Name of the Project
Balama graphite project.

Location
Mozambique.

Client
Syrah Resources.

Project Description
A feasibility study has confirmed Balama as a project with low capital intensity and technical risk, but attractive returns. As part of the study, a maiden proved and probable graphite ore reserve has also been declared. This ore reserve has since been increased to comprise 114.5-million tonnes at 16.6% total graphitic carbon (TGC) for 19-million tonnes of graphite.

Balama will be a high-grade, openpit operation using conventional mining methods with an extremely low stripping ratio. Operations will start with free-dig mining within the high-grade pits of Balama West using conventional truck-and-shovel mining. Operations will shift to the pits in Balama East thereafter.

The processing plant will have a feed rate of two-million tonnes a year using conventional processes, including crushing and screening, grinding, flotation, filtration and drying, as well as classification, screening and bagging.

Graphite concentrate will be transported using a sealed highway south-east of the project and shipped at the Port of Nacala, about 490 km away.
The mine is expected to produce an average of 365 000 t/y of graphite concentrate during its first ten years of production. The mine’s production will be sold to traditional industrial graphite markets and emerging technology markets.

Syrah also intends to pursue its downstream strategy, which involves further processing of flake graphite from Balama into spherical graphite at a plant in Louisiana, in the US. Spherical graphite is a high-margin, value-added product that is currently in significant demand, owing to its use in lithium-ion batteries for electric vehicle and energy-storage applications.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
Based on the assumptions used in the feasibility study dated May 2015, the Balama project has a post-tax net present value, at a 10% discount rate, of $1.1-billion and an internal rate of return of 71%, with a payback period of less than two years from commercial production.

Value
By the end of June 30 this year, Syrah had spent an estimated $162.3-million on the project, with a further $23.7-million committed at the end of the quarter, bringing total current capital expenditure to $186-million.

Duration
First production has been delayed to October 2017.

Latest Developments
Syrah Resources has produced its first saleable flake graphite from the Balama project and is now targeting production of 160 000 t to 180 000 t in 2018.

The first bagged saleable flake graphite production was produced within an expected grade range of more than 95% fixed carbon and follows the intermediate concentrate produced in late October.

The first shipment of flake product is set to depart the Nacala port in the “coming weeks”, with first cash receipts expected in early 2018, MD and CEO Shaun Verner has said.

Syrah has essentially completed all construction work at the $205-million project and has progressed into operations.  Remaining commissioning activities will focus on the fines circuit and further optimisation works.

The Balama operation is expected to produce an average of 365 000 t/y of graphite concentrate during its first ten years of production, to deliver free cash flow of $160-million a year. The mine’s production will be sold to traditional industrial graphite markets and emerging technology markets.

Syrah is developing a downstream battery anode material plant in Louisiana.

On Budget and on Time?
Syrah Resources has warned of more cost increases at the Balama project, along with delays in the commissioning timeline.

Key Contracts and Suppliers
CPC Engineering (detailed engineering and design).

Contact Details for Project Information
Syrah Resources, GM – investor relations John Knowles, tel +61 419 893 491 or email ljknowles@optusnet.com.au.