I've been waiting a week for someone else to write this post but...

I've been waiting a week for someone else to write this post but I got tired of waiting and decided to stop my usual lurking.

If you look at some of the SIR presentations you'll see a reference to Voisey's Bay in Canada. The geological setting and host rocks at VB are very similar to Nova-Bollinger and the deposit style is the same - a magmatic Ni-Cu deposit. PGE's are low at N-B in contrast to silimilar deposits in China and Russia and the Ag-Co credits are just "noise" so we won't worry about them.

There are a number of sub-deposits at VB but the most valuable is a feature known as the "Ovoid". The Ovoid is approximately 600 x 350 x 100 m for 32 Mt at 2.83% Ni and 1.68% Cu. Ignoring Nova, could you hide an Ovoid-type deposit in the Bollinger gravity feature? Certainly there have already been some 100 m intersections. At $15K/t for Ni and $7k/t for Cu (below current market prices, allowing for smelter charges?) the Ovoid is 3.61% Ni equivalent for A$541/t in-situ (at $50/g for Au thats equivalent to 10.8 g/t to put it in simple terms).

Now, SIR don't necessarily have an Ovoid yet but based on what we know so far it's far more likely than not that they will end up with something similar. If I had to guess I'd say they will end up with more tonnes but at a slightly lower grade but thats just guessing at this stage using the drilling, EM and gravity over N-B.

Whats it worth if it's an equivalent to the Ovoid?
-Say $600M to build it (more than $400M, less than $800M) as a starting guess.
-Use $3.0/lb production costs = $238/t (which is probably high). To put it another way, the laterite Ni producers will be all shut in well before this goes under water.
-Overall effective tax rate of say 40% (company tax, royalties etc).
-Assume current cash of $60M + options of $60M gives all the cash to get to BFS for a fully diluted capital of 272M shares.
-Another 50M shares issued at $5, $400 M borrowed (the banks are "queing up").

Roughly: $541-$238 * 32M = $9.70B - $0.5B to banks
* 0.6 net to mine owners * 0.7 to Sirius = $3.86 B / 332 M shares = A$11.6 / 2 for safety factor and NPV allowance = $5.8/share. So, I can see the cvurrent market value and it depends on how good you think the exploration potential is as to the upside.

Too many variables at this stage to spreadsheet it. Once we get a JORC resource for Nova (end of the month) we'll have a better idea. There WILL be a mine at N-B (barring red, green or black tape disasters), time will tell how big and valuable to shareholders it will be. With the current rig activity it's likely we'll have an answer on Bollinger by the end of the FY.

No doubt, I'll have many nay-sayers but I'll learn something from the (constructive!) feedback.