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Syrah Resources Wins Market Approval, Shares Spike 400% In Under Two Months

Syrah Resources (ASX: SYR) has clearly been favoured by investors in the past two months on the back of a successful expansion of its graphite portfolio in southeast Africa and initial metallurgical results showing saleable grades of graphite from the Balama Project.

The company's shares have risen to a high of A$0.85 on 29 February 2012, up from $0.17 on 11 January 2012, representing a massive 400% increase in just over a month and a half.

While shares have settled back to trade at around $0.74, that is still around a 335% spike.

Syrah has been busy building its graphite portfolio in Africa and adding assets that complement its Balama Project in northern Mozambique.

The company recently expanded its footprint and potential graphite Resource base in the region with the acquisition of the Nachingwea Graphite Project in south Tanzania.

Indicating the highly prolific nature of Nachingwea is the geological similarities to Balama, a project that is showing early potential to become one of the largest graphite deposits in the world, and reported high grades of up to 60% graphite.

Meanwhile, Balama has already differentiated itself from graphite deposits in Canada, Europe and Australia through its large tonnage potential, high grade and coarse flake size, which is being revealed through exploration and metallurgical work.

Recent initial metallurgical testwork results for the project have demonstrated grades in excess of 95%C at recoveries up to 87%.

Importantly, the grade has the potential to be further enhanced into a very high grade product in excess of 97%C.

The preliminary metallurgical results are encouraging as the bulk sample collected was partially weathered and not specifically targeted within the known high grade areas.