Syrah Resources Ltd (ASX:SYR) announced that its Scoping Study indicates that Balama West represents a world class graphite deposit with favorable technical mining and processing factors, minimal waste stripping requirement, good flotation recoveries in a simple processing circuit to a high quality product, favorable location with respect to infrastructure and presents a real opportunity to promote sustainable regional development. The Company also seeks to retract part of its ASX announcement dated June 4, 2013, which made reference to base case projected sales and price statements, which implied economic viability, on the basis that the company does not yet have reasonable grounds for those statements due to the Inferred nature of its resource.

Syrah Resources Ltd (ASX : SYR), (Syrah or the Company) has received the Scoping Study for Balama West prepared by Snowden Mining Industry Consultants (Snowden) with specialist work undertaken by Mintek (metallurgy), Metallicon, (process engineering and design), Environmental Business Strategies (environment and social), The MSA Group (resource definition), Knight Piesold (tailings dam) and Ports of Africa (port and shipping). Snowden was engaged to evaluate only the Balama West deposit and provide a framework for future development.

The Scoping Study completed by Snowden is the result of a 9 month technical study and project assessment program and has generated a report considered by Syrah to be a very thorough analysis. Whilst significant mineralisation has been identified at Balama West, wide drill spacing has resulted in the Resource being wholly classified at an Inferred level which is of insufficient certainty, under the JORC Code and ASX Listing Rules and guidance, to permit the technical and economic parameters required to imply economic viability.

Shareholders should note that for the Company to establish economic viability of the Balama West project, the Company will need to upgrade an appropriate portion of its Inferred Mineral resources to a higher level of confidence with sufficient consideration of mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and government factors.

Having regard to the above, the Scoping Study considered a number of alternative scenarios and identified three propositions for future consideration and determined the most realistic outcome (the base case).

Clarification of ASX announcement

It is important to appreciate that financial information in relation to the economics of the Balama West project is not currently available in a sufficiently certain form to justify disclosure. Statements implying economic viability require reasonable grounds, otherwise they are taken to be misleading.

For these reasons the Company would like to retract part of its ASX announcement dated 4 June 2013 which made reference to base case projected sales and price statements, which implied economic viability, on the basis that the company does not yet have reasonable grounds for those statements due to the Inferred nature of its resource. Shareholders are advised that these statements were predicated upon an appropriate portion of the Inferred Resources being upgraded in resource status, which has not occurred at this point in time. Accordingly, the Company cautions shareholders from using those statements as the basis for investment decisions regarding shares in the Company.

In addition, shareholders are advised that due to the Inferred nature of the Balama West resource the Scoping Study does not establish the economic viability of Balama West. Syrah aspires to be a producer based upon the market research including extensive and ongoing discussions and meetings with potential buyers including under Non-Disclosure Agreements over the preceding 9 months, indicating suitable market capacity for this volume.

The Scoping Study indicates that Balama West represents a world class graphite deposit with favorable technical mining and processing factors, minimal waste stripping requirement, good flotation recoveries in a simple processing circuit to a high quality product, favorable location with respect to infrastructure and presents a real opportunity to promote sustainable regional development.

This Scoping Study contains the necessary information required to formally apply for the Mining License, which process has now been initiated.
Following receipt of this Scoping Study, Syrah is aggressively pursuing all required information needed to upgrade the Inferred Mineral Resources to the Indicated and Measured categories to enable calculation of ore reserves.

The Scoping Study provides the foundation for Syrah to develop the Balama West Graphite Project and, pending favourable outcomes from the current site work, underpins the current plan to immediately commence a feasibility study. Syrah is well into a diamond core infill drill program designed to upgrade the Inferred Mineral resource category.

Depth Balama West Inferred Mineral Resource size and grade Contained graphite (million tonnes) Contained vanadium pentoxide (tonnes)
From 0 – 100m 214.31 Mt @ 9.9% TGC & 0.20 % V2O5 21.21 420,000
100m – 300m 349.65 Mt @ 9.7% TGC & 0.21 % V2O5 33.92 750,000
TOTAL 567.9 Mt @ 9.8% TGC and 0.21 %V2O5 55.13 1,170,000

The information in this report as it relates to geology, geochemical, geophysical and exploration results was compiled by Mr Tom Eadie, FAusIMM, who is a Competent Person and Chairman of Syrah Resources Ltd. Mr Eadie has more than 20 years experience in the activities being reported on and has sufficient expertise which is relevant to the style of mineralisation and type of deposit under consideration. He consents to the inclusion of this information in the form and context in which it appears in this report.

Snowden Mining Industry Consultants has consented to the issue of this announcement in the form and context in which it appears.

The Inferred Mineral Resource estimates contained in this report have been prepared by Mr Mike Hall MAusIMM, PrSciNat who is a professional geologist working with MSA Group with over 30 years’ career experience including 14 years in the field of Mineral Resource estimation. Mr Hall is a Competent Person in terms of The JORC Code and has sufficient expertise which is relevant to the style of mineralisation and type of deposit under consideration. He consents to the inclusion of this information in the form and context in which it appears in this report.

The MSA Group has consented to the issue of this announcement in the form and context in which it appears.

Paul Kehoe
Managing Director
Syrah Resources Ltd
Mobile contact – +61 3 414156288
Email – p.kehoe@syrahresources.com.au

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