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TheGekko

2,577 Posts.

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20/11/17

17:20

Post #: 28958879
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Originally posted by Prime1 ↑

Percentages can be misleading!

Sometimes we need to look at the actual figures, to avoid mistakes. And that is the case when we talk about the large-flake market, and the contribution which Balama will make.

Flake size distribution of Balama graphite was reported in the Feasibility Study, dated 29 May 2015. A total of 20% of the product is classified as Large (80 - 50 Mesh) or Jumbo (+50 Mesh). Doesn't sound like there is much there, does it?

That's the assumption some people have made, and, in this case, the actual tonnage figures show that it is dead wrong. At full production, (350K tonnes per year), Balama will be producing 70K tonnes of large-flake per year! That simply dwarfs the production of that product from any other current or planned graphite mine in the world, and is a large proportion of the current world consumption of large-flake. Any suggestion that Syrah will not be in a position to supply the large-flake market, and that other miners will be able to move in, is just not supported by the facts.

Add in the other uncomfortable reality - that Balama production cost will be just about the world's lowest - and it is easy to see why some of the smaller companies, may be putting on a brave face, but it looks like they are getting nervous.

Cheers

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Simply put, Syrah will beome a massive barrier for new entrants to the graphite producer market, particularly in the short term. SYR's cost advantage is key.

SYR Price at posting: $4.03 Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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