Sirius has 70% of the Fraser Range JV and Mark Creasy 30%, with Mark Creasy free carried to completion of a BFS. Nova is located ~30km from the main sealed road west to Norseman and then to the port of Esperance.

Nova lies in the NE/SW striking Fraser Range volcanic complex, with an aeromag signature representing an elliptic shaped dome, layered igneous complex or deformed intrusion with a ~5km to 6m long axis that has a width of ~2km (depending on whether it is a layered igneous complex boat or Kambalda / Widgiemooltha shaped dome).

The nickel mineralisation appears to be a modified mafic intrusive associated magmatic sulphide deposit, and the host rock has been described as a hypersthene-augite-garnet-hornblende-labradorite-quartz gneiss interpreted to represent a strongly metamorphosed mafic-ultramafic precursor of predominantly gabbroic composition.

In contrast, Kambalda and Widgiemooltha orebodies typically have a komatiite basalt floor and ultramafic hangingwall, average grades are typically about 2.5%Ni, but can occasionally be high in the 20%Ni region with millerite (which is not present at Nova).

The Sirius mineralisation apparently resembles that from the NE/SW striking Thompson nickel belt complex in Canada, which has been estimated to have a total resource (including production) of ~ 120mt to 150mt @ 2.1% to 2.4%Ni, 0.1% to 0.2%Cu and 0.04% to 0.05%Co (depending on the reference looked at). We have not seen Thompson-type nickel ore but according to available information there appears to be a number of similarities.

The nickel sulphide mineralisation at Thompson has been described as massive, semi-massive, matrix and stringers composed of pyrrhotite-pentlandite with minor chalcopyrite, and brecciation including clasts of wall-rocks, with 6 stages of folding along an ~6km length to a depth of at least 1500m, in a gneiss with quartz, garnets and feldspar. It apparently has some boudinage (sausage-like) features plus ultramafic blocks and deformed pillow basalts.

There were apparently 8 main deposits in the Thompson Nickel belt of which the largest was Thompson with a strike length of ~6km.

However, while there are similarities, at this stage, based on the drill core we viewed in the Sirius booth at Mines and Money Australia that was held in Sydney on 17 October 2012, the Nova core "sounds" and possibly looks visually better than Thompson ore as shown in Figure 1, with crystalline garnet (with pentlandite inclusions) contained in a major pentlandite / minor pyrrhotite sulphide. The nickel mineralisation at Nova, so far,  appears to be in the pentlandite, not in the pyrrhotite.

There are also garnets in the gneiss-quartz host rock, and the chalcopyrite has an association with silver. There is cobalt, but no arsenic, no magnetite, no violarite, and no MgO issues, if anything it is relatively clean of impurities and so far, and apparently no signs of ultramafic. The orebody may be folded based on some of the sections.

Initial indications from drill intersections through the Nova nickel mineralisation reflect disseminated (possibly averaging ~0.9%Ni & 0.7%Cu), then net or stringer /breccia (~1.6%Ni & 0.7% to 0.8%Cu) passing into matrix mineralisation (possibly closer to 3% to 5%Ni), then massive (~5% to 7.5%Ni, with the Ni/Cu mineralisation being about a combined 7.5% or 8%, as in 7.5%Ni & 0.5%Cu, or 3.5%Ni & 4%Cu), on top of a quartz-gneiss floor with garnets as shown in Figure 1.

Cobalt grades have typically been ~ 0.1% to 0.5%Co, and may average an ~30:1 ratio with nickel, (eg 5%Ni has [0.5/30] or 0.016%Co). Copper grades may average an ~2 to 3 ratio to 1 with nickel (eg 5%Ni has 1.7% to 2.5%Cu, or 1.6%Ni has 0.5% to 0.8%Cu).

Brecciation is mainly along the edges / ends and includes clasts (pieces) of wall rocks and clasts of stringer mineralisation inferring more than one flow / activity. At this stage the first EM conductor (Conductor 1) appears to resemble a possibly ~250m wide channel that has been defined / based on EM (electro-mag) plates. The mineable width depends on the cut-off grade and how much of the disseminated ore is taken, as it appears that it could to be up to 70m thick in total, of which the massive could be up to ~12m thick and the total high grade possibly ~35m thick.

