The Syrah Resources Ltd (ASX: SYR) share price has been in sensational form on Monday.
In afternoon trade, the graphite producer’s shares are up over 15% to $1.33.
This means the Syrah share price is now up 36% year to date. It is also trading within touching distance of its 52-week high.
Why is the Syrah share price rocketing higher today?
Investors have been buying Syrah shares on Monday after the release of a very positive announcement.
Just under 12 months ago the company decided to suspend production at its Balama Graphite Operation in Mozambique. The company made the move in response to COVID-19 impacts.
Operationally, these impacts led to travel restrictions which were impacting the mobility of the Balama workforce.
In addition to this, the pandemic led to a reduction in demand for the battery making ingredient due to lockdowns, mobility restrictions, and economic uncertainty negatively impacting electric vehicle sales.
However, with the worst now appearing to be over and demand for battery making ingredients rebounding very strongly, Syrah has decided to restart production at Balama.
Management explained that “Syrah is able to manage within current travel restrictions, and market conditions are deemed supportive of recommencing production.”
Syrah advised that it will now progress the recruitment of labour required to restart operations at Balama.
After which, it estimates that it will commence production at the operation within the next two to three months.
Is the Syrah share price in the buy zone?
According to a note out of UBS from last month, its analysts believe the Syrah share price is attractively priced.
The broker has a buy rating and $1.50 price target on its shares at present. Based on the latest Syrah share price, this implies potential upside of almost 13% for its shares over the next 12 months.