AMN - MOZAMBIQUE: Balama mining agreement signed

Syrah Resources has had the mining agreement for its Balama Graphite Project in Mozambique signed by the country’s Minister of Mineral Resources and Energy Ernesto Max Elias Tonela on behalf of the government.

The agreement consolidates all prior project documents and approvals. It provides the company with clarity around the governing laws and contractualises the mining rights and other obligations for the Balama project.

The final step in the process is for the agreement to be presented to the Administrative Court in Mozambique for sanctioning after which it will be binding and enforceable.

Syrah has been continuing to ramp-up production of flake and fines graphite at Balama with increased recoveries and production achieved in February.

An issue has arisen regarding the dryer of the fines graphite circuit at the Balama operations that has caused damage to the fines dryer refractory bricks and the flame tube.

The coarse flake graphite circuit dryer is independent of the fines dryer and continues to operate. Fines graphite can be rerouted to the flake dryer such that production can continue whilst the fines dryer is being repaired.

The company is investigating the cause of the issue and planning repairs to mitigate production impacts with the assistance of the fines fryer vendor.

Syrah’s best estimate of the period of time for repair is eight weeks and the cost of the repair is not expected to be material.

While the fines dryer is not operational, Syrah expects to produce about 65% of the volume planned for ramp-up during this period.

Production volume impact relating to the fines fryer may be mitigated or eliminated by maximising flake fryer throughput during the period of repair, and subsequently increasing production once the fines dryer repair is complete.

Syrah produced its first saleable flake graphite product in November 2017 and transitioned into operations on January 1, 2018.

www.syrahresources.com.au