Syrah Resources (ASX:SYR) share price plunges after plant fire causes 5 week production delay

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The Syrah Resources Ltd (ASX:SYR) share price has plunged 15 cents or 6.4 per cent to $2.18 after the graphite miner said a plant fire will result in a five week delay to production at its Balama Graphite Project in Mozambique.

Syrah estimates a production loss of 30kt in Q4, including allowance for ramp up as the plant comes back online.

For Q4, Syrah revised its production forecast to approximately 30-35kt, resulting in full year production guidance of 101kt-106kt.

Syrah says cash on hand as at 30 September 2018 was $US100.3 million providing sufficient liquidity to manage the incident, and to continue the Company’s Balama and Battery Anode Material strategy.

Last month, in what now looks like a case of fortuitous timing, Syrah Resources successfully raised $94 million via an institutional placement at a share price of $2.23.

Rob Tucker of Chester High Conviction Fund has been attracted to Syrah as the world’s largest graphite deposit, which it expects will extract high quality graphite flake at (eventually) one of the lowest costs globally.

Contributors to this article may own shares in some of the companies mentioned in this article. The Capital Club has a thorough disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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Bruce Jackson has 30 years of hands on investing experience. He is passionate about stock market investing, running his own portfolio and SMSF. His focus is on small cap growth stocks. You can contact Bruce at brucej@thecapitalclub.com.au