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Sunrise Resources about to enter transformational period, as mining permit set to be granted

Sunrise is set to turn its CS pozzolan-perlite project to good account

Sunrise Resources PLC - Sunrise Resources about to enter transformational period, as mining permit set to be granted

It looks like being a significant few weeks for Sunrise Resources PLC (LON:SRES), according to executive chairman Patrick Cheetham.

The company has been focused for some time on working up the CS pozzolan-perlite deposit in Nevada, and it looks like the granting of a mining permit is now imminent.

That development could mark the beginning of a significant re-rating for Sunrise, as a market that’s on the whole unfamiliar with pozzolan starts to see tangible evidence of a potential return.

“Pozzolan is used for making the cement in concrete,” explains Cheetham.

Indeed, it actually improves both the strength and the resistance of concrete long-term, when compared with the standard Portland cement that is usually used.

And perlite, meanwhile, is used paint texturing, plaster, concrete fillers, and increasingly in horticulture where it has an application in the burgeoning cannabis industry. Both pozzolan and perlite are in demand in the south-western US, where the energy balance favours lower intensity production of cement, although the market is somewhat opaque.

“It’s really going to be dependent on off-take agreements,” says Cheetham, “and we’re working on those as we speak.”

Because, of course, the granting of the mining licence is going to make the project seem that much more tangible to potential off-takers too, and is likely to act as a major catalyst in that process.

The plan, says Cheetham, is to use mobile production equipment with a low price tag to get the project up and running fairly quickly.

“The pozzolan is a loose material at the surface, with no overburden.”

The mining, if you can even call it that, is therefore a straightforward enough proposition, and with the permit in place and off-take deals pending, the likelihood now is the market will suddenly wake up to the imminent transformation that’s about to take place at Sunrise.

In the meantime, though, the intriguing proposition that the company might be able to advance or transact on its precious metals properties, also located in Nevada, adds a little extra spice.

Nevada is famously one of the best jurisdictions in the world to go mining in, and gold is arguably the mining industry’s banner commodity. It’s also been on a tear in recent months, hitting multi-year high in US dollar terms, and all-time record prices in other currencies.

“We’ve got together some drill-ready gold projects in Sunrise,” says Cheetham, “and we’ve put them into a subsidiary called Westgold. These projects are literally drill-ready. One is a Carlin-style gold project, one is epithermal silver.”

The focus, says Cheetham, remains on the industrial minerals, at least for now. But he raises the intriguing point that industrial minerals can be very cash generative, if done right, and so in turn, and down the line there could be money coming in to Sunrise, which in turn could be used to make something of the precious metals portfolio.

The company is currently capitalized at around £4.5mln, so the market is attributing at least some value to CS and the gold and silver, since the company has largely been run on a shoe-string, and Cheetham has been reluctant to raise money recently.

But with the pending newsflow and the current positivity in the gold sector, there’s plenty of near-term upside to look forward to.

Watch this space for news on the permitting, and for an acceleration of momentum in the second half of the year.

Quick facts: Sunrise Resources PLC

Price: 0.272 GBX

AIM:SRES
Market: AIM
Market Cap: £10.02 m
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Sunrise Resources chairman hails mine permit for CS perlite-pozzolan project

Sunrise Resources PLC's (LON:SRES) Patrick Cheetham speaks to Proactive's Polly Middlehurst soon after securing a mine permit for the CS perlite-pozzolan project in Nevada, USA. The development means the project can move into the trial mining stage, along with advancing detailed engineering...

on 30/7/20

3 min read