By Gavin Wendt. Courtesy of Minelife:
One of our favourite Watch-list stocks since the inception of our MineLife report has been Sirius Resources (ASX:SIR, Share Price : $2.55, Market Cap: $574m). We first covered Sirius during January 2011 when the stock was trading at just $0.30 and we maintained our coverage as the stock fell below $0.10. The price surge is clearly visible in the price chart below.
During July 2012 Sirius announced the discovery of the Nova deposit and since then the company has delineated a JORC-compliant Resource of 14.6Mt @ 2.2% Ni, 0.9% Cu and 0.08% Co (implying a 2.5% NiEq grade), which includes the adjoining Bollinger deposit.
This week Sirius released the Scoping Study fro Nova-Bollinger, which uses a mining inventory of 13.9Mt @ 2.0% Ni and 0.82% Cu and bulk underground mining. The proposed 1.5Mtpa plant is expected to generate saleable nickel and copper concentrates over a mine life of 10 years.
Forecast C1 cash costs (after credits, but before payabilities) are A$1.75/lb Ni in concentrate, placing Sirius in the lowest 20% for nickel producers globally. Normalising for potential payabilities, C1 cash costs are ~A$2.40/lb Ni, and after state royalties and sustaining capex total cash costs are ~ A$3.10/lb. The capex required for the production of first concentrate is A$471m and sustaining capex is A104m.