Syrah Resources (ASX: SYR) has received strong investor support to raise A$6 million to fund drilling at its wholly owned Balama Graphite Project in Mozambique.
The company received firm commitments for the placement of 10 million shares at $0.60 each to institutional and sophisticated investors.
Preliminary metallurgical testwork results for Balama have shown grades in excess of 95%C at recoveries of up to 87% of contained carbon.
Importantly, the grade has the potential to be further enhanced into a very high grade product in excess of 97%C.
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.
Also demonstrating the quality of the graphite at the project is the medium to coarse flake graphite achieved.
The flotation concentrate produced from the preliminary test contained graphite flakes up to 568 microns with an average size of 159 microns (medium to coarse flake graphite).
The highest carbon grade is achieved above 177 microns which augurs well for producing a medium to coarse flake product.
At Balama, outcropping graphite mineralisation has now been identified over a 7 kilometre strike length, with high grade zones of about 20% identified.
Further upside to the project is the associated highly anomalous vanadium geochemistry, which is widespread and provides the potential for vanadium credits.
A diamond drill rig and reverse circulation rig have been secured, with drilling set to begin this month.
Syrah is planning a program of at least 5,000 metres of diamond drilling and 10,000 metres of reverse circulation drilling.
The company is targeting the release of a maiden JORC Resource in the March quarter of 2013.
The Balama Graphite Project is a 106 square kilometre granted prospecting licence located within in the Cabo Delgado province in the District of Namuno of northern Mozambique.
The project is about 240 kilometres by road west of the port town of Pemba.
Pemba Port is a deepwater container port and is the third largest port in Mozambique.
It is anticipated that that the Balama graphite concentrate will be transported and shipped from Pemba Port.
The project is located close to a water supply, with the Chipembe dam just 14 kilometres to the northeast.