Syrah Resources (ASX: SYR) has delivered an impressive initial resource for its Balama Graphite-Vanadium Project in Mozambique demonstrating the sheer massive size of the deposit that still has the potential to grow significantly.
The Resource well and truly exceeded the exploration target of 400 to 500 million tonnes at 10% total graphitic carbon (NYSEMKT:TGC) previously outlined for Balama West.
The global Inferred Resource for Balama West is 564 million tonnes at 9.8% TGC and 0.21% V205 at a 5% TGC cut off.
The contained graphite of the Balama deposit is expected to exceed the rest of the world's reserves of graphite as recorded by the USGS (77 million tonnes as at 2012).
Syrah expects Balama to be one of the lowest cost producers of graphite in the world, including China.
Given that the independently prepared resource exceeded the exploration target for Balama West, the company is also confident of exceeding the exploration target for Balama East.
World class graphite resource
Also impressive is the size and grade of the two combined high grade portions of the deposit - the Ativa and Mualia Zones.
The Resource comprises two very high grade zones surrounded by an extensive zone of medium grade graphite.
The Inferred Resources commence from outcrop down to a depth of 300 metres below surface.
The combined high grade zones are 157 million tonnes at 17.1% total graphitic carbon (TGC) and 0.43% V205 at a 5% TGC cut off.
The Ativa Zone (formerly North Zone) has an Inferred JORC Resource of 21 million tonnes at 20.8% TGC and 0.38% V2O5 at a 13% TGC cut off, and is among the highest grade deposits recorded for flake graphite globally.
The Mualia Zone (formerly Hill Zone) has a JORC Resource of 136 million tonnes at 16.6% TGC and 0.43% V2O5 at a 5% TGC cut off.
This zone in isolation is one of the world's largest graphite deposits. It is also one of the highest grade graphite deposits recorded globally.
These two zones are separated by only 200 metres lateral distance, and there is potential to increase these tonnages significantly.
There has been limited drilling at the northern margin of the Ativa Zone and the zone remains open in all directions and at depth.
Based on these high grade zones alone, Balama West is one of the world's largest deposits of graphite and vanadium.
At a grade of about 17% it is also one of the highest grade flake graphite deposits in the world.
Balama West has a significant vanadium resource on a global scale.
The vanadium resource exceeds that of the world's largest operating vanadium deposit - Xstrata Alloys Rhovan in South Africa.
Rhovan has a combined Measured and Indicated Resource of 72.29 million tonnes at 0.52% V2O5 for 376,000 tonnes of contained vanadium.
Balama's contained vanadium resource is around three times the size of Rhovan.
The 2013 drill program is slated to begin in March/April 2013, following the current wet season.
The program will extend and close-off the high grade Ativa and Mualia zones.
Around 5,000 metres of diamond drilling will be required to complete this program.
An Inferred Resource from Balama East is planned to be released in the June quarter this year.
Meanwhile, the Scoping Study is also progressing to plan and is also expected to be released during the June quarter this year.
This, combined with the resource, metallurgy and marketing studies will provide the foundation for feasibility study deliverables.
Balama is an extraordinary deposit on any measure.
Not only is it world's largest graphite deposit, but it is among the highest grade deposits recorded for flake graphite globally, and contains a vanadium resource that far exceeds the world's largest operating vanadium deposit.
In November 2012, Proactive opined: "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."
Syrah's shares are now at around $3.14 and, given the potential still to significantly grow the resource even further - particularly with a Balama East resource still to come, this is still early days for the company.
The Balama deposit outcrops over a distance of 7 kilometres, with graphitic schists outcropping over the entire distance.
None of the high grade domains are closed off and Syrah expects these to continue to expand in size.
Based on the size of the deposit and the product mix achieved from metallurgical testwork, Balama could meet demand requirements across all natural graphite flake ranges (jumbo to amorphous) for several generations.
The deposit will also be one of the lowest cost producers of graphite in the world, including China.
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