Syrah Pleased with Feasibility Study for Balama Graphite Project

This past Friday, Syrah Resources Ltd. (ASX:SYR) released a feasibility study for its Balama graphite project in Mozambique, noting that it confirms that the project has “low capital intensity, low technical risk and attractive returns.”

Highlights include:

• Initial capital expenditure of US$138 million, with a payback period of less than 2 years from commercial production
• Nameplate capacity of 380,000 tonnes of concentrate per annum at 95% total graphitic content
• Maiden JORC Compliant Ore Reserves sufficient to support operations for over 40 years, with an average head grade of approximately 19% TGC during the first 10 years
• Internal rate of return of 71%, post-tax NPV10 of US$1.1 billion
• Average unlevered project free cash flow of approximately US$160 million per annum during the first 10 years at full production
• Open pit operation with low stripping ratios
• Average cash operating costs of US$286 per tonne free on board from the Port of Nacala over life of mine
• Balama Graphite Project scheduled to commence ramp up of production 18 months after completion of financing
• Front End Engineering Design has commenced to further optimise and de-risk the development plan as well as bringing greater certainty to the timing of procurement for key capital equipment
• Financing discussions are well advanced

Talga Kumova, Syrah’s managing director, commented:

We are absolutely delighted with the results of this Feasibility Study, which confirms our long held view that Balama will shortly become the world’s premier graphite mine. Metallurgical testing has also confirmed that Balama graphite will become a leading source of high quality spherical graphite for Li-ion battery applications. On behalf of the Board of Syrah, I’d like to take this opportunity to thank our shareholders for their support as well as the employees and consultants who have allowed our company progress to this exciting stage of its development.

Click here to read the full Syrah Resources Ltd. (ASX:SYR) press release.