Ann: Q1 2019 Interim Update, page-58

the good news: they are able to produce and sell around 50 kt per quarter and 200 kt per year of graphite material. while that is still much lower than nameplate (350 kt annually) personally, I am impressed they are able to achieve these numbers both in sales and production output. who would have thought so just one or two years ago. they are basically adding 200 kt of graphite per year to an already over-supplied market of 600 kt and are still able to sell this huge added quantity. call me impressed.

the bad news: they are getting low prices and if they don't reduce substantially their all-in-sustaining costs per tonne (higher than 500 US$), the operations are hardly profitable. (Expected Q1 2019 weighted average graphite price achieved is US$460 - US$470 per tonne (CIF) versus the guidance range of US$500 - US$600 per tonne).

I maintain my assessment, small flakes graphite is a commodity business (price determined by the lowest marginal cost producer) the money is in value added graphite, the commercial success or not of balama spherical graphite plant will determine the future of syrah. the main issue/challenge IMO is that the chinese could simply buy cheap graphite raw material from syrah at 98% purity and then purify it at low cost china and sell it to the rest of the world competiting with balama.....could balama in the USA compete cost-wise with the chinese ? time will tell.