The Syrah Resources Ltd (ASX: SYR) share price has risen 13% today following an announcement this morning.
Syrah Resources is an industrial minerals and technology company that owns and constructed the Balama Graphite Project in Mozambique, the largest natural graphite mine in the world. Syrah’s natural graphite and battery anode material projects are exposed to the lithium-ion battery markets.
Smashing Expectations
This morning, Syrah released an update to investors on its Balama project.
The update was for Q1 2019 and showed that they beat guidance for graphite production and cash positions. Total graphite production was 48kt for the quarter compared to guidance of ~45kt. Syrah also reported results at the upper end of guidance for sales volume (48kt on guidance of 45kt-50kt) and average prices achieved ($469 per tonne on guidance of $460-$470 per tonne).
As a result of the positive news, Syrah’s share price has gone from $1.01 three days ago to over $1.31 today, an increase of around 30%. Despite this, the share price is still far lower than it was six months ago when it was over $2.00 per share.
The announcement stated that further details will be released in the Q1 2019 Quarterly Activities Report and Appendix 5B Cash Flows, both due to be released on 29th April 2019.
Is Syrah A Buy?
Although Syrah beat guidance in the first quarter, there is more to the story.
In FY18, the company reported a loss of $29 million after costs more than doubled from 2017. Balama, their main project, is also making losses; a loss before income tax of $20.6 million in 2018 to be exact. You might have seen the share price making huge gains this week, but don’t get swept up in the hype. While the company is still making a loss, there are certainly better options.
The three companies in the free report below could be a good place to start looking…
[ls_content_block id=”14945″ para=”paragraphs”]
Disclaimer: At the time of writing, Max does not own shares in any of the companies mentioned.
