We recently highlighted there is a 30% probability the Sirius share price could double in the next 2 months given the high likelihood the large conductor sitting below the existing Nova / Bollinger deposit containing i.e.
- this conductor sits in the same source rocks as Nova / Bollinger
- scarcity of other conductive rocks improves likelihood of EM signatures identifying massive sulphide mineralisation
- the conductor is down plunge from Nova and Bollinger i.e. logical spot for neighbouring deposit
- the conductor has been verified by 3 identical responses with same signature, twice from the Samson DPEM in 2 separate locations and once from DHEM from drill hole SFRD0204
Given the above, the conductor can only realistically be 1 of 3 things: 1) graphite, 2) barren sulphide or 3) the jackpot – mineralised sulphide. If it is mineralized sulphide the value of this deposit could be more
This large conductor is 600m x 350m, so almost identical to the size of the Nova / Bollinger conductor 1000m x 220m that most analysts now value at around $3.50 per share.
Other catalyst
The other major catalyst could be around the sale of BHP’s Nickel West. Nickel West produces 6% of the worlds Nickel, but following the closure of its Perserverance mine in 2013, there is an increased requirement for 3rd party ore (Nickel West already has offtake agreements with IGO, PAN, MCR and WSA – of which all but WSA expire in 2019). Sirius with the highest quality concentrate in Australia becomes a very strategic asset for Nickel West as it allows the ability to blend lower quality product (Nickel West mining operations produce concentrate below the target Iron to Magnesia ratio for the Kalgoorlie smelter) and optimize smelting.
News yesterday of Noble, Glencore, Trafigura are amongst 20 interested parties in discussions with WSA for its nickel offtake agreement, highlights the strategic importance of the large scale, high grade, low cost asset Sirius is sitting on.
With SIR trading 40-50c above the NPV of Nova/Bollinger, the market clearly isn’t paying much for all this optionality you are getting at the moment.
SIR remains 1 and only mid cap resource recommendation currently.