Sirius’s rags-to-riches story ends with A$1.8bn Independence deal May 25, 2015 4:01 pm by James Wilson , Mining CorrespondentThree years ago Mark Bennett was huddled in a tent in Australia’s outback, straining to see by torchlight what the last hole that his fledgling mining company could afford to drill had yielded.On Monday the company, Sirius Resources, agreed a A$1.8bn deal to be acquired by an Australian rival, bringing to a culmination one of the most talked-about mining projects in recent years in the resource-rich nation.Shares in Sirius were worth less than 6 cents in July 2012 before Mr Bennett and his team discovered the Nova-Bollinger nickel and copper resource in western Australia. The announced tie-up with Independence Group, a miner of gold and nickel, values Sirius at A$4.38 per share.At a time of falling commodity prices and swaths of job cuts across Australia, Sirius’s rags-to-riches growth evokes far headier times for miners and the age-old excitement of striking a big new deposit. Nova-Bollinger is one of Australia’s largest reserves of nickel and is due to go into production late next year.“This transaction provides a great outcome for Sirius shareholders and I am proud of what Sirius and its employees have achieved,” said Mr Bennett, managing director.Backed by Australian mining entrepreneur Mark Creasy, Mr Bennett found Nova after being given three years and $10m to make a “company-making” discovery in the Fraser Range, about 200km south-east of the mining town of Kalgoorlie.“We were down to the last couple of hundred thousand dollars,” Mr Bennett recalled in 2013 in an interview. “It was the final drilling campaign we could afford to do.”When the drill reached the targeted depth it was already dark, Mr Bennett recalled. “We were looking by torchlight – we had to wait all night,” he said. “The next day it looked good.”Mr Bennett drove the sample 1,000km to Perth, where analysis confirmed the discovery and, as he recalls, “the market went berserk”. If the drilling “had been 50m either way, we would have missed it – we would still be sitting there,” Mr Bennett said.The deal with Independence confirms Mr Creasy – who went to Australia from the UK 50 years ago to work in mining – as one of the country’s wealthiest entrepreneurs. Mr Creasy owns almost 35 per cent of Sirius and after the deal will own 18.6 per cent of the combined group, which had a pro-forma market capitalisation of A$2.7bn on the eve of the deal’s being announced.Independence is paying a 35 per cent cent premium to Sirius’s previous closing price. Peter Bradford, its managing director, said Independence would get synergies and savings from a “dominant land-holding position” in western Australia.The company already mines nickel, copper, zinc and silver in western Australia. It also holds a 30 per cent stake in the Tropicana gold mine run and owned by AngloGold Ashanti.Sirius’s equity investors will also share in a spin-out of further exploration assets into a separately listed company, S2, to be led by Mr Bennett.The acquisition comes as the price of nickel has been around its lowest level in six years. Concern over a shortage, caused by an export ban in Indonesia, has given way to expectations of a surplus and weakening Chinese demand.Shares in Sirius rose 20 per cent to A$3.90 on Monday while shares in Independence fell 12 per cent to A$5.05.Copyright The Financial Times Limited . All rights reserved. Please don't copy articles from FT.com and redistribute by email or post to the web.View commentsLatest onMiningMiners steel themselves for tough talks with Peru’s leftist governmentAugust 22, 2021 10:00 amBHP fires 48 workers for sexual harassment at remote mining sitesAugust 20, 2021 9:48 amGold miners lose their lustre as price of precious metal dropsAugust 20, 2021 7:16 amBHP chief Mike Henry: the measured man shaking up the world’s biggest minerAugust 20, 2021 4:00 amCopper miner Antofagasta posts bumper profitsAugust 19, 2021 5:25 pmContent not loading? Subscribers can also read Sirius’s rags-to-riches story ends with A$1.8bn deal on ft.com Read nowLegal & PrivacyTerms & ConditionsSlavery StatementPrivacyCookiesCopyrightFT and ‘Financial Times’ are trademarks of The Financial Times Ltd.The Financial Times and its journalism are subject to a self-regulation regime under the FT Editorial Code of Practice.
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