Syrah Resources upgrades graphite resource at Balama West
Syrah Resources (ASX: SYR)
has updated Indicated and Inferred Resources at the Ativa Zone in the
Balama West Project, Mozambique, to 51 million tonnes at 19.9% total
graphitic carbon and 0.38% V2O5 at a 13% TGC cut-off.
Using a higher 20% cut off, Ativa’s Resource stands at 30Mt at 21.8% TGC.
To
put this in context, while this is just a small part of the billion
plus Inferred Resource for the overall Balama West Project, Ativa has as
tonnage that far exceeds that of Mason Graphite's (CVE:LLG) Lac Guéret and Focus Graphite’s (FRA: FKC, OTCMKTS: FCSMF) Lac Knife deposits in Canada combined and at a higher grade than both.
Lac
Guéret has a Measured and Indicated Resource of 7.6Mt at 20.4% TGC
while Lac Knife has a Measured and Indicated Resource of 8Mt at 16% TGC.
These are reported to be the world’s highest grade graphite deposits
based on claims by their owners.
The latest Resource at Ativa is
more than double the previous Inferred Resource of 21Mt at 20.8% TGC and
0.38% V2O5 and comprises an Indicated Resource of 13.5Mt at 19.8% TGC
and 0.4%V2O5 and an Inferred Resource of 12Mt at 19.9%TGC and 0.4% V2O5.
In
addition, anticipated mining costs are anticipated to be very low for
the initial years of mining as the graphitic rocks in the oxidation
zone, which extends to about 60 metres, is very friable, allowing the
graphite flakes to be liberated with very little energy required.
Details
From
0 to 50 metres, the Indicated Resource currently stands at 5.5Mt at
20.2% TGC and 0.38% V2O5 for 1.1 million tonnes of contained graphite
and 21,000 tonnes of contained vanadium.
From 0 to 100 metres,
the Indicated Resource is 12Mt at 19.9% TGC and 0.40% V2O5 for 2.4
million tonnes of contained graphite and 48,000 tonnes of contained
vanadium. The contained graphite is considered sufficient to sustain an
envisaged Ativa pit life of well over 10 years.
The Inferred
Resource is considered to be readily upgradable to the higher confidence
Indicated category given that the company has drilled only a limited
number of holes greater than 100 metres in depth as its recent infill
drilling program was focused on proving up an Indicated Resource at
shallow depth.
Accordingly, most of the resource below 100 metres is still in the Inferred Resource category.
Balama
Syrah has completed infill drilling at
Balama East to upgrade the resource at the Mepiche Zone – currently
145Mt at 15.1% TGC and 0.43% V2O5 and to define the Sushi Zone. Initial
assays are expected soon.
It has also moved the diamond drill rig
back to Balama West to conduct infill drilling at the Mualia Zone,
which currently hosts an Inferred Resource of 136Mt at 16.6% TGC and
0.43% V2O5.
These programs are likely to add further to the resource at the project.
Test
work carried out last month has demonstrated that a concentrate grading
over 96% could be produced using simple flotation, which could result
in substantially lower processing costs.
This follows
metallurgical testwork in September 2013 which showed that the magnetic
vanadium bearing minerals can be concentrated to about 5% V2O5 by simple
processing of the tailings from the graphite extraction process.
Vanadium production could increase cash flow at minimal additional cost.
Metallurgical testing has commenced on converting Balama graphite to spherical graphite used in lithium ion batteries.
The
company also expects to receive its Mining Licence in the current
quarter, noting that the application is progressing well through the
Mozambique regulatory review process.
Analysis
Syrah’s
Balama West Project continues to excite with the latest Resource update
highlighting that just one small part of it, the Ativa Zone, is
competitive with and in fact exceeds two world class graphite deposits
in both tonnage and grade combined.
Shares in the company should
trade higher on the news and there remains considerable upside in the
price in the near future with a Feasibility Study based on the new
resource expected to be delivered soon in the current quarter.
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