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1 ASX ANNOUNCEMENT 1 March 2012 ASX Announcement BALAMA GRAPHITE PROJECT UPDATE ASX Code SYR Corporate Structure Ordinary Shares Issued Shares: 114,908,339 Highlights: Initial metallurgical testwork on a bulk sample from the Balama Graphite Project indicates that a concentrate grade in excess of 95%C has been achieved to date with flotation recoveries of 87%. This result is highly encouraging given that the sample collected was partially weathered and not specifically targeted within the known high grade areas. A 50 kg bulk sample collected from a shallow exploration trench at the Balama Graphite Project for preliminary metallurgical test work had a head grade of 11.2% organic carbon. The flotation concentrate produced from this preliminary test contained graphite flakes up to 568 microns with an average size of 159 microns (medium to coarse flake graphite). Highest carbon grade is achieved in the +177 micron size fraction which augurs well for producing a medium to coarse flake product. A diamond drill rig and a RC drill rig have been secured and drilling is scheduled to commence in April The Board of Syrah Resources Ltd (ASX: SYR) is pleased to provide the following update on the Balama Graphite Project (100%) located in Mozambique. METALLURGY UPDATE Outcropping graphite mineralisation at Balama has been identified by Syrah over a strike length of at least 4km. Follow up trenching has exposed the mineralisation in several areas and a program of metallurgical testwork was instigated to ensure that Options Exercisable at 25c: 1,500,000 Exercisable at 26c: 17,000,000 Major Shareholders Basapa PL 12.33% Copper Strike Ltd 9.61% Kitara Investments PL 8.93% Board of Directors Mr Tom Eadie Non-Executive Chairman Mr Paul Kehoe Managing Director Mr Alistair Campbell Non-Executive Director Mr Mike Chester Non-Executive Director Ms Melanie Leydin Company Secretary Key Projects Balama Graphite Project (Mozambique) and Nachingwea Graphite Project (Tanzania) Have the potential to be high tonnage, high grade, flake graphite projects. Balama is mainly medium to coarse flake and Nachingwea is fine to coarse flake. Balama is also highly anomalous in vanadium with sample grades up to 1.25%. Tanzania Mineral Sands A very prospective portfolio of mineral sands licence areas, some of which have drill results up to 28% heavy minerals. Mavusi Multi-Metal Project, Mozambique Drill assays up to 4600 ppm U308. Licence area is highly anomalous in rare earths, molybdenum, copper, nickel, PGE s, gold and silver. Website

2 saleable graphite products could be produced from Balama as a precursor to the commencement of an extensive initial drilling campaign. Initial metallurgical testwork has been performed by independent laboratory Mintek in South Africa over the past four months on a single composited trench sample from Balama. This sample was from the first trench completed and is not from a particularly high grade or coarse-grained area. This sample assayed 11.2% organic carbon and 0.1% vanadium and exhibited a degree of weathering. Work to date has focussed on achieving the highest graphite grade possible whilst maximising recoveries. Results so far indicate excellent potential to produce a very high grade graphite product at a medium to large flake size (>177 micron by industry definition). To date excellent recoveries have been achieved from this one bulk sample via conventional flotation processes using standard reagents. Mineralogical examination of a final flotation concentrate produced in the laboratory revealed the graphite particle lengths up to ~568 µm and an average length of 159µm. The examination also indicated that less than 3% of gangue material was still present in the concentrate. Various sighter flotation tests have been performed. The aim of the rougher stage has been to collect only the fast floating material and to reduce the amount of composites reporting to the concentrate. Rougher grades of 65%C at 95% recovery have been achieved in a single pass. On an assay by size basis, the highest carbon grade is achieved in the +150 micron size fraction which augurs well for a medium to coarse flake product. To date the best results have been achieved utilising three stages of grinding and/or pebble milling. Grades in excess of 95%C have been achieved at recoveries up to 87%. This grade has the potential to be further enhanced into a veryhigh grade product in excess of 97%C. There is also a significant amount of vanadium in the Balama deposit. It is believed that the dominant form of vanadium in the deposit occurs as a green coloured barium-vanadium mica mineral but this needs to be confirmed in future drilling and assay programs. The chemical composition of this is the same as roscoelite Figure 1 - High grade graphite from Balama trench with green coloured barium-vanadium mica mineral

