Sirius Resources to raise $44 million for exploration

Strong performer Sirius Resources has confirmed it will raise $44 million in a placement priced at $2 a share.

The West reported Sirius would issue 22 million new shares to institutional clients, representing 11.5 per cent of its issued capital.

This round of capital raising will put $60 million in the company’s cash reserves and eliminate debt.

Managing director Mark Bennett said the funds will add value to the company without high levels of financial risk and enable increased exploration around the company’s Nova nickel-copper deposit located near Balladonia in Western Australia.

"We are now fully funded for the entire resource definition and feasibility process through to a potential future project financing decision," he said.

Following the announcement Sirius shares which have already performed well this year closed up four cents at $2.21.

Last month Grant Thornton’s national head of corporate finance Paul Gooley spoke about opportunities for junior mining and exploration companies in the Australian market and used Sirius Resources as a prime example.

He said at the time that the Australian based nickel and copper miner were down to their last drilling exercises funding would allow when they managed to hit a large nickel seam. Subsequently their shares rose 4500 per cent in two months from .6 cents in July to peak at $3 a share, valuing the company at more than $600 million.

“You need to keep focusing on your core, you need to keep exploring, you need to be true to your strategy, because that’s why everyone’s in this game it’s about hitting that big seam and despite the issues if you remain core to your strategies there are opportunities," Gooley said.

With an abundance of opportunity competition for capital is on the rise, forcing junior mining companies to look into private placement and alternative funding solutions both locally and internationally as well as taking extensive cash preservation measures and entering into joint ventures or considering take-overs.

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