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SYR - SYRAH RESOURCES LIMITED


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flower,

 

One of the major shareholders who put the Jacana acquisition together has 15M SYR shares at circa 8c and he is not interested in selling even 1 share.

I have $100K in this and if the price went to $1.50 in the next month I would sell ZERO shares. I topped up today and will be buying a lot more next week. Very comfortable buying it at circa $1.00.

 

I'll allocate about $20K's worth to trade once it passes the $250M market cap level.

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flower: "arty, are you seriously telling me that say you had put $10k into SYR early January 2012 at 20c, given todays price is $1 it at the very least it is not just a prudent move to take some of that profit off the table?"

 

If arty had done that he would only be sitting on a $40K profit. Hardly Moet time. My life changing results since I started in markets in the late 70's were from ten baggers and better that I held for the duration.

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Having said all that, if drill results are not what the market expects, then the price will pullback substantially. I'm not in these types of stocks for 50% profit. They don't come along all that often so when they do, you have to make them pay.
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"if drill results are not what the market expects, then the price will pullback substantially"

 

Do I expect average drill results? No. That's why I am still buying. From the announcements of the trench samples and the diagrams, it's very clear to me that the high grade horizons dip into the hill. The outcrop is between 100m and 250m. We'll know more when the drill bit is put through the guts of that hill.

 

Paul Kehoe is optimistic that this resource will be the largest flake graphite resource on the planet. Currently the Chinese owned Jixi Liumao depsoit is the largest at 360M tonnes grading 15%. If Kehoe is correct, then we are looking at a resource with contained graphite of in excess of 54M tonnes. Premium graphite currently sells for ~$3,000/t. In situ valuation would be conservatively $100/t. probably closer to $200 but if we use $100, 54M tonnes @ $100 = $5.4Bn dollars. Street value $160Bn..... in ground undeveloped value $5.4Bn.

 

Do the sums yourselves and that will tell you why I think this is just the beginning even though we are at $1 already.

 

The Balama project is only 45km from the township of Balama and then a 200km sealed road drive to the deep water port. They will have extremely low costs in getting the concentrate onto ships in the Kemba port.

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Sorry for the spelling error of the port and also my geography was slighly out.

 

From the SYR announcement:

 

"The Balama Graphite Project is a 106 km2 granted prospecting licence located within in the Cabo Delgado province in the District of Namuno of northern Mozambique (Figure 3). The project is approximately 265 km by road (3.5 hours drive) west of the port town of Pemba. Pemba Port is a deepwater container port and is the third largest port in Mozambique (Figure 4). It is anticipated that the Balama graphite concentrate will be transported and shipped from Pemba Port."

"Balama is accessed by an excellent sealed road from Pemba to Montepuez (Figure 5), a regional township, and then via 45km of unsealed road which is in the process of being upgraded by the Government. The project area is only 7 km east of the small regional

township of Balama. Ample labour can be accessed from Balama. The town hosts a primary school and secondary school, provincial government offices, a community medical clinic, police station and numerous local businesses. Electricity is available in Balama town, along with internet and mobile phone services. A large regional dam is located only 14 km northwest of the project site."

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Now to the biggest RISK with Syrah:

 

DEPTH OF MINERALISATION

 

We will know how deep the mineralisation goes with this year's extensive drilling program. One positive will be low cost drilling. Drilling into graphite is very easy on the equipment and the drills will be quick.

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The grade is world class.

The quality of graphite is first class.

The size of the resource (in area) is huge.

The metallurgy is terrific.

 

The missing piece to the definitive answer is the depth of mineralisation. Right now the market cap is $100M. To me that's very cheap considering we are only missing one vital piece of information.

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I want to make one point. This is still a high risk stock. If there is no depth to the mineralisation then it may prove to be only an average deposit and perhaps not even commercial. Hence why the market cap is still only $100M. The current price reflects a "POTENTIAL" world class graphite resource. If it's proven by drilling over the next 12 months, then obviously the $100M market cap becomes irrelevant bearing in mind the total costs of production will be ridiculously cheap. Mining graphite ore from surface to depths involving only an open cut mine would be as cheap as it gets in mining. Graphite crumbles (think of the carbon in pencils). You can mine a lot of tonnes effortlessly. The graphite market is also essentially a private market. There is no spot market for graphite. It's a market between willing buyers and suppliers. Currently premium grade flake graphite sells for ~$3,000/tonne. That price is set to soar (see article in the link below). Therefore if a graphite producer has a JORC resource of say 200M tonnes grading 10% graphite, it's the equivalent of having 40 million ounces of gold at current prices. It's actually even better than that because the costs of production for graphite are WAY BELOW gold production costs.

 

The graphite market is set to boom. It's early days.

 

http://www.marketwatch.com/story/boom-in-t...ders-2012-04-13

 

Premium graphite is so profitable SYR will probably proceed to a pilot plant in 2013 assuming they JORC a commercial resource.

 

Canadian investors are salivating at Northern Graphite's (TSX:NGC) resource. 26M tonnes at 1.9% graphite. Have a read of SYR's announcement on April 18. Look at the grades. Average grade 14.5%!

 

I also believe Appendix 1 of global graphite explorers/producers on Page 7 has been put there for a reason. Note the comment against the No.1 producer, Jixi Liumao. 360M tonnes @ 15%. "currently world's largest".

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"The missing piece to the definitive answer is the depth of mineralisation. Right now the market cap is $100M. To me that's very cheap considering we are only missing one vital piece of information. "

 

 

Well imo no it's not cheap with a 100 million market cap which actually is 115 million and closer to 135 million with the excise of options. It is the key to this going ahead imo!

 

Having said that, I do agree with this though and yes it will be huge if there is depth: :biggrin:

 

I want to make one point. This is still a high risk stock. If there is no depth to the mineralisation then it may prove to be only an average deposit and perhaps not even commercial. Hence why the market cap is still only $100M. The current price reflects a "POTENTIAL" world class graphite resource. If it's proven by drilling over the next 12 months, then obviously the $100M market cap becomes irrelevant bearing in mind the total costs of production will be ridiculously cheap. Mining graphite ore from surface to depths involving only an open cut mine would be as cheap as it gets in mining. Graphite crumbles (think of the carbon in pencils). You can mine a lot of tonnes effortlessly. The graphite market is also essentially a private market. There is no spot market for graphite. It's a market between willing buyers and suppliers. Currently premium grade flake graphite sells for ~$3,000/tonne. That price is set to soar (see article in the link below). Therefore if a graphite producer has a JORC resource of say 200M tonnes grading 10% graphite, it's the equivalent of having 40 million ounces of gold at current prices. It's actually even better than that because the costs of production for graphite are WAY BELOW gold production costs.

 

The graphite market is set to boom. It's early days

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