Opportunities abound for market standout Sirius Resources following Nova find.
Opportunities abound for market standout Sirius Resources following Nova find.
ON Friday July 20, Sirius Resources managing director Mark Bennett and two others started final drilling on a patch of land they’d been exploring just outside of Norseman.
It was Mark Creasy country, being explored under a Creasy-Sirius Resources 70-30 joint venture. A veteran prospector, Mr Creasy also owns nearly 26 per cent of Sirius through his investment vehicle, Yandal Investments.
The drill hole was the final one budgeted for that particular prospect – a location the team had been working on for 12 months.
While exploration up to that point had returned indications of a promising nickel discovery, the team was prepared to walk away and start afresh if no significant mineralisation was found in the final hole.
“Everything looked so good that we didn’t want to let ourselves believe that it was real ... we had actually saved that drill hole for last,” Mr Bennett (pictured) told WA Business News during an interview in the company’s Balcatta offices.
With its shares at about 5 cents apiece and $1 million in the bank, Sirius was considering how to go about raising capital to fund future exploration projects in a tight equity market.
By 7pm, however, the drill hole had reached 181 metres, and signs of mineralisation appeared in the last metre.
“At that point it got too dark to carry on ... we spent that Friday night pondering our future because this was the do-or-die hole,” Mr Bennett says.
“Even though we’d found pretty well what we were supposed to, I didn’t want to let myself believe that was it, because it only happens one in a thousand times.”
What the explorers found as drilling continued the next day has been described as potentially one of the best nickel and copper sulphide discoveries seen in Western Australia.
The company entered a trading halt, rushed samples through the lab – which confirmed the discovery – and lodged an announcement about the new ‘Nova’ mineralisation with the ASX the following Thursday.
In a single day, Sirius’ share price shot up by nearly 700 per cent to a peak of 47 cents. But that was only the beginning; shares now sit around $2.15 each.
“It’s been a whirlwind ever since,” Mr Bennett says. “I’m surviving on about four hours’ sleep a night, caffeine and adrenaline.
“Eight weeks ago there was just me and two guys and we’d get about two phone calls a week – and they were generally people trying to sell us something.
“After the discovery, every time I answered a call, when I put the phone down there were two more messages.”
The involvement of one of the country’s most renowned prospectors has undoubtedly helped Sirius with its discovery, as it was Mr Creasy who initially mapped out the land where Nova was discovered.
But Mr Bennett says Sirius Resources’ traditional exploration techniques also played a role, and points to the rock samples that lie on tables, in cabinets and lined along shelves in the company’s office.
“You’ll see a lot of rocks in here,” Mr Bennett says. “That’s not like a lot of other companies – and it’s because we actually go out and look for the rocks.
“The reason we found it is because we were willing to get out of the car and walk eight kilometres into the bush.”
The company has also been a standout performer in that it has been able to raise $7.6 million through a placement and $9 million through the exercise of unlisted options. The company has issued 30 million options with an exercise price of 60 cents. So far only about one third of those have been exercised.
That leaves Sirius with the likely potential of bringing in an additional $14 million before the end of the year.
While still early days, Mr Bennett says he’d like to see a maiden resource defined next year, and a decision on whether to proceed with the project made and financing considerations under way in 2014.
He’s also confident that Sirius will be involved in full development of the project and taking it in to production – as Mr Bennett did with LionOre’s Thunderbox gold mine.
Mr Bennett believes small companies can often be more adept at developing these kinds of resources than some of the larger players.
“A lot of big stuff that happens in big companies just distract what they’re there for,” Mr Bennett says.
“Things like bureaucracy, inertia ... and when you have departments there are always silos; people can be focused on getting a promotion and getting one over on the guy next to you rather than all pulling together.”
The activity and attention Sirius has gained is in stark contrast to other nickel-focused companies, which are scaling back amid falling commodity prices.
The price of nickel has dropped 23 per cent since the beginning of the year. But while that’s a negative for those already in production, Mr Bennett says it’s yet more good news for Sirius.
“The perfect time to find something is when the price is low; it gives you time to get things ready so when the price does come up again you’ll be there to catch the wave.”
