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Syrah Resources Upgrades Graphite Resource At Balama West

Syrah Resources (ASX: SYR) has updated Indicated and Inferred Resources at the Ativa Zone in the Balama West Project, Mozambique, to 51 million tonnes at 19.9% total graphitic carbon and 0.38% V2O5 at a 13% TGC cut-off.

Using a higher 20% cut off, Ativa's Resource stands at 30Mt at 21.8% TGC.

To put this in context, while this is just a small part of the billion plus Inferred Resource for the overall Balama West Project, Ativa has as tonnage that far exceeds that of Mason Graphite's (CVE:LLG) Lac Guéret and Focus Graphite's (FRA: FKC, OTCMKTS: FCSMF) Lac Knife deposits in Canada combined and at a higher grade than both.

Lac Guéret has a Measured and Indicated Resource of 7.6Mt at 20.4% TGC while Lac Knife has a Measured and Indicated Resource of 8Mt at 16% TGC. These are reported to be the world's highest grade graphite deposits based on claims by their owners.

The latest Resource at Ativa is more than double the previous Inferred Resource of 21Mt at 20.8% TGC and 0.38% V2O5 and comprises an Indicated Resource of 13.5Mt at 19.8% TGC and 0.4%V2O5 and an Inferred Resource of 12Mt at 19.9%TGC and 0.4% V2O5.

In addition, anticipated mining costs are anticipated to be very low for the initial years of mining as the graphitic rocks in the oxidation zone, which extends to about 60 metres, is very friable, allowing the graphite flakes to be liberated with very little energy required.


From 0 to 50 metres, the Indicated Resource currently stands at 5.5Mt at 20.2% TGC and 0.38% V2O5 for 1.1 million tonnes of contained graphite and 21,000 tonnes of contained vanadium.

From 0 to 100 metres, the Indicated Resource is 12Mt at 19.9% TGC and 0.40% V2O5 for 2.4 million tonnes of contained graphite and 48,000 tonnes of contained vanadium. The contained graphite is considered sufficient to sustain an envisaged Ativa pit life of well over 10 years.

The Inferred Resource is considered to be readily upgradable to the higher confidence Indicated category given that the company has drilled only a limited number of holes greater than 100 metres in depth as its recent infill drilling program was focused on proving up an Indicated Resource at shallow depth.

Accordingly, most of the resource below 100 metres is still in the Inferred Resource category.


Syrah has completed infill drilling at Balama East to upgrade the resource at the Mepiche Zone - currently 145Mt at 15.1% TGC and 0.43% V2O5 and to define the Sushi Zone. Initial assays are expected soon.

It has also moved the diamond drill rig back to Balama West to conduct infill drilling at the Mualia Zone, which currently hosts an Inferred Resource of 136Mt at 16.6% TGC and 0.43% V2O5.

These programs are likely to add further to the resource at the project.

Test work carried out last month has demonstrated that a concentrate grading over 96% could be produced using simple flotation, which could result in substantially lower processing costs.

This follows metallurgical testwork in September 2013 which showed that the magnetic vanadium bearing minerals can be concentrated to about 5% V2O5 by simple processing of the tailings from the graphite extraction process.

Vanadium production could increase cash flow at minimal additional cost.

Metallurgical testing has commenced on converting Balama graphite to spherical graphite used in lithium ion batteries.

The company also expects to receive its Mining Licence in the current quarter, noting that the application is progressing well through the Mozambique regulatory review process.


Syrah's Balama West Project continues to excite with the latest Resource update highlighting that just one small part of it, the Ativa Zone, is competitive with and in fact exceeds two world class graphite deposits in both tonnage and grade combined.

Shares in the company should trade higher on the news and there remains considerable upside in the price in the near future with a Feasibility Study based on the new resource expected to be delivered soon in the current quarter.

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