I have updated an investor reference sheet while we wait for an exciting 2012 to unfold! ...
SRSR – Sarissa Resources – Investor reference sheet
Overview
- A mid-stage junior exploration company with a world class project and confident, capable management
- There are risks but huge potential which gets more compelling the more you learn
- Flagship Project: Nemegosenda, the largest Niobium deposit on the continent, at least 2nd largest globally; a financing deal with a “motivated” Asian group, details pending
- Gold Project: a gold prospect, increasing in size in Shining Tree, the hottest area in Ontario after being off limits to mining for 25 years, two holes drilled, promising
- Management: capable veteran guiding the company for maximum shareholder value
- Spinouts/uplisting for both projects announced, approved by shareholders Oct 2011
- Engaged top NY investment bank as advisors to move projects forward in most shareholder-friendly manner
- Doing it right is taking precedence over doing it quick
Risks
- Pink sheet penny stock for the moment
- A CTO (Cease Trade Order) issued by British Columbia June 2010 still in effect
- (Note: this is currently a US company)
- Over 800M shares outstanding
- Ran to .209 July 2009 on NI report, fell back to mostly the .02-.05 range
- 2009 NI report was retracted due to CTO
- Audited financials on NioStar but not SRSR yet (unaudited issued every quarter)
- Volume has fallen but usually good liquidity
- A potential large short position
- Potential investors don’t understand niobium as quickly as gold or silver
- Death of former highly respected qualified geologist Alan Hawke in 2009 (replaced by perfectly capable Warren Hawkins)
- Potentially fragile world economy and prospects for niobium
- Without funding this project could languish indefinitely
Scott Keevil, CEO
- Mining background in Indonesia and Canada, third generation in mining industry
- Father is chairman of Teck Resources, one of largest mining conglomerates on planet
- Grandfather originally explored Nemegosenda back in the 1950’s
- Widely believed to be independently creating a resource company like his father
- With minimal dilution he has been accomplished a great deal, he inherited 725M shares, currently 829M in over 3.5 years
- Showing he is capable of developing this project in prudent, shareholder value maximizing manner
- Accepted only shares for his first 2 years as CEO
- Has an incredible complete experienced team of advisors around him
Others on the team
- Cam Cheriton, Ph.D. – qualified geologist, Director, 50 years exceptional experience
- Warren Hawkins, P.Eng. – current qualified geologist
- Alan Hawke, dec. – instrumental in the first 2 years in developing this project
- Robert Yeates – over 40 years experience in mining, mining equipment, and rare earths
- Tim Petersen – extensive managerial experience in environmental, technology, resource and public service sectors; brother of former Premier of Ontario
- Dahlman Rose – a top New York private investment bank with a special focus on resources and logistics and worldwide operations
- Merle Goertz – a seasoned, capable IR guy, he can’t and won’t divulge confidential developments and he won’t hold your hand if you know little about mining, he otherwise handles this important role admirably
Nemegosenda Niobium Project (Nio-Star)
- Scott acquired January 2008 after becoming Sarissa CEO in December 2007
- 68 holes drilled in the 1950’s so Niobium resource is well known in Hawke and SouthEast Zone 1, was quantified at 20M tons from that effort
- Since those core samples lost by today’s investor protection resource estimation standards (NI 43-101), must re-drill to claim
- Sarissa has drilled at least 15 holes that have confirmed and extended the resource
- Now reporting a 13.9 km circumference “donut” of potential niobium mineralization
- At least 50M tons suggested in just Hawke and SE 1 zones
- With SE 2 and Lake zones, could well be 200M tons and more
- Announced Asian financing deal imminent, and tentative plans for Hong Kong listing
- Development work occurring towards those ends behind the scenes per releases
- Metallurgical studies already confirm processes that economically extract 80%-90% of the niobium, compared to less than 70% for other niobium projects.
- A 580-foot adit at lake level was also developed in the 1950’s and is still intact
- The deposit is close enough to surface to avail itself to open pit methods
- Some quantification of rare earth mineralization has already been reported, and may provide an estimated 20%-40% “kicker” to revenues
What is Niobium?
- 90% used in steel making
- It makes the steel stronger, lighter, more flexible, while more heat / corrosion resistant
- North American market is more saturated with moderate growth prospects
- Asian market has greater potential, as lower proportion of steel is using niobium, and the percentage where used is lower than in North America
- Still huge potential in auto industry
- Also has various and slowly growing other commercial uses
- Market expected to grow at least 10% over the next several years
- Market price approximately $20 per pound
- Rare earths are red hot due to high tech, battery sectors and China’s near monopoly on supply
Shining Tree Gold Project
- Hot new area for gold exploration projects in Ontario after being unavailable for 25 years
- First prospect 1200 acres
- A promising prospect with 2 veins crossing on the property
- 2 holes drilled have provided encouraging results
- Two land purchases in 2011 increased holdings to 3000 Ha (7413 acres)
- Other companies exploring in the area including Creso, Platinex, Goldeye, Temex, and Golden Harp/Mineral Mountain
- More speculative project but if it pays off it pays off big
- A spinout of 35:1 has been announced, as well as uplisting to a Canadian exchange and expected in the first quarter of 2012
The “Math”
- At 5000 tons processed per day, $300M revenue annually, ~ $.36 EPS
- (At 10,000 tons per day, $600M revenue annually, ~ $.72 EPS)
- At PE range of 6X-10X, target share price $2.16 - $3.60
- Rare Earths could add 20% - 40% to these numbers
- (10,000 tpd, PE 10, with 30% REE kicker = $9.36 target price)
- 200M ton resource at 5K tpd equates to a 111 year mine life (55 years at 10K tpd)
Current Affairs
- The Shining Tree spinout dividend payment date is still pending
- NI geology report on both projects are likely pending
- Field development on both projects is expected to continue
- Potential for a short squeeze on the spinout transaction
- Nio-Star is in the advanced stages of securing significant funding
- Potential for a similar spinout/uplist for Nio-Star
- The subsidiary company was recently renamed Nio-Star Corp in further anticipation of these developments
- Updated scoping/pre-feasibility study anticipated in 2012
- Full, bankable feasibility study expected in perhaps 12-18 months
For more information:
Company website: http://www.sarissaresources.com/
Independent Technical Report, October 5, 2010 (68 pages, enter code and wait for document):
http://www.sedar.com/GetFile.do?lang=EN&docClass=24&issuerNo=00030522&fileName=/csfsprod/data111/filings/01642723/00000001/C%3A%5CSEDAR%5CFILINGS%5CNI43101TechnicalreportOct5.pdf
Technical Report, July 12, 2010 (57 pages, Warren Hawkins): http://www.geologyontario.mndmf.gov.on.ca/mndmfiles/afri/data/imaging/20000004564//20006720.pdf
Independent Technical Report, Shining Tree, June 30, 2011:
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B7qjX5srbuoQOTY2NTFmMDQtNGJkZC00YmU4LTk4MWEtNzBjNDM0ZDAxYjUy&hl=en&pli=1
Investor Relations Contact:
Merle Goertz
Phone: 1-604-688-2349
Email: merleg@shaw.ca
Silicon Investor message board for Sarissa: http://www.siliconinvestor.com/subject.aspx?subjectid=57481 |
