While Copper Strike reaffirmed the projects have significantly more potential than originally envisaged when the term sheet was signed, the rapid increase in the company's share price over the past week has made the deal prohibitively expensive.
The consideration for the sale was 115.7 million shares in Copper Strike, which would cost around A$19.7 million at today's share price of around $0.17 compared to the roughly $13.9 million it would've cost at the time the deal was announced.
Copper Strike's due diligence field visit, however, has demonstrated the high exploration potential of the projects.
The company found that the Tongani-Tajiri heavy mineral sands project likely has a continuous strike distance of over 60 kilometres with a width of 5 kilometres in certain areas.
This trend comprises zones of 1-3% heavy minerals and several higher grade zones of greater than 3% heavy minerals.
Although generally dominated by ilmenite, certain areas appear to have rutile content up to 20% and zircon content above 10%.
Meanwhile, the Fungoni Prospect comprises two 20 kilometre long, arcuate belts of above 1% heavy minerals.
A high grade zone at the project, where earlier drilling intersected several 4 metre intersections ranging from 23.1% to 27.8% heavy minerals, is open in all directions, particularly at depth because earlier auger drilling stopped at the water table.
Representative assemblage of heavy minerals is exceptional with 25% zircon, 5% rutile and 44% ilmenite.
While Syrah's key focus continues to be its Balama Graphite Project in Mozambique, where it recently intersected around 288 metres of graphite, the company plans to follow up on the mineral sands projects' high prospectivity.
Importantly, these areas have drill ready targets and the potential to define high grade resources with favourable assemblage characteristics quickly and at low cost.
Syrah said it is committed to drilling out a Resource at Balama but will also look to build shareholder value by exploring the mineral sands projects.
The next stage of exploration will involve a high precision, low altitude magnetic survey and aircore drilling. Syrah is currently in discussions with drilling companies to secure a drill rig.
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