grading at 0.5% vanadium.

Further assays from Balama East are expected in the near future.

A reverse circulation drill rig began drilling in November and had completed nine holes for a total of 391 metres by the end of the month.

The reverse circulation drill rig will be used to:

- Delineate the geometry of the pegmatite dyke intersected in drill hole BMD0011 at Balama West for mine planning purposes;
- Define the northern limits of the Balama mineralisation; and
- Conduct sterilisation drilling to support detailed site layout planning for the infrastructure associated with project development.

The 2012 drilling campaign will cease in mid-December due to the onset of the wet season. The next drilling campaign is expected to begin in April 2013.

Environmental and Social Impact Assessment

Syrah will receive the completed Scoping Study Environmental and Permitting assessment from lead consultant, Snowden Group, in mid-December.

This section of the study will be used to expedite the pathway into the Environmental and Social Impact Assessment (ESIA).

Syrah has begun a tender process to establish the Mozambican consultant team that will deliver the ESIA for Balama.

While the bulk of the ESIA will be conducted concurrently with a Definitive Feasibility Study in 2013, numerous studies will begin in the forthcoming wet season.

Syrah is also aiming to engage an experienced consultant to augment the Community Relations consultation program.

Balama marketing

The company has also appointed Sait Uysal as Global Marketing Manager to begin marketing Balama graphite to potential offtake partners.

Uysal has extensive experience in the marketing of graphite for operating graphite mines, and will be representing Syrah's interests at the 2nd Graphite Conference being held in London this week.

Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.