Sirius share price surge continues in wake of drilling results
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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Sirius Resources' share price jumped because new drilling results extended its eight-month rally and showed confirmed nickel mineralisation more than 100 metres south of the recent Bollinger discovery, suggesting a much bigger deposit and attracting investor interest in the nickel explorer.
The company confirmed nickel mineralisation more than 100 metres south of last month’s Bollinger discovery, which supports the idea that multiple discoveries in the area may be part of one larger geological system in Western Australia’s Fraser Range.
Sirius' market capitalisation briefly passed $1 billion for the first time, a notable milestone that reflects strong investor enthusiasm. For everyday investors it signals market confidence in the size and potential of Sirius’ nickel discoveries, but it doesn’t guarantee future returns.
RBC Capital Markets suggested the stock could climb to about $5 in the near term, while Patersons Securities indicated a longer-term potential value of more than $10 per share—both optimistic views based on the recent discoveries.
Shares initially jumped almost 20% in early trading on the news, but after profit-taking they finished the day about 5% higher at $4.40.
Investors are optimistic because the nickel has been found in geological formations likely to deliver multiple clusters of high‑grade nickel. That prospect of large, high‑grade deposits can outweigh short‑term low nickel prices in terms of company valuation and future mine potential.
The article highlights the Nova and Bollinger discoveries in the Fraser Range. RBC analyst Geoff Breen said the combined size of those two main discoveries could be enough to justify a mine, which is why they matter to investors and the company’s outlook.
The company had more than doubled in value over the past fortnight and had climbed from being worth around $12 million in July 2012 to surpassing a $1 billion market capitalisation temporarily after the recent rally.
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