SIRIUS RESOURCES NL (SIR)
Charts Exploration Potential over Nova Mining Lease
Sirius Resources NL has identified 17 conductors from ongoing Samson deep penetrating electromagnetic (DPEM) surveys over the granted Nova mining lease (100% SIR).
The first of these high-priority targets, DPEM1 is drill-ready, with 3 RC pre-collars recently completed to a depth of ~500m in preparation of deeper diamond drilling. The first of the diamond holes is expected to commence in the coming days, and we would assume that each holes will take ~3-4 days to complete. The other EM targets are located within a 5km radius of the proposed processing infrastructure (once developed) and are planned to be systematically followed up over the coming months.
More targets being generated through Samson DPEM
The new EM conductors have been generated from the processing of data from Samson DPEM surveys, which are planned to cover the entire mining lease. The latest conductors form discrete drill targets, with more potential drill targets waiting modelling and ranking. The targets have potential to be caused by massive sulphides, which could contain nickel-copper mineralisation. Conductors DPEM1 to 3 are located within Nova-style **bro rocks around ~700m below surface, with dimension of ~650m long. Conductors DPEM4 to 8 are outside the Eye (~1km north-east) at depths ranging from ~300m to 500m, with dimensions ~1km long, but are generally less conductive. Conductors DPEM9 to 15 are discrete relatively shallow targets located in the south-west point of the Eye; DPEM13 is the strongest of these conductors. Conductors DPEM16 and 17 are located near or in the Eyelet, and are defined by large conductors ~1km in length.
We remain highly encouraged by the potential of these targets, which will add significant value if a new zone of mineralisation is confirmed. A new discovery would add mine life and could provide opportunities to increase project scale. On our discounted modelling every year of additional mine life adds over 30c of value (our base valuation assumes only a 10yr mine life).
Striking new targets along Taipan Trend, Polar Bear
The reprocessing of previous EM data over Polar Bear has identified new conductors along the highly-prospective, under-explored Halls Knoll-Taipan trend, which require drill-testing. New detailed ground EM surveys along the prospective basal contacts will commence soon, and should provide additional targets to follow-up. Recently completed reconnaissance RC drilling in and around the Taipan discovery (4.1m @ 3.8% Ni, 2.45% Cu. 0.08% Co and 3.11g/t Pt+Pd+Rh+Au from 104.4m) continues to intercept prospective ultramafic rocks with assays pending. Drilling is ongoing.
Highly prospective nickel acreage; Development ready - Buy
The recent grant of the Nova mining lease was a key milestone for the project development, with the remaining permitting approvals (EPA, mining proposal, construction and other permits) expected late 2014. Project debt financing discussions are well advanced, and subject to full approvals construction should commence in early 2015, if not sooner. The project remains the best undeveloped nickel sulphide project globally, targeting first ore in Q2 CY2016.
Our SIR NAV remains unchanged at $3.94/s. We maintain our Buy recommendation with a price target of $4.60/s.
SIR Price at posting:
$3.88 Sentiment: Buy Disclosure: Held
