Another quiet achiever

For years, BP has described themselves as "The Quiet Achiever". Well, they are not alone. SYR has consistently made major announcements, without fuss and fanfare, but containing good news for holders (often tucked away on page 3!)

Today, we have great news, modestly hidden behind a heading like:

"Update on Memorandum of Association with Chalieco". Wow! Be still, my beating heart!

But it's really worth reading, and worth thinking about the implications of what is said.

Look at the graphite, for starters. SYR has had "many enquiries from China-based buyers". So the Chalieco deal is likely to be considerably expanded, beyond the current 80-100K tonnes per annum. When they say that "Syrah is currently reviewing its production targets", that sure doesn't mean that they are looking to reduce them.

The vanadium part of the announcement is possibly even more interesting, for its possible impact on profitability. Why is that? Because SYR have quietly raised the proportion of their vanadium production which they expect to sell at battery quality (>99% V2O5) from 25%, as estimated in the 8 April announcement, to 50-70% today. Now that is a very big deal, since the standard concentrate, at 98.5% V2O5, sells for US$12-15 per kg, whereas battery grade material, at 99.9%, can sell for about US$500 per kg. (These figures are from the 8 April announcement).

Just ponder for a moment what a difference that makes, when the initial planned production of vanadium is 5K tonnes per year - yes, that's 5,000,000 kg - and now looking likely to go higher, quite quickly.

It was lovely to see the market not understand at first how good this announcement is, so the price dropped, and I could buy a few more!

Cheers, Prime1