Syrah Resources Ltd

SYR Details
·         Positioned to target high growth markets: Syrah Resources Ltd (ASX: SYR) stock lost over 3.7% on March 15, 2017 leading to a total fall of over 28% in the last four weeks owing to some volatility and softness in market sentiments. Recently, UBS group and Macquarie Group ceased to be major holders in the group which could have added to the stock pressure, while JCP Investment Partners became a substantial holder. On the other hand, the group is well positioned to leverage enhanced value of high quality Graphite and is targeting to be a consistent supplier to the high growth technology markets. Accordingly, SYR is aggressively developing the world class Balama Project at Mozambique which has been said to be on track for commissioning in the second quarter of 2017. Syrah has forecasted the first production in the third quarter of 2017. The construction of the Balama process plant is 52.4% complete as at 31 December 2016. However, the Project capital costs increased to US$200 million wherein the group is funding this from their current cash reserves. Meanwhile, the group is also progressing with regards to arranging US$50 million debt facility for Balama costs and other general corporate activities, as a conservative contingency.
 
·         Recommendation: SYR stock corrected over 42.55% in the last six months (as of March 14, 2017), and we maintain our “Buy” recommendation on the stock at the current price of - $ 2.34
 

High quality Balama reserves against peers (Source: Company Reports) 

Galaxy Resources Ltd

GXY Details
·         Second Shipment of Lithium Concentrate to Chinese customer: Galaxy Resources Ltd (ASX: GXY) stock fell over 3.125% on March 15, 2017 leading to a total fall of over 18% in the last four weeks. Despite this weakness, the group operations are progressing well wherein they finished their second spodumene concentrate cargo loading at the Port of Esperance, Western Australia. Mt Cattlin plant production ramp up is leading to a steady progress towards nameplate levels. Mt Cattlin is targeting a better specification of 6.0% Li₂O and mica concentrations of closer to 1%. Management also reported that they are currently transitioning into a stable operations phase at the project. This steadier state coupled with some major operational appointments, would enable a better focus to leverage potential opportunities.
 
·         Recommendation: GXY stock surged over 33.3% in the last six months (as of March 14, 2017). We maintain our “Hold” recommendation on the stock at the current price of – $ 0.46

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