Sandfire Resources broke all sorts of records when it brought its Degrussa copper-gold mine in Western Australia into production in February, less than three years after the deposit’s discovery.
Now fellow high-profile exploration success story Sirius Resources is setting its sights on emulating those feats.
Sirius yesterday closed out a $44 million equity raising through its corporate adviser, Perth broker Hartleys. It apparently could have taken several times over that amount if required. The raising has lifted the company’s cash reserves to more than $60 million, about half of which will be used on scoping and feasibility studies on the Nova nickel-copper discovery it announced in July.
Sirius is yet to announce a maiden resource for Nova, which is in WA’s south, but that is expected by the end of March. The company will then hop straight into a fairly comprehensive scoping study that will set the frame of reference for a bankable feasibility study. The pre-feasibility stage will be skipped altogether.
Sirius’s aim will be to wind up the study by the end of next year, at which time it will make a final investment decision on the project. “It’s reasonably ambitious but it’s the sort of project that hopefully lends itself to fairly easy decision-making,” chief executive Mark Bennett says.
Based solely on Nova and not including other deposits that might be found in the area, the company envisages having to build a 1?million tonne-a-year plant, which is a similar scale to what Sandfire has at Degrussa.
Using the Sandfire comparison, it is reasonable to assume that Sirius will be looking for around $400 million to develop the operation.
Veteran prospector and BRW Rich 200 member Mark Creasy is Sirius’s largest shareholder: after the completion of the placement, he holds about 21 per cent of the company. He also owns a 30 per cent stake in the Fraser Range joint venture, which contains Nova.
The balance of Sirius’s cash reserves is to be spent on drilling other targets within the structure known as “The Eye” on the Fraser Range. The company currently has five diamond drill rigs on site at Nova and adjacent targets.
SIR Price at posting:
$2.21 Sentiment: ST Buy Disclosure: Held
