Sirius Resources (SIR) shares dipped in yesterday’s sell-off, despite confirming it remains on track to open its new low cost nickel mine in Western Australia late in 2016.
The shares were 1.7% lower at the close at $2.90.
In its March quarterly report, Sirius said that of the $38 million it spent during the period, $30 million was spent on developing the Nova mine in West Australia, development of which started in late January.
Sirius plans to lift spending for the current quarter to around $80 million, with $68 million earmarked for work at Nova.
The miner said the expected $443 million target for spending on the project “remains firm”.
Sirius lowered the expected development cost of the project from $473 million earlier this year after it secured competitive rates with contractors.
Discussions for selling half of the planned nickel concentrate production and all of the planned production of copper concentrate are at an “advanced stage”, Sirius said.
During the period, Sirius signed a three year off-take deal for the other half of the nickel concentrate production with BHP Billiton’s (BHP) Nickel West mine.
Sirius says Nova is still expected to commence production in late 2016.
SIR 5Y – Superstar Sirius on track at Nova
Sirius will fund the mine’s development with an initial cash injection of $150 million and $440 million in available debt funding.
The miner had $210 million in cash holdings as of March 30.
Sirius had said Nova is expected to be one of the lowest-cost nickel mines in the world, with an all-in sustaining cash cost of $US2.09 a pound.
World nickel prices have fallen this year to around $US6 a pound, off some 11%.
In exploration, Sirius confirmed that it has some new interesting prospects, including one for gold.
"Exploration continued during the March quarter with aircore drilling of the Baloo and Monsoon gold prospects at Polar Bear, diamond drilling beneath Baloo, diamond drilling of the Crux and Centauri nickel prospects within the Fraser Range Joint Venture as well as identification and testing of an EM conductor at Lake Harris.
"Results received during the quarter confirmed Baloo to be a significant new gold prospect, extending at depth into fresh rock as well as confirming the presence of high grade gold mineralisation at Monsoon. At Lake Harris (Fraser Range), drill testing of an EM conductor identified a conductive body of pyrrhotite and graphite,” directors said.
