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Syrah Resource Signals Initial Graphite Exploration Target Of Up To 900Mt At Balama

Syrah Resources (ASX: SYR) has outlined an initial exploration target of 700 to 900 million tonnes for its Balama Graphite and Vanadium Project in Mozambique.

Balama East has an individual target of 300 to 400 million tonnes at 11% total graphitic carbon and 0.3% vanadium, while Balama West has a target of 400 to 500 million tonnes at 10% total graphitic carbon and 0.2% vanadium.

Importantly, Syrah is on the cusp of delivering a maiden resource for the project that is increasingly looking like an exceptional deposit by global standards, with an initial resource for Balama West on track for delivery late in the December quarter.

The exploration targets are based on 23 drill holes and 11 trenches. Within these zones are multiple high to very high grade zones estimated at tens of millions of tonnes averaging between 15% to over 20% total graphitic carbon.

Extensive zones of coarse flake graphite have been observed in every hole drilled to date, which is extremely promising as coarse flake graphite generally attracts higher sales prices.

The Balama West and Balama East deposits remain open in all directions, with the majority of the project still yet to be drilled along the 7 kilometre strike length.

A Scoping Study is looking at a 100 year mine life.

High vanadium potential

The Balama Project has vanadium bearing graphitic schists outcropping for the entire 7 kilometre strike distance.

Very wide zones, up to 175 metres, of high grade vanadium, from 0.48% to 0.68%, have also been recorded which is comparable in tenor to the largest operating vanadium deposit in the world - Xstrata's Rhovan operation.

Rhovan in South Africa has a Measured and Inferred resource of 72.29 million tonnes at 0.52% vanadium.

Balama East has several zones which are comparable in grade, as evidenced by intersections of 118 metres at 0.49% vanadium from 90 metres, 175 metres at 0.48% vanadium from 50.45 metres, 21.6 metres at 0.68% vanadium from 266.7 metres, and 109 metres at 0.5% vanadium from 100 metres.

Balama East drilling

First assays have also been received from the initial Balama East drilling program for eight of the total of 25 holes drilled to date.

Best entire drill hole intersections include 218.4 metres at 12.3% total graphitic carbon and 0.39% vanadium from surface, 290.4 metres at 13.8% total graphitic carbon and 0.41% vanadium from surface, and 302.6 metres at 13.7% total graphitic carbon and 0.38% vanadium from surface.

All holes intercepted graphite and vanadium mineralisation from surface to end of hole except for a few which ended in granite.

A Balama East cross section shows that high grade zones outcrop at surface in Trench 8, which recorded a zone of 180 metres at 17.8% total graphitic carbon and 0.25% vanadium.

Further results for Balama East are expected to be reported over the coming weeks.

Current and future drilling will focus on closing off existing very high grade areas, 15% to 20% total graphitic carbon, such as at the Hill and North Zones at Balama West and to identify possibly higher grade areas along the 7 kilometre strike extent of Balama.

Also, geotechnical drilling will be required for the initial pit design.

Balama East - Sushi Zone

At the south-west margin of the granite intrusion (Mount Coronge) at Balama East, a zone of exceptionally coarse flake graphite has been identified.

This has been named the "Sushi Zone" and has flake sizes up to 6 millimetres in diameter.

The Sushi Zone outcrops at surface and is exposed in Trench T13.

The zone was intercepted in one hole at surface with an intercept of 18.7 metres at 14.6% total graphitic carbon and 0.365% vanadium from surface.

Balama East is visually coarser grained than Balama West.

Value drivers - Syrah's Balama Project

- Potential to be a globally significant large flake high grade natural graphite deposit
- Over 7km strike distance and up to 2km of surface width of outcropping graphite and vanadium
- High grade zone recently extended with additional drilling, grades reported are among the highest recorded globally
- Metallurgy in preliminary test work indicates concentrate grades in excess of 97% C achievable
- Close to infrastructure and good main road access
- High purity natural graphite price has increased from ~US$750/tonne in 2004 to current prices of ~US$1,800+/tonne
- Strong demand drivers including emerging green and energy technologies
- China supplies ~67% of global flake graphite but supply is likely to become constrained as it imposes export restrictions,
environmental standards, and deposits become increasingly difficult to mine
- US and European Commission have both declared graphite a critical material


At every turn Syrah is proving that it has an exceptional deposit on its hands with its Balama Graphite and Vanadium Project.

Investors will no doubt be eagerly awaiting the maiden resource for Balama West given today's news of an up to 900 million tonne exploration target.

Even in the early stages Balama is delivering strong evidence of a potential premium product through the existence of coarse flake graphite, and metallurgical testwork producing an upgraded graphitic carbon concentrate of 97%.

The Balama deposit has the potential to produce enough graphite to meet any projected shortage in global flake graphite supply going forward.

The very high graphite grades are believed to be among the highest recorded globally.

The project is also proving it is of a calibre similar to Xstrata's Rhovan operation in South Africa - the largest operating vanadium deposit in the world with a Measured and Inferred resource of 72.29 million tonnes at 0.52% vanadium.

Balama East has several zones which are comparable in grade to Rhovan.

Syrah is also well funded with $15,340,110.36 from a capital raising in September. With this the EV and market cap, begins to look light relative to insitu value and catalysts for re-rating.

Syrah's current share price of $2.48 looks likely to be on the "light" side for a deposit of this rank and potential quality and scale.

On current trends, Syrah looks to Proactive Investors to be a $3.00-$3.50 stock.

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