balama - the doors are opening, page-4

Zenmammon, that's a good question, and I suspect we have all thought about it at some time. A small prospecting company suddenly running the world's biggest mine in its field? Surely there are management risks?

Superficially, the first answer would be "Yes!". But it looks as if the risks are being managed quite carefully and competently.

Let's not forget that, despite being the biggest graphite operation, Balama will not be a big mine, as such. Digging out, initially, a million tonnes or so per year of soft rock from a simple open cut, with no overburden, presents challenges about on a par with your local road-metal quarry. Crushing and flotation plant is bog-standard, using technology that's been in place for a hundred years.

On top of that, SYR is not running as a one-man-band. They have recently appointed some very well-credentialed managers to develop and run the mine. Marketing efforts to date appear to have been extremely successful,as already announced. How they will go with new fields we don't know yet, but it is clear that there is a fair amount of scrutiny of the possible options going on. The final mix of applications will obviously rest with the market, but Paul Kehoe's quoted remark at a presentation recently - "You ain't seen nothing yet!" - is starting to ring true.

Would a big company do things differently? Nobody can really say. But it is certainly arguable that a RIO or a BHP-Billiton would be less focused on this project than is SYR, and could end up doing no better, if as well.

The company has made astonishing progress in the last eighteen months. If they keep it up, we will all be very happy.

Cheers, Prime1