PROJECT UPDATE: Syrah Claims Mozambique Graphite-Vanadium Project is World’s Largest

Australia’s Syrah Resources (ASX:SYR), which holds a diversified exploration portfolio in Southeast Africa and is focused on moving its Mozambique-based Balama graphite-vanadium project forward, on Monday took a step toward that goal with the release of the maiden inferred mineral resource for Balama East.

The global inferred resource for Balama East is 579 million tonnes grading 10.6-percent TGC and 0.26 percent V2O5 at a cut off of 5-percent TGC. That places the total inferred resource for the project — which includes Balama East and Balama West — at 1.15 billion tonnes grading 10.2-percent TGC and 0.23-percent V2O5 containing 117 million tonnes of graphite and 2.7 million tonnes of V2O5.

The company’s press release states that the project “now contains, by far, the largest known graphite resource in the world,” while “the contained vanadium resource is approximately six times the size of [Glencore Xstrata’s (LSE:GLEN)] Rhovan, the world’s largest operating vanadium deposit.”

Despite the good news, The Australian reported yesterday that the response to Syrah’s announcement has been “subdued,” with shares of the company closing only $0.02 higher, at $0.77, following the release. Analysts believe that the lack of excitement is the result of the project’s scale being anticipated by the market and “a preference among investors to wait for feasibility studies.”

Underscoring that point is the fact that Syrah’s share price jumped from $0.20 last year to as high as $3.49 in the earlier months of 2013 on the back of the project’s early potential, according to The Australian. It has since been brought back down by the sell-off in mid-April.

Syrah’s goal is for Balama to be the world’s largest and lowest-cost producer of graphite. Prior to the release of a feasibility study, the company expects to put out scoping study results for West Balama in June.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article. 

Editorial Disclosure: Syrah Resources is a client of the Investing News Network. This article is not paid-for content.

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