One of the worst performers in the last five trading sessions has been the Syrah Resources Ltd (ASX: SYR) share price.
Its shares are down over 14% since this time last week, stretching their 12-month decline to in excess of 40%.
What happened?
The catalyst for this latest decline was news that delays to construction in the processing plant at its Balama project during July means that the commencement of production has been pushed back from late August to October.
Furthermore, this has resulted in an increase in its project construction budget from US$200 million to US$205 million.
I can't say I'm surprised to see its shares sink lower on the news. After all, the massive graphite project had been fraught with delays for a long time, but things finally appeared to be coming together on time and on budget.
But should you buy the dip?
Whilst I do think that Syrah and its Balama project has significant potential, I would suggest investors hold off an investment until production does finally commence.
Considering the company's track record, I wouldn't be at all surprised to see production delayed beyond October.
In light of this, I would sooner invest in Galaxy Resources Limited (ASX: GXY) or Kidman Resources Ltd (ASX: KDR) ahead of Syrah.
But if you are confident that everything is in place now, one broker thinks investors should be snapping up shares.
According to a research note out of UBS yesterday, the investment bank has overlooked the production delays and rates its shares as a buy with a massive $3.80 price target.
Should Syrah's shares reach this level, it would mean a gain of 35% from the last close price.
