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Sunrise Resources plc (‘SRES’) is a British-led diversified mineral exploration and development specialist.
Sunrise Resources: Setting the foundations of a cash generative mining businessJuly 04 2012, 3:30pm
An assessment of the Derryginagh mine is currently underway. And if the findings are positive Sunrise chief Patrick Cheetham says production could be in place within a relatively short time.
“We believe this project offers a fast track to production,” he told Proactive Investors.
Derryginagh, in county Cork, will produce an industrial mineral called barite (or to be more accurate barium sulphate).
It is typically used as a weighting agent in drilling muds in the oil and gas industry, but given its quality the Derryginagh barite could be sold as a premium product to paint manufacturers.
This premium product can fetch around £200 a tonne, much more than standard mud-grade barite products which can be bought as cheaply as £100 a tonne.
Derryginagh would be a relatively low tonnage operation however it could be greatly rewarding for the company, which is currently valued in the market at just £2.37 million.
While not being drawn on the sums used in the ongoing study Cheetham says Sunrise has in the past talked of production in the region of 50,000 tonnes a year. That could be worth at least £10 million a year to Sunrise, based on an estimated £200/tonne premium ‘white’ barite price.
The scoping study is expected by the end of next quarter and after that Sunrise can make an investment decision.
“We are looking for a practical approach in the scoping study. And based on previous findings we expect a positive result.
“We are hoping to learn the likely optimal production rates, what reserves we’ll need to establish, what sort of time frame we can expect for permitting a project like this.”
Importantly the scoping study will give an indication of how much the mine will cost to build.
A success at Derryginagh will be a boon for investors. Sunrise shares have fallen over 80 per cent since disappointing drill results led the withdrawal from a possible gold mine development in Canada.
Meanwhile Sunrise is also hoping to make progress with a number of diamond assets in Australia that had previously belonged to the De Beers diamond dynasty.
A drilling programme is planned for the coming months, once an archaeological survey has cleared the area for drilling.
“We know that De Beers had found kimberlites in this area. We located those kimberlites and the drill holes – De Beers described them as ‘highly diamondiferous’.
“Our objective now is to re-drill and obtain reasonable size samples so that we can do an evaluation of potential diamond grades and quality.”