Sirius share price surge continues in wake of drilling results
Shares in market darling Sirius Resources have been tipped to continue climbing as the nickel explorer's market capitalisation touched $1 billion for the first time on Monday.
Another round of encouraging drill results extended Sirius' 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 mineralisation more than 100 metres south of last month's Bollinger discovery sent 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 most 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 in July 2012.
Both RBC Capital Markets and Patersons Securities insisted that the best was yet to come for Sirius, with RBC saying the stock could climb to $5 in the immediate future, while Patersons said there was 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 over recent years, with low nickel prices ensuring that even big companies like BHP Billiton are struggling to make money out of nickel.
The optimism surrounding Sirius lies in the fact the nickel has been found in geological formations that look set to deliver multiple clusters of high-grade nickel.
RBC analyst Geoff Breen said between Sirius's two main discoveries - the "Nova" and "Bollinger" deposits, there was undoubtedly enough to warrant a mine.
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