Sirius Sees Europe Holding Base Metal ‘Sleeping Giants’

Updated on

Finland and Sweden are shaping up as a new exploration frontier for mining companies, as they widen their global hunt for metals from nickel to gold, according to Sirius Resources NL.

A lack of exploration around existing mines in the two nations and a natural endowment of metals mark them out as a key target, Sirius Chief Executive Officer Mark Bennett said in an interview. His work as a geologist led to the uncovering in Australia of three major metal deposits since 1999.

Anglo American Plc and Western Areas Ltd. are among miners already scouring the region for base metals deposits. Bennett will lead a new exploration company to be formed in a spinoff when Independence Group NL completes a takeover of Sirius, valued in May at A$1.8 billion ($1.3 billion). Both companies are based in Perth.

“Finland and Sweden are both really well endowed with gold, nickel, copper and zinc deposits,” Bennett said Monday in an interview in Kalgoorlie, Western Australia. “That’s our sleeping giant, if you like.”

Bennett discovered the Thunderbox gold mine in 1999, the Waterloo nickel asset in 2002 and the Nova nickel and copper project in 2012. He likened Sweden and Finland to Western Australia about 30 years ago, before the most recent wave of exploration.

“There are some really big, world class mines there, and there’s been virtually no exploration around them,” he said at the Diggers & Dealers conference.

Global Spend

Global exploration spending fell 28 percent to $9.8 billion in 2014, compared to a year earlier, as producers cut costs amid tumbling commodity prices, according to Melbourne-based MinEx Consulting, while smaller explorers face more difficulty in gaining access to funding.

London-based Anglo is developing the Sakatti copper, nickel and platinum project in Finland, 150 kilometers (93 miles) north of the Arctic Circle. Western Areas Ltd., a Perth-based nickel producer, controls an exploration company searching for copper to nickel in Finland, according to filings.

’’There’s potential for high-grade deposits,’’ said Dan Lougher, CEO of Western Areas, who visited Finland in May.

‘Great Country’

“It’s a great country with good infrastructure and it loves mining, there’s a story starting to emerge there,” Lougher said Tuesday in an interview in Kalgoorlie. “We’re interested in any metal that’ll make money.”

Under the Sirius spinoff plan, the newly formed S2 Resources Ltd. will include exploration projects in Sweden and Finland held currently by Sirius. Reconnaissance exploration beginning this year will seek to identify targets there by the end of 2016 to undertake more comprehensive drilling, Bennett said.

S2 Resources could seek to acquire additional exploration projects, Bennett said. “We will be in a position where we have got cash,” he said. “Some companies will have decent projects or assets and be in distressed situations and prone to doing deals.”