Syrah Resources (ASX:SYR) provided an updated on its MOU with Chalieco signed in March 2014. Syrah was not able to lock in an offtake on a specified amount of vanadium with Chalieco within three months of signing the MOU, due to a lack in data. A draft Scoping Study has already been received and is currently undergoing review by Syrah’s technical team. Both parties expect an offtake agreement to be concluded once these issues are worked through and final offtake amounts are finalized.

As quoted in the press release:

A draft Scoping Study has been received and is currently undergoing review by Syrah’s technical team. Syrah believes that it is inappropriate to release the details until the final Scoping Study is received. Suffice to say, Syrah called the project the “Balama Graphite and Vanadium deposit” from first exploration and thus is very confident that vanadium will represent significant value in the deposit.

However, until such time as Syrah has shown the financial viability and scale of the vanadium operation, it was not possible to lock in an offtake on a specified amount of vanadium with Chalieco.

Syrah indicated that a legally binding offtake with Chalieco was expected to be negotiated within three months of signing the MOU. This was the firm intention of the parties at that time. Due to the reasons above, Syrah does not expect that the offtake will be finalised within the three months. Syrah and Chalieco are continuing to work very closely together and fully expect an offtake agreement to be concluded once these issues are worked through and final offtake amounts are finalised.

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