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Syrah Resources Grows Infrastructure Options For The Balama Graphite Project In Mozambique

Syrah Resources (ASX: SYR) has taken significant infrastructure strides to fast track development of its 1 billion tonne graphite and vanadium project in Mozambique.

The Balama project contains 117 million tonnes of contained graphite - which exceeds the rest of the world's reserves of graphite and has an inferred resource of 1.15 billion tonnes at 10.2% Total Graphitic Carbon (NYSEMKT:TGC) and 0.23% vanadium.

The Balama Graphite and Vanadium Project is situated on a 106km2 granted prospecting licence located within the Cabo Delgado province in the district of Namuno in northern Mozambique.

Road

Balama is situated about 240 kilometres west of the Port Town of Pemba. This distance can currently be travelled in approximately 3 hours by motor vehicle.

The road from MontePuez to Balama township will be sealed this calendar year. This will mean the entire distance from the Port of Pemba to Balama can be travelled on tarred road in less than 3 hours.

Water

Chipembe Dam is located approximately 10 kilometres from the proposed site of the Balama processing plant. The Mozambique Water Authority responsible for the management of Chipembe Dam has confirmed that there is suitable available capacity and allocation for Syrah to obtain over 1,000,000m3 annually.

The Mozambique Water Authority has offered water rights from Chipembe Dam to Syrah located just 10 kilomtres from the proposed site of the Balama processing plant.

Syrah said it is confident there is additional capacity over and above this amount to accommodate future plant expansion.

Power

Power lines are currently being installed between Balama town and Monte Puez, thus connecting the region to the National Grid. The Mozambique Electricity Authority has offered to connect the Balama Project to the National Grid.

The Mozambique Electricity Authority has confirmed that Balama is to be connected to the National Grid this year providing competitive power at less than 5 cents per kilowatt hour. Construction is underway

About 86% of Mozambique's power is generated from hydroelectricity and thus is very cost competitive.

Port

Balama is planning to use the Pemba Port for shipments. Pemba is a deep-water container port, and the third largest port in Mozambique. The road from Balama goes directly to the Port of Pemba.

The distance can be travelled in 3 hours by motor vehicle currently and less once the road from MontePuez to Balama is completed later this year.

Syrah said it will work closely with the Government of Mozambique together with the Pemba Port Authority to ensure the long term partnership development of shipping via Pemba.

Ports of Africa have undertaken a transport and logistics study on behalf of Syrah and have confirmed that transport of graphite product to the Port of Pemba is a compelling option.

China trip

Recently Syrah representatives visited China and met with the largest buyer of V2O5 in that country. They were informed that vanadium mines in China process amorphous graphite to extract vanadium from roscoelite at a head grade as low as 0.10% V2O5.

Vanadium

Often lost given the size of the graphite deposit, Balama is also one of the larger undeveloped vanadium deposits globally with contained vanadium in resources of 2.6 million tonnes, which is six times the size of Rhovan, the world's largest operating vanadium deposit.

Analysis

Today's infrastructure update provides strong momentum for Syrah in its goal to fast track development of Balama. As well as entrench Balama with the potential to be one of the lowest cost graphite producers globally.

Drilling is set to expand and upgrade the high grade resources at the Ativa, Mualia and Mepiche zones to the Indicated category and commenced in early May.

There is around 5,000 metres of diamond drilling required to complete this programme, which has the potential to upgrade the resource classification of the high grade zones to the Indicated level for inclusion in the anticipated Balama Feasibility Study.

The Scoping Study for Balama West is due in June 2013, with positive results having the potential to re-rate the share price from the current $2.00.

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