Syrah Resources: Upgraded graphite resource for Balama within weeks
Syrah Resources (ASX: SYR)
latest infill drilling results from Balama East in Mozambique have once
again demonstrated exceptional high grade graphite of above 20% total
graphitic carbon (TGC).
Drilling has also intersected vanadium at the Ativa Zone at Balama West, with the diamond drilling highlights including:
- BMDD0073: 36.4 metres at 20.1% TGC and 0.34% V2O5 from 2.8 metres;
-
BMDD0078: 20 metres at 25.6% TGC and 0.22% V2O5 from 9 metres, and 37.8
metres at 20.9% TGC, and 0.39% V2O5 from 35.2 metres; and
- BMDD0079: 19 metres at 28.1% TGC and 0.23% V2O5 from 20.0 metres.
These
results follow on from other recent infill results including: 67 metres
at 20.6% graphitic carbon content and 0.36% vanadium from 94 metres.
The
latest results are all close to true width intersections, confirming
the quality of the Balama deposit with continued intersections of very
high grade graphite and vanadium mineralisation in the Ativa Zone -
which remains open along strike to the east and the west.
A
resource upgrade is expected within three weeks, which is expected to
deliver a confidence category upgrade to Indicated at the Ativa West
portion of the Ativa Zone.
Higher grade intersections
Syrah
said that the higher grade intersections are mainly within the XGS1
unit, which is high grade and medium to coarse flake graphite with
ferro-vanadium mineralisation.
The XGS2 unit is characterised by
moderate to high grade and medium to coarse flake graphite with
ferro-vanadium and vanadium bearing micaceous minerals.
Why Balama is world-class
Snowden’s
used a 13% TGC cut-off grade for mine plan purposes, while Syrah has
delivered intercepts at a 10% cut-off and at a 20% cut-off.
This
illustrates why Balama is the world’s preeminent graphite deposit with
impressive widths of graphite being reported even at a 20% cut-off.
The Canadian based Lac Guéret and Lac Knife deposits are said to be the world’s highest grade flake graphite deposits.
The
Lac Guéret deposit has a measured and indicated resource of 7.6 million
tonnes at 20.4% TGC. The Lac Knife deposit has a measured and indicated
resource of 8 million tonnes at 16.0% TGC.
Syrah expects the
Ativa Zone, which is a small part of the Balama deposit, to be superior
to these deposits in terms of tonnes, grade and mineability.
Syrah
considers graphite below 10% to be low grade and less economic,
although most graphite explorers continue to claim that such material is
high grade.
Analysis
The next price
catalyst for Syrah is the upgraded resource due in around three weeks,
and considering the impressive grade of the infill drilling, is expected
to upgrade the confidence category to Indicated at the Ativa Zone area.
Following
the upgrade, the next share price driver will be the Feasibility Study
to be delivered based on the new resource and other additional data
received over the past few months.
This is expected in around six weeks.
Syrah passes Proactive Investors target
In
August this year Proactive Investors continued to highlight the
potential of Syrah, and at the time when the share price was $2.03, we
said:
"We believe there is considerable scope for the company’s share price to appreciate to the $2.40-$2.50 range."
Syrah has punched through this target and now trades above $3, more than 50% higher than when the target was applied.
