Sirius lowers Nova costs by $30m

Sirius Resources has chopped $30 million off the cost of developing its Nova nickel project after getting final prices from contractors, including Barminco, which started work at the remote site east of Norseman this week.

Sirius announced today that it had identified $30 million worth of cost savings on the original definitive feasibility study estimates for Nova, using firm costings based on contracts let and tenders received to date.

It revised the capital estimate for Nova to $443 million, including a $22 million contingency.

The company said the equipment for the construction of an aerodrome and access roads at Nova, for which RJ Vincent was named the preferred tenderer in November, was being mobilised to the site and work would start during the week.

Sirius also said tenders had closed for an engineering, procurement and construction contract for the processing plant, with the preferred tenderer to be announced in March.

Managing director Mark Bennett said it was satisfying to have started mining at Nova yesterday, exactly two and half years since the announcement of its discovery.

“We have started the project on time, on plan and significantly within original capex budget estimates,” he said.

“It is also pleasing to continue involving local stakeholders such as the traditional owners and local pastoralists in the venture.”

Meanwhile, Barminco yesterday began providing excavation of a boxcut at Nova, under a contract worth $129 million over three years, with an option to extend by a further year.

Barminco will also provide underground mining services once excavation is completed.

Construction will begin in April and will create up to 130 jobs.

Barminco was also awarded a $5 million contract to construct and supply a batch plant at Nova, which will take about two months to construct from its February start.

“We are delighted to have won these contracts with Sirius to develop the world-class Nova deposit and look forward to delivering safe and efficient outcomes for Sirius,” Barminco chief executive Peter Stokes said.

Barminco was named the preferred tenderer for the excavation and underground mining contract in November, alongside Kerman Contracting, which began work on its $23 million job to build accommodation facilities at Nova two weeks ago.

Watpac Civil & Mining was also nominated as the preferred tenderer to build a tailings storage facility at Nova in November.

Shares in Sirius were 2.8 per cent lower at $2.70 per share at 12:15pm.