sir holders read this:500m core per day

Nova ripples into a moneymaking machineFriday, 2 November 2012
Brooke Showers

EASILY pulling the biggest crowd at the Mining 2012 Resources Convention this week, Sirius Resources is charging towards revealing an indicated resource at its Nova discovery in the first half of next year, while its share price this morning reached a new high.

Sirius managing director Mark Bennett said the company had come a long way since its inception and in particular in the past five months.

Three years ago, Sirius was in a similar position to many juniors attending the Brisbane-based resources convention, with less than $A1 million in the bank and a share price of 5c.

“We went for a roll of the dice and drilled this target that seemed too good to be true, which turned out to be true,” Bennett told delegates in the packed auditorium this morning.

“We had the choice to hibernate but that’s not we are about, investors want explorers exploring.

“We drilled our last three holes for the year to test this target and the first one hit it.”

Follow-up drilling results have since encouraged many options holders to exercise options, which led to exploration at the Nova ground becoming a self-funded exercise.

In the three months subsequent to Nova being discovered in July, Sirius drilled 70 holes and deployed five drill rigs producing 500m of core per day, following the deposit northwest.

More drill hits and assays from Nova released this morning continue to confirm the grade and width of mineralisation.

Drilling intersected 21.2m of stinger and vein sulphides from 365.2m, 3.3m of massive sulphides from 235.8m, 35.2 m at 3.09% nickel, 1.06% copper and 0.1% cobalt from 395m and 15.4m at 4.6% nickel, 2.19% copper and 0.15% cobalt from 395m.

Another line returned 7.4m of mainly massive sulphide from 402m.

“As we moved north, it got bigger and now it’s 300m and 35m thick,” Bennett said.

Bennett likened the nickel sulphide thickness at Nova to the equivalent of a 12-storey building, which explains why investors have raced to the Sirius table.

There are 190 million shares on issue at the moment, which is changing weekly due to the exercise of options.

The company’s market capitalisation has gone from $6 million to $260 million in three months.

As of the end of September, Sirius had $17 million on hand and is expecting a further $6 million in option conversions, of which the same amount will be spent on further drilling.

In December, Sirius will have $18 million in the bank to start infill drilling and to take Nova towards an indicated JORC resource in the first half of next year.

“We are already confident this will be a mine,” Bennett said.

“The tonnes per vertical metre are immense and the shape is very amenable to high tonnes per vertical metre, rapid mining and rapid cash flow and a lot of nickel per vertical metre of capital development.

“This thing is a moneymaking machine.”

After defining a maiden resource, Sirius is aiming to complete a feasibility study by the end of 2013 and metallurgical testwork was already underway.

“The sulphides are very course-grained, which means it’s amenable to crushing and grinding easily and floating easily,” Bennett said.

“Because the rocks have been cooked up in the ground as well, all of the nickel that would otherwise be not recoverable has formed totally separate crystals, so the amount of nickel we are able to liberate should be very high.”

There are another four targets on the tenements Sirius holds in joint venture with its major shareholder and renowned prospector Mark Creasy.

Bennett, a geologist with 25 years experience, also flagged the possibilities of further discoveries at Fraser Range after Christmas.

Shares in Sirius jumped 11% to $3.15 in morning trade, a fresh all-time high and above $3 for the first time.