Sirius have stated that they have defined mineralisation 500m down plunge, 200m wide with ~35m thick high grade ore averaging ~3.5%Ni. Assuming an average SG of 3.5x, theoretically that becomes 200m x 35m x 1m x 3.5 or ~25,000t per metre of plunge, so for 500m, that becomes ~12mt of ore or ~420,000tNi (at 3.5%).

However, looking at the sections, the first 100m appears to be thinner, possibly only 10m to 13m thick, so the average could be 200m @ 10m  plus 100m @ 35m, or the first 300m could averages 27m thick or closer to 20,000t per metre of plunge. Applying that reduction over 300m is still a reasonably healthy 6mt of nickel ore, which @ 3.5%Ni becomes 210,000tNi contained for which SIR's 70% would be ~ 147,000tNi. Being ultra-conservative this could be reduced by a further 20%, so SIR's share would then be 120,000tNi. It should also be recognised that Nova has material copper and cobalt credits too.

To place those figures into context, using recent presentations, Independence (IGO) has 1.3mt of resources @ 5.9%Ni for ~77,000tNi contained which includes a reserve of 1.12mt @ 3.7%Ni for 42,000tNi contained. Mincor (MCR) has total resources of 3.8mt @ 3.7% Ni for ~145,000tNi, but not all of that is mineable (Miitel [the main resource] being 1.04mt @ 3.4%Ni for ~35,000tNi). Panoramic (PAN) has a resource at Savannah of 5.3mt @ 1.5%Ni for ~81,000tNi contained, plus Lanfranchi (ignoring the low grade deposits) at about 2.3mt @ 3.1%Ni for ~67,000tNi contained. Sirius' Nova nickel mine should be lower cost than the Kambalda operations, especially as it would have its own concentrator, own recoveries and own selling arrangements.

Western Areas' (WSA) ore resources as per their annual report released on 10 October 2012 are Flying Fox 1.93mt @ 5.9%Ni for ~110,000tNi contained, plus Spotted Quoll ~3mt @ 5.8%Ni for ~175,000tNi contained.

So at this stage SIR's attributable share on an ultra conservative basis appears to be larger than WSA's Flying Fox, and depending on what assumptions are made, Nova may already exceed WSA's combined resources from Flying Fox and Spotted Quoll.

Just how big the Nova mineralisation / orebody (ies) can become is open to interpretation as by mid-Oct 2012, it was still only ~3 months since its discovery, with possible parallel shoots / channels, possibly even deeper parallel channels with EM Conductor 4 being an EM plate ~150m wide 275m down plunge to the SW, possibly deeper into the footwall. RC drilling of Conductor 4 had already started in mid-October 2012.

With the mineralisation apparently starting at 50m below surface, and increasing to materially thicker widths with grade at ~200m down from surface, access to the mine would possibly be by a box-cut and decline taking what ore can be mined on the way down, probably mining using low cost sub-level open-stopes.

Treatment should be conventional flotation producing a high grade sought after concentrate. Some parts of the scoping study have already started with initial flotation testwork to be completed by the end of November 2012, flowing into systematic variability flotation and comminution testwork.

Sirius expects to have drilled its other EM conductors being the 400m long No 2 Conductor and its No 3 Conductor during the first half of 2013, so there should be a string of reported intersections during the coming year, from initial drilling and subsequent infill.

Sirius' current cash at its mid-October presentation was ~$14m with a forecast spend of $6m to the end of December 2012, and expected cash from options if exercised (17.8m @ 60c by Dec 2012 being $10.7m) resulting in cash at the start of 2013 of $19m which should be enough to achieve the maiden resource at the end of June 2013 and be well into the scoping study possibly by the end of December 2013.

As the discoveries of DeGrussa and Nova have shown, Australia is not well-picked over and contains mineralisation that can be completely different to anything currently being mined in Australia. Both discoveries were made by exploration companies at the end of their campaigns when they had little savings in the bank. The question has to be : what may be discovered next ?

Disclosure and Disclaimer : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with Taylor Collison Ltd.

Figure 1. Nickel Mineralisation at Sirius' new Nova Discovery in WA