Shares digital

In the midst of a reverse takeover, junior resources group Sirius Exploration (SXX:AIM) has less than four weeks to publish its new admission document or it will be thrown off Aim. The listing rules require any company whose shares are suspended, as with Sirius, to resolve the matter that has paused trading within six months or the listing is cancelled.

Sirius has been trying to finalise the acquisition of Njahili Resources since September 2007. It is currently marketing to investors to raise £2 million to £6 million.

If the deal proceeds, the enlarged group will be called Xanadu Resources. It will seek to bring two projects into production by early 2009. These should provide a small income to fund initial development of Bagla Hill, an estimated 800 million-tonne iron ore deposit, which could be the company’s flagship project.

The site is near the border of Sierra Leone and Liberia. Sirius claims Bagla Hill is on the same geological trend as the Western Cluster, an area mined in Liberia since the 1930s. Chinese and Indian resource groups are bidding for licences in the Sierra Leone part of the Western Cluster, which hasn’t been mined before.

Chairman Richard Poulden claims that Bagla Hill is comparable in size to Cape Lambert’s (CLIO:AIM) iron ore project in Australia, in the process of being sold for around £190 million to Chinese conglomerate, China Metallurgical Group. He said Bagla Hill would need a joint venture partner and ‘a couple of hundred million dollars’ to get into production.

Initial funding could come from a tailings deposit in Sierra Leone called ‘No. 12’, a former diamond operation interrupted in the early 1980s by political problems in the country. Njahili has found fine gold and gold nuggets on site and recently paid $150,000 for a larger processing plant than an existing facility. It hopes to make $5 million profit over the three to four-year mine life.

Also in Sierra Leone is the Wara Wara project, averaging 0.8 grams per tonne gold, where it plans to start hand-mining. Commercial production is targeted within two years.

None of its projects have Jorc-compliant resource estimates, the Western standard used to calculate the size and content of deposits. It needs a minimum £2 million for priority exploration work and £6 million to bring No.12 and Wara Wara into production.

Less immediate projects include Chetham, a gold and tantalite target, with ore contiguous with Cluff Gold’s (CLF:AIM) deposit in Sierra Leone, Poulden claims.