THE WEST AUSTRALIAN
Friday, 09 November 2012 08:35
Sirius Resources' dream run has come to a screeching halt, with almost 20 per cent of the company's value being wiped out yesterday after investors fanned fears its Nova discovery may not be as big as first thought.
The Perth based company, which has been one the best performing stocks on the ASX this year, dropped 61¢, or 18.65 per cent, to $2.66 after a drilling update from its Nova nickel-copper discovery, north-east of Norseman.
The company has been drilling around the periphery of the Nova deposit to define its limits. Sirius said yesterday electromagnetic surveying did not define a continuation of the Nova deposit where it had expected.
Brokers close to the stock suggested the news may have scared away "blue sky" money associated with the Nova discovery, which has helped push Sirius shares beyond $3.20 this month, up from 5.7¢ at the end of July.
However, it is understood five key holes along an area at the discovery hold the key to the width of Nova.
The company said further drilling results were expected in coming weeks.
Analysts had been spruiking the area as a potential nickel province, with a number of companies jumping on board and buying tenements close to Nova.
Sirius' nearology partners copped the brunt of the investor backlash yesterday, with Paul Poli-backed Matsa Resources one of the hardest hit, dropping 15 per cent.
Matsa, which has its Symons Hill project 6km south of Nova, jumped from 12¢ in July up to 50¢ this month after Sirius announced its Nova discovery.
Other companies with tenements nearby also suffered significant falls yesterday. Buxton Resources - which has its Widowmaker project 22km from Nova - shed 6¢, or 9.7 per cent, to 56¢.
Sheffield Resources slid 3.5¢ to 56¢ and Ram Resources which recently picked up ground near Nova for as much as $18.2 million, shed 25 per cent of its value to end at 0.3¢. Black Fire Minerals ended 0.1¢ lower at 3.9¢.
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