Syrah Resources Limited’s [ASX:SYR] share price has rocketed up this morning by 7.02%, currently selling at $1.92. The move comes off the back of a relatively slow morning of trading as investors hold their breath pending the outcome of the US midterm elections.
Syrah Resources is an Australian-based industrial minerals and technology company. Syrah owns and constructed the Balama Graphite Project in Mozambique. Balama is a high grade, long life asset and is the largest natural graphite mine globally.
The company is also developing its downstream Battery Anode Material (BAM) project in Louisiana, USA. The company’s strategy is to rapidly produce and commence qualification of its BAM products to establish a core ex-Asia battery supply chain position.
What caused the jump in price?
Syrah’s share price has taken a favourable turn for investors of late, with recent news of a binding sales agreement giving investors a further confidence boost.
The company announced this morning a sales agreement with Chinese company Qingdao Taida New Energy Technology Co Ltd (Taida). In a media release, Syrah states the agreement is for 20 kilotonnes of natural graphite from its Balama Graphite Project.
Taida, a Chinese-based technology company, focuses on research and development and produces carbon materials including spherical graphite for battery anode materials.
Syrah did not comment on how much the sale was worth.
What’s next for Syrah Resources?
Syrah’s share price has been on a slow decline since the beginning of the year, shedding over 48% in the past 12 months. However, Syrah’s managing director and CEO, Shaun Verner, remains confident in the company’s performance.
‘This contract is another demonstration of Syrah’s Balama graphite product penetration into China and the battery anode material market. It is also pleasing to see the significant volume of spot sales translating into this type of quality longer term commitment, as the sales book continues to evolve.’
Syrah Resources plans to establish their Balama product as a base hold for battery anode materials and other specialty applications. With an ever increasing demand for lithium-ion batteries (where graphite anodes are utilised) this new deal certainly has investors excited about Syrah’s prospects.
For Money Morning
PS: If you’re looking to invest in Australia’s lucrative resources industry you MUST first read this FREE REPORT: ‘10 ASX Resource Stocks You Should Be Watching’. Download now.