Sirius Resources has so far delineated an ~325kt nickel resource at its Nova Ni-Cu Project ~150km ENE of Norseman in WA, and expects to complete a scoping study by the end of SQ2013. Assuming (ERA estimates) that the BFS can be completed by SQ2014, along with regulatory approvals, mining could start followed by ~15 months of plant construction (to end 2015), with production ramping up in 2016.

Based on the recently completed 1.3mtpa to 1.5mtpa Sandfire DeGrussa operation for ~$400m at similar exchange rates, capex could be ~$400m to $450m (ERA estimates) for a probable 1.2mtpa to 1.5mtpa operation at Nova. At ~1.2mtpa the Nova Project may produce >25,000tpaNi and >10,000tpaCu at total cash costs of ~<$1.00/lbNi (applying the payable copper and cobalt revenue as a by-product).

The combined Nova-Bollinger resource of ~14.6mt @ 2.2%Ni complies with the new JORC 2012 reporting standard (that requires resources to be economically mineable) and hence the resource to reserve conversion could be relatively high at ~85% to 95% or ~13mt (which over an 8 to 12 year life = ~1.2mtpa to 1.5mtpa).

The current Nova-Bollinger resource occupies a relatively small footprint of ~700m x 350m in the ~4km long x 2km wide "eye" layered complex, and appears to be too small if it was the cause of the "eye", inferring that there may be extensions. There are a number of drill ready targets within the "eye": NW, SE, SW and NE of Nova.

Conceptually, Sirius' Nova Project can be compared to Western Areas' Flying Fox Project of ~190ktNi reserves @~4%Ni, and a life of ~8years at 25ktpaNi, with cash costs ~2.75/lbNi, and a market cap on ~200m shares of ~$640m (plus ~$190m net debt as at 31 Dec 2012), except that SIR is expected to have simpler lower unit cost mining & high by-product credits, with resulting materially lower cash costs.