Syrah Resources (ASX: SYR) is raising A$16 million through a fully underwritten placement to fund drilling as well as Scoping and Feasibility Studies at its wholly owned Balama Graphite Project in northern Mozambique.
Balama is increasingly looking like an exceptional deposit by global standards with the latest diamond drilling results showing wide intercepts of very high grade graphite and vanadium.
Very high grade zones averaging greater than 20% total graphitic carbon and 0.33% vanadium were intersected within 5 metres of surface with widths from 58 to 110 metres.
The highest grades reported were 30.3% total graphitic carbon and 0.88% vanadium over 2 metres.
Proceeds from the placement will also be used to define the JORC Resource, carry out exploration on Syrah's other African mineral projects and working capital.
The placement of about 7.15 million new Syrah shares is being offered to institutional and sophisticated investors at a price of A$2.25 per share, a 16% discount to the company's closing price of A$2.68 on 10 October 2012 and a 14% discount to its five day VWAP of A$2.62.
The new shares will rank equally with existing Syrah shares on issue and the offer is fully underwritten.
Shares in Syrah, which were placed into a halt earlier on 10 October, will remain in pre open until the earlier of the results of the capital raising being released or the start of trading on Monday, 15 October 2012.
The latest drilling has returned very high graphite grades that are believed to be among the highest recorded globally.
- 58 metres at 20% total graphitic carbon and 0.36% vanadium from 4.5 metres;
- 28.75 metres at 21.1% total graphitic carbon and 0.32% vanadium from 2.2 metres, and 71.7 metres at 21.9% total graphitic carbon and 0.48% vanadium from 42.8 metres;
- 79 metres at 20.4% total graphitic carbon and 0.42% vanadium from 15.4metres; and
- 58.95 metres at 20.7% total graphitic carbon and 0.32% vanadium from 8 metres.
All holes except one, which intercepted a 35 metre wide pegmatite near surface, began and ended in graphite and vanadium mineralisation.
The drill assays also confirm that there are two very high grade graphite and vanadium zones at or near surface at Balama West.
The first is near the crest of Mount Nassilala where the original trenches were dug. The high grade graphite and vanadium mineralisation encountered in these trenches extends down dip and were also encountered in drill holes previously announced.
Based on both the trench assays and the drill core assays, this very high grade zone appears to average between 13% and 18% total graphitic carbon and 0.35% and 0.4% vanadium, depending on the cut-off grade used.
The second extremely high grade zone is located about 300 metres to the north on the lower slopes of Mount Nassilala.
This zone appears to be even higher grade than the zone to the south and averages over 20% total graphitic carbon and 0.35% to 0.45% vanadium.
This zone is open to the north, west and east. A further line of holes stepping 200 metres back to the north and west are planned to be drilled in the near future.
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