Name and Location
Balama graphite project, Mozambique.

Client
Syrah Resources.

Project Description
A feasibility study has confirmed the 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 been declared, comprising 81-million tonnes at 16.2% total graphitic carbon (TGC) for 13.2-million tonnes of contained graphite. This ore reserve provides sufficient inventory to support operations for more than 40 years after project ramp-up.

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 to and shipped at the Port of Nacala, about 490 km away, using a sealed highway south-east of the project.

The feasibility study has not considered the vanadium potential of Balama. A scoping study on the potential recovery and production of vanadium has been completed.

Syrah intends to conduct further vanadium technical studies during the construction and commissioning phase of the Balama project, with full feasibility studies to start after the successful commissioning of graphite production. High-purity vanadium samples produced from the Balama pilot plant testwork have been sent to several major Vanadium redox flow battery producers.

Net Present Value/Internal Rate of Return
The 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
The project is expected to have an initial capital expenditure of $138-million.

Duration
The project development phase will start once financing is complete.

Latest Developments
Graphite developer Syrah Resources announced a A$211-million capital raise on August 10 to fund the development of its Balama project.

The company will raise the funds through an institutional placement and pro rata renounceable entitlement offer, which have both been fully underwritten.

The placement will be priced at A$3.25 a share to raise about A$98-million, with the shares issued under the placement representing a 13% share in Syrah on completion of the capital raise.

Under the entitlement offer, Syrah shareholders will be able to subscribe for four new shares for every 19 shares held, with the offer also priced at A$3.25 a share.

The entitlement offer is expected to raise A$113-million and will comprise an accelerated institutional component and a retail component.

The offer price represents an 11.7% discount to the last closing price of Syrah shares.

Key Contracts and Suppliers
CPC Engineering (Feed).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Syrah Resources, MD Tolga Kumova, tel +61 3 9670 7264 or email t.kumova@syrahresources.com.au.
CPC Engineering, tel +61 8 9365 0300, fax +61 8 9365 0333 or email CPCprojects@cpceng.com.au.