uranium at balama, page-39

Tulip,

Not buying SYR because it had a radiometric anomaly at exploration phase would be like not buying a gold or base metal stock because it had an arsenic anomaly, or an iron ore stock because it had a phosphorous anomaly, etc etc (which they do). You would not buy any resource stocks until the mine was built if you took this approach, which is fair enough if you want to be a risk averse investor, but you will miss the leverage that comes with speculation. Just ask the Syrah shareholders who are up twenty to thirty times on their initial investment. Did they worry about the radiometric anomaly? I don't think so.

It is what is in the final graphite concentrate that will count. And that is driven by the mineralogy of the graphite and the surrounding waste material in the mineralisation.

Graphite is one of the most hydrophobic elements around, which means it concentrates in the flotation process extremely efficiently. This is why we see graphite floating on the water of the photographs showing drill hole collars - it is already showing natural flotation without any reagents at all. And this is why such high levels of purity are achieved by most graphite projects.

There are some 16 attributes that make up the product specification list for graphite. This includes sulphides.... so do you want to "worry" about the sulphide content as well, which is extremely common in a lot of graphite deposits, including Balama?

For any uranium in the Balama graphite mineralisation to end up in the concentrate, it would have to be embedded in the individual post-comminution graphite particles to get captured in the concentrate. This is possible but very unlikely given that SYR has stated that the concentrate is very clean and devoid of any significant impurities. So is the company misleading the market? Put your hand up if you are suggesting that.

The lack of an offtake agreement is not unusual considering that the project has only just completed a scoping study. Nearly all other graphite projects at the equivalent stage of assessment are in the same phase. The next 6 to 12 months are very critical for offtakes for all graphite companies in the race to production. KNL are the first and deserve credit, but they will need binding offtake agreements for all planned production to have any chance of getting bank finance, given their micro market valuation. Not all offtake agreements provide finance. And they also don't carry a fixed price for the product. They only provide certainty of offtake based on the market price at the time. So if the price of graphite falls, bye bye small high cost producer first.

It is conventional for offtake agreements to be canvassed and negotiated during scoping/PFS/Feasibility and finalised once the feasibility is signed off and project financing is sought. So Syrah is not behind or in front with this.

Very easy to jump at shadows if you want to.

cheers
Gosouth