Sunrise Resources PLC (LON:SRES) saw its shares rise on Tuesday after the firm revealed it has completed commercial trials on bulk samples taken from the CS pozzolan-perlite project in Nevada.
Two tons of raw perlite have been successfully expanded in a commercial production furnace to produce horticultural grade perlite suitable for the cannabis industry.
READ: Sunrise Resources focused on pozzolan/perlite development plans
And 100 tons of pozzolan has been ground in a commercial scale production mill and tested positive for compliance with industry standards for natural pozzolan.
Sunrise has now also completed its initial three phase, 15-year mine plan for the CS project.
Demand for natural pozzolan is expected to increase as fly ash shortages continue to build, while demand for horticultural grade perlite is being stimulated by increasing legalisation of cannabis.
"I am delighted to be announcing the successful completion of commercial-scale trials on bulk samples of both the pozzolan and perlite from our CS project,” said Sunrise chairman Patrick Cheetham.
“These pave the way for commercial arrangements with the parties involved and tests are also in progress with other potential customers. It is a good time to be entering these markets. Cement companies and fly ash suppliers are already grappling with a shortage of fly ash and this shortage will be intensified when the largest supplier to western markets, the large coal-fired Navajo power station in Arizona, closes, as expected in 2019.
"Meanwhile, the perlite market in the western US continues to be strong as more US States, and now Canada, continue the legalisation of cannabis for which perlite provides an ideal growing medium," Cheetham added.
In early afternoon trading, Sunrise shares were 13.8% higher at 0.17p.
In a note to clients, analysts at ‘house’ broker Northland Capital commented: “The successful completion of commercial-scale trials on bulk samples of both the pozzolan and perlite from Sunrise's CS Project paves the way for commercial arrangements with the parties involved, while tests are also is underway with other potential customers.”
They added: “In anticipation of meeting strong demand for its output, Sunrise continues to advance its plant design and mine permitting.”
-- Adds share price, analyst comment --