similarities?

PROACTIVE INVESTORS AUSTRALIA

Australian graphite players take market by storm: Syrah Resources, Monax Mining, Kibaran Nickel
Monday, May 28, 2012 by Angela Kean Graphite is definitely the commodity to be in at present with investors backing players to all new highs. Syrah Resources is the market darling of the moment with share prices hitting a one year high of A$2.15 this week.
Graphite has recently had quite a substantial return to interest from the investment community due to its near-term prospects and long-term growth potential.

This hot commodity is what has driven explorer Syrah Resources (ASX: SYR) to its highest point yet at A$2.15, an over 2,500% increase on the lows of $0.08 the company was trading at around this time last year.

Perhaps it has something to do with graphite being classified as a “critical mineral” by most western governments, or maybe the fact that we depend on supplies from China, Brazil, and India, which produce nearly all of the world’s graphite.

China produces about 70% of the world’s graphite alone but is experiencing slowing growth and reserve depletion.

The nation is also continuing to consolidate and reduce the number of graphite mines in Hunan province from 230 to 20 mines which will constrain global supply further with a loss of around 100,000 tonnes per annum, or 10% of annual global graphite supply, forecast.

In the current market, graphite prices have been increasing solidly and demand is outstripping supply.

Prices of coarse flake graphite have risen from around US$600 per tonne to around US$3,000 per tonne.

Based on demand and supply fundamentals it is unlikely that graphite will return to its past lows and the price of graphite has the potential to rise even further.


Syrah Resources

Syrah may not have a Resource yet but it won’t be long, with the company unearthing almost 288 metres of high grade graphite mineralisation from surface at its Balama Project in Mozambique earlier this week.

With the rapid progress already being made at the project, Syrah is now expecting to deliver a maiden Resource during 2012, much earlier than originally anticipated.

Graphite mineralisation at Balama has been mapped over a strike of greater than 7 kilometres.

The graphite flakes being unearthed appear to be predominately coarse to very coarse in size, which is extremely promising as coarse flake graphite generally attracts higher sales prices.

Metallurgical testwork has shown that Balama contains medium to coarse grained graphite that can easily be upgraded to a high grade 94% carbon concentrate at high recoveries.

Further upside to the project is the associated highly anomalous vanadium geochemistry, which is widespread and provides the potential for vanadium credits.

Monax Mining

Monax Mining (ASX: MOX) hit a one year high of around $0.10 earlier this month, almost double the lows it was trading at this time last year.

The company announced this week it had discovered high grade graphite samples of up to 19.84% carbon at its Waddikee Project on the Eyre Peninsula.

Monax has also identified another area of the project that has shown to be prospective for graphite.

Earlier this month geochemical assays confirmed the Argent prospect as a high priority graphite target, with rock chip samples reporting between 10.24% and 16.04% carbon.

Monax is now in the process of planning its maiden drilling program.


Kibaran Nickel

Kibaran Nickel (ASX: KNL) is a new player in the graphite game with its planned acquisition of Tanzgraphite, which has secured options over 1,308 square kilometres known as the Mahenge and Arusha projects in Tanzania.

The Mahenge project hosts the most prospective target, Ndololo, which has been shown to host grades of 15.5% carbon in previous exploration.

Ndololo has an exploration target of between 3.5 and 7 million tonnes at between 10% and 15.5% carbon.

Exploration work undertaken in 1945 also indicated a 97.5% recovery of flake graphite, with flake sizes ranging between 1.5 and 8.5 millimetres in size.

Mahenge hosts two other prospects, Epanko and Kasita, which are also prospective for similar graphite flake sizes to Ndololo.

The Arusha project has also been shown to host several graphite occurrences within graphitic schists.

Highlighting the market reaction to the acquisition, Kibaran shares spiked over 330% to an intra-day high of $0.20 following the announcement of the news earlier this month, compared to the lows of $0.046 the company was trading at in April.