One of the best performers on the Australian share market on Monday has been the Syrah Resources Ltd (ASX: SYR) share price.
In morning trade the graphite miner's shares are up over 6% to $1.73.
Why is the Syrah share price charging higher?
As well as getting a lift with the rest of the resources sector due to easing trade war concerns, Syrah provided the market with an update on production at its Balama project this morning.
According to the release, the company's production improvement plan for the Balama graphite operation has been delivering strong results.
Management advised that there has been a significant improvement in graphite recoveries and consistently high product quality has been achieved following the resumption of production last month. It believes that these outcomes provide confidence for ongoing production performance.
In November Syrah's average graphite recoveries were 74%, versus 53% in the third quarter and 54% in September. In addition to this, the average fixed carbon content in November was greater than 95%.
As a result of this, the company is on track to achieve its full year 2018 production target of 101kt to 106kt of graphite concentrate.
Should you invest?
Given the numerous production disruptions and underwhelming production recoveries this year, I thought that this was a very positive update from Syrah and I can't say I'm surprised to see its shares charge higher.
While it is a little too soon for an investment from me, if it can continue to run its operation as well as this over the coming quarters then I'll certainly be taking a closer look at it.
For now, though, I would suggest that investors stick with diversified mining giants such as BHP Billiton Limited (ASX: BHP) and Rio Tinto Limited Fully (ASX: RIO). Especially after recent pullbacks in their respective share prices.
