Name of the Project
Balama graphite project.

Location
Mozambique.

Project Owner/s
Syrah Resources.

Project Description
A feasibility study has confirmed Balama as a project with low capital intensity and technical risk, but attractive returns. The project is one of the highest-grade, large-flake deposits globally after its recent upgrade to 51.1-million tonnes at 9.3% total graphitic carbon (TGC), including 38.7-million tonnes in the indicated category at 9.3% TGC and 12.4-million tonnes in the inferred category at 9.1% TGC.

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 the start of commercial production.

Capital Expenditure
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.

Planned Start/End Date
Not stated.

Latest Developments
Syrah Resources has suspended production at the Balama project as local restrictions to halt the spread of Covid-19 take its toll.

Syrah has said that the Mozambique government has enacted additional measures, including the suspension of all in-bound travel visa operations and a compulsory 14-day self-quarantine for all international arrivals.

Restrictions and mandatory quarantine measures for domestic travel are also being implemented.

Syrah has said that the combination of these restrictions on international and domestic travel limits the mobility of a significant portion of the Balama workforce, prompting a decision to suspend production at Balama from March 28.

The company has said that sales orders from existing finished product inventory will continue to be dispatched, with finished product from Balama to be dispatched through the Port of Nacala, although this could change.

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.