The Syrah Resources Ltd (ASX: SYR) share price has continued its strong run and climbed to an all-time high this morning.
In early trade the graphite producer's shares are up over 5% to $4.64.
What happened?
This morning Syrah announced the first production of bagged saleable flake graphite from its Balama Project in Mozambique.
According to the release, following the intermediate concentrate produced in late October, the company has now successfully commissioned the final stages of the flake circuit. This includes polishing, filtration, drying, screening and bagging.
Pleasingly, the flake graphite produced is within its expected grade range and in excess of 95% fixed carbon. High fixed carbon grades are required when it is used in battery anodes.
Management has advised that the remaining commissioning activities will focus on the fines circuit and further optimisation works.
As a result, it expects its first shipment of flake product from Nacala Port in the coming weeks, with its first cash receipts expected in early 2018.
The company anticipates production of between 160,000 to 180,000 tonnes in 2018, following customer qualification processes.
Should you invest?
It has been a long time coming and faced a number of delays, but production has finally commenced and revenues will soon be generated.
Whilst I think Syrah could have a bright future ahead of it, I think investors ought to wait to see what impact the addition of 160,000 to 180,000 tonnes of graphite to the market does to prices in 2018.
For some time now there have been concerns that it could lead to an oversupply of the metal, but demand has been robust due to the rise of electric vehicles.
In the meantime, investors might want to consider Western Areas Ltd (ASX: WSA) or Mineral Resources Limited (ASX: MIN) as alternative ways of gaining exposure to the EV boom.
