2025 is a critically important year for SPR due to the start of UG drilling. The 65km UG drilling is as a major drill program. For a 600m depth from surface the drilling is only about 300m ie UG drilling gets them much more bang. Instead of 65km it's equivalent to more like 100km from surface. (maybe more). I have not analysed the sums but it is probably more than the total drilling than what they have completed at NN, Pepper,4P and Freak in the last 2 years maybe closer up to 1.5 times(ie they completed 66km to 100km in last 2 years excluding SF and other drilling).
That leads to speculation about how much the resource may increase - let's assume 50% is in-fill drilling which may lead to an increase in MRE of 300k Oz. An increase in resources to at least 4m Oz seems highly likely in 2025. if WW or Freak or another deposits produces high grade like NN then 5m Oz this year is a possibility. Nick stated to me in December 24 that 5m Oz is a given and Imo it may happen this year.
I will not be surprised to see a reserve of over 3m Oz by end of 2025 maybe even 3.5m Oz if the drilling is as successful as the past 2 years.
I have not believed a major miner would look at buying SPR unless it had at least an MRE of 5m Oz with potential for a lot more. Majors are only interested in tier 1 deposits with good economics and tier 1 is a minimum of 5m Oz). Even 5 M Oz may not tempt a major.
I sense that RMS has at most 6 months to make and complete a bid for RMS otherwise they will lose out to a major overseas miner if the 5m + oz looks like being a reality. They may even have less than 6 months if the drill results in the next 3 months (we will have lots of results from WW, 4P, Freak) are like the previous 2 years in which case the SPR SP is likely to head towards $2 or over $2,5b (assuming no change in POG). If the assay results are very good in the next few months RMS may see competition earlier for SPR sooner than they realise and we believe.
If the assay results are very good in the next few months and a resource of 5m Oz looks realistic then a TO SP bid of $2.5 or higher will not surprise - if the SP gets to say $1.70 and stays there then a bid approaching $2.5 may be needed especially if POG keeps going up.
The assay results in the next few months from UG are key to what happens to the SPR SP and any TO bid. Maybe I am being too optimistic. But I hope I will end up being closer to being right than wrong.
SPR does not need to see assay grades of 8-10g/t from extensional drilling as even 4g/t may be good enough to get close to 5m Oz by end of 2025.
SPR Price at posting:
$1.39 Sentiment: Buy Disclosure: Held
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