Syrah Resources’ (ASX: SYR) infill drilling at its Balama East graphite project in Mozambique has returned thick high grade assays from the Mepiche zone including 122.2 metres at 16.7% total graphitic carbon and 0.38% V2O5.
An upgraded resource calculation for Balama East is underway with MSA Group.
Other notable intersections include:
- 119.5 metres at 16.3% TGC and 0.34% V2O5;
- 120.17m at 15.4%TGC and 0.37%V2O5; and
- 100.21m at 17.2%TGC and 0.53% V2O5.
Importantly, these intersections are generally from surface to end of hole with all holes ending in mineralisation.
The now completed infill drilling campaign at Balama East is expected to upgrade current Inferred Resources to the Indicated or Measured categories.
Balama East has a global Inferred Resource of 1.15 billion tonnes at 10.2T TGC and 0.23% V2O5. It remains open to the northeast, southwest and at depth.
Mepiche Zone
The Mepiche Zone has an Inferred Resource of 145 million tonnes at 15.1%TGC and 0.43%V2O5.
It shows exceptional grade and thickness and represents a very high grade deposit that has essentially no strip ratio as the mineralisation outcrops.
Further work planned includes geotechnical drilling.
Testwork
Recent testwork on bulk samples collected from Balama East had produced a high grade 96.6% graphite concentrate through simple processing.
The recovery of the concentrate, 25% of which was abundant coarse to very coarse material, was achieved by crushing to 2mm followed by four stages of floatation.
In separate tests, a potential customer achieved a 99.3% grade using simple flotation processes
Metallurgical tests have also shown that Balama graphite can be easily upgraded to 99.9% total graphitic content using chemical wash operating at low temperatures.
Balama graphite has also been shown to be expandable based on customer testwork and hence can be sold into the expandable graphite market, which is about 40,000 tonnes per annum.
It has been micronized down to 1 micron size and can be sold in the micronized graphite market.
Balama Graphite Project
Syrah was in December granted a 25 year Mining Licence for the project and expects to start construction after the wet season ends in April 2014.
It recently defined a Measured Resource of 11.6 million tonnes grading 19.9%TGC and 0.4% V2O5 at the Ativa Zone of Balama West that is defined to be sufficient for 11 to 12 years of production.
The company has indicated that Balama could become a mine well before the first hole was drilled given the extremely high grades of graphite and excellent grades of vanadium.
Balama East has favourable infrastructure including road links to Pemba Port about 240 kilometres away and power lines being connected to Balama town with the government indicating that it is willing to extend this supply to the Project.
Analysis
The latest assay results including 122.2 metres at 16.7% total graphitic carbon and 0.38% V2O5 highlight the attractiveness of the Mepiche Zone within Syrah Resources’ Balama East Project.
This also completes an infill drilling campaign that is expected to upgrade Resources at the project to the higher confidence Indicated or Measured categories. The revised calculation is underway with MSA Group.
All this could lend further support to the company’s discussions with potential debt financiers and off-take partners, which are expected to result in an outcome expected in the first quarter of 2014.
The company said it expects to secure debt financing the remaining amount required to develop the project, and is confident that the project can be developed for under US$100 million.
Syrah is also in a position to begin construction of Balama as soon as the wet season ends in about April 2014.
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