With the Syrah Resources Ltd (ASX: SYR) share price down almost 35% in the last six months, it certainly hasn't been easy to be a shareholder of the graphite producer.
But thankfully things have started to improve with the release of two important announcements in the last few days. This has helped drive its share price higher by around 10% since Friday of last week.
The first announcement was an update on its giant Balama project in northern Mozambique. Once commissioned Balama will be the leading global producer of high purity graphite, supplying traditional industrial graphite markets and emerging technology markets.
The project has been plagued by higher capital expenditures and delays in the past, but things finally appear to be going to plan now. According to the release commissioning remains on schedule for the second quarter of 2017 and the capital budget remains unchanged at US$193 million.
Unsurprisingly the market responded positively to the announcement, driving Syrah's shares higher.
This morning its share price was given a further boost after the company announced that it has signed a non-binding memorandum of understanding with BTR New Energy Materials in China in regards to sales and supply chain cooperation.
Based in Shenzhen, BTR is the world's largest manufacturer of battery anode materials for lithium ion batteries. Furthermore, according to the release BTR is also a leader in technology development and production of battery anode materials, supplying both the Chinese domestic and export markets.
Should you invest?
Although the company has had a number of problems in the past, I do feel as though it has turned a corner now.
Should there be no further delays to Balama then the graphite producer could prove to be an excellent investment. But of course like all investments in the resources sector, it would be a reasonably high risk one and should therefore be restricted to just a small part of a portfolio in my opinion.
All in all I would put it up there with Galaxy Resources Limited (ASX: GXY) and South32 Ltd (ASX: S32) as my preferred picks in the sector right now.
