Syrah Resources Ltd

SYR Details

Syrah Resources Ltd.’s (ASX: SYR) Balama project commissioning activity has commenced in May-2017 with first production scheduled for August 2017. The production ramp-up is currently expected to be 140,000 to 160,000 tons of flake graphite concentrate in the first year of production, and 250,000 to 300,000 tons in the second year. During the quarter, multiple sales initiatives have been progressed including Memorandum of Understanding (MoU) with BTR New Energy Materials, the world’s largest battery anode manufacturer, and finalization of a Statement of Sales Intent (SSI) with a European trader consortium for 15,000 to 25,000 tons of flake graphite per annum for 5 years.

During Q1 CY2017, US$24.5 million was spent on the Balama Graphite Project, resulting in total project development expenditures of US$137.4 million as at 31 March 2017. An additional US$30.6 million in development expenditures have been committed as at the end of the quarter, which brings total actual and committed capital expenditures to US$168 million. SYR is also advancing with the downstream Battery Anode Material project to capitalize on the available margins and exponential growth in the global battery market.  Global battery market is the fastest growing industry and expected to drive the natural flake market from 15% to 35% share by 2021. Given the ongoing project developments and growing market opportunity for graphite concentrate, we give a “Buy” recommendation at the current price of $3.29


SYR Daily chart; (Source: Thomson Reuters)

Saracen Mineral Holdings Limited

SAR Details

Saracen Mineral Holdings Limited’s (ASX: SAR) latest drilling results demonstrated the potential for extended production growth and mine life at both Carosue Dam and Thunderbox. Further, the company is on track to hit the 300kozpa production rate in the current quarter with FY18 outlook of 170koz for Carosue Dam. Notably, solid drill outcomes at Karari are also demonstrating significant growth opportunity while confirming the mineralization remains open in all directions and further results are expected to be released shortly from all three key projects. The stock has moved up about 10.9% in last three months (as on July 06, 2017). We give a “Buy” recommendation at the current price of $ 1.17


SAR Daily chart; (Source: Thomson Reuters)

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