3 other than the fact that it also contains barium. Roscoelite is one of the main vanadium ores. To date, no substantial investigation into the deportment of the vanadium has been conducted; however future testwork will also investigate the behaviour, deportment and solubility of the vanadium in the grinding and flotation stages and look at recovery via hydrometallurgical techniques. TRENCHING UPDATE 256 trench samples from Balama from a total of 6 trenches each 200 m across strike to a depth of 1 to 3 m are currently being analysed for graphitic carbon, vanadium and a multi-element mineral suite including precious metals. This program will also compare various analytical techniques for carbon analysis to establish a benchmark for assaying in future drilling campaigns. Results are expected during April EXPLORATION PROGRAM A diamond drill rig and a reverse circulation (RC) rig have been secured for drilling to commence in the first week of April Syrah has contracted to drill at least 5,000m of diamond drilling and 10,000m of RC drilling, but expects to continue these programs until the start of the wet season in late November Syrah anticipates the release of an initial JORC compliant resource in the first quarter of LOCATION AND INFRASTRUCTURE Figure 2 Trench 2 at Balama Graphite Project. The Balama Graphite Project is a 106 km 2 granted prospecting licence located within in the Cabo Delgado province in the District of Namuno of northern Mozambique (Figure 3). The project is approximately 265 km by road (3.5 hours drive) west of the port town of Pemba. Pemba Port is a deepwater container port and is the third largest port in Mozambique (Figure 4). It is anticipated that the Balama graphite concentrate will be transported and shipped from Pemba Port.

4 Balama is accessed by an excellent sealed road from Pemba to Montepuez (Figure 5), a regional township, and then via 45km of unsealed road which is in the process of being upgraded by the Government. The project area is only 7 km east of the small regional township of Balama. Ample labour can be accessed from Balama. The town hosts a primary school and secondary school, provincial government offices, a community medical clinic, police station and numerous local businesses. Electricity is available in Balama town, along with internet and mobile phone services. A large regional dam is located only 14 km northwest of the project site. Figure 3 Balama Graphite Project location map Figure 4 Pemba Port Figure 5 - Road from Pemba to Balama

5 GRAPHITE SIZE AND PRICING CHART Grade Size Price at 94-97% C (at 2012) * Large 177 microns $2,500 - $3,000 Medium microns $2,200 - $2,500 Fine <149 microns $2,000 - $2,400 * Graphite sales are contracted between buyers and sellers. The above prices are indicative only and based on data compiled by Industrial Minerals ( The information in this report as it relates to geology, geochemical, geophysical and exploration results was compiled by Mr. Tom Eadie, FAusIMM, who is a Competent Person and Chairman of Syrah Resources Limited. Mr. Eadie has more than 20 years experience in the activities being reported on and consents to the inclusion of this information in the form and context in which it appears in this report. The information in this report as it relates to metallurgical results was compiled by Janine Herzig, FAusIMM and a Chartered Professional in the field of Metallurgy. Ms Herzig is Principal Director at consulting firm Metval Consulting PL and has significant experience in the activities being reported on and consents to the inclusion of this information in the form and context in which it appears in this report. Paul Kehoe Managing Director Syrah Resources Limited Mobile contact p.kehoe@syrahresources.com.au About Syrah Resources Syrah has 16 exploration projects located in Tanzania, Mozambique, Zambia and Botswana prospective for graphite, vanadium, heavy mineral sands, uranium, coal, rare earth elements, base metals, precious metals and. The most advanced project is Balama, a high grade graphite and vanadium occurrence in Mozambique. Appraisal activities have already commenced at Balama to determine its economic potential. The recently acquired Nachingwea Graphite Project in Tanzania is another substantial graphite project. Syrah has an extensive mineral sands portfolio covering most of the known prospective heavy mineral sands areas in Tanzania. The Fungoni prospect has grades up to 28% HM over 4 m and Tajiri grades up to 12 m over 9 m. Several high quality uranium prospects in the portfolio have the potential to host world class uranium deposits. The most advanced uranium project is also in the Mavuzi licence area with grades up to 4,600ppm U3O8 in historical drilling.