Onwards and upwards as minnow's market cap tops $1b

Shares in Sirius Resources are tipped to continue climbing as the nickel explorer's market capitalisation reached $1 billion for the first time on Monday.

Another round of encouraging drill results extended Sirius's amazing eight-month rally and appeared to support theories that a series of discoveries were part of one large geological system in Western Australia's Fraser Range.

News that Sirius had confirmed there were minerals more than 100 metres south of last month's Bollinger discovery sent its shares racing by almost 20 per cent in early trading as investors considered a much bigger deposit than first thought.

An afternoon bout of profit-taking saw the stock finish the day only 5 per cent higher at $4.40; a fairly modest result for a company that has more than doubled in value over the past fortnight.

But the day was notable for being the first time Sirius's market capitalisation has passed - albeit temporarily - $1 billion; an amazing feat for a stock that was worth barely $12 million last July.

Both RBC Capital Markets and Patersons Securities insisted the best was yet to come for Sirius, with RBC saying the stock could climb to $5 in the immediate future, and Patersons predicting a longer-term "potential value" of more than $10 per share.

The market's enthusiasm for Sirius comes despite nickel being regarded as a laggard commodity with low prices ensuring that even big companies like BHP Billiton struggle to make money out of nickel. The optimism surrounding Sirius lies in the fact that nickel has been found in geological formations that are atypical for Australia, and are likely to deliver multiple clusters of high-grade nickel that will be economic and efficient for mining.

RBC analyst Geoff Breen said between Sirius' two main discoveries - the Nova and Bollinger deposits - there was undoubtedly enough to warrant a mine.