When the blokes from Sirius Resources sit down with Karl Simich in coming weeks, they'll be talking to one of the few people on Earth who can truly understand what's been going through their minds lately.
Life has changed pretty quickly for those involved with Sirius after last month's discovery of one of the most exciting mineral deposits in Australia since Simich's company Sandfire unearthed a major copper find in 2009.
"I'm actually meeting with the guys from Sirius in the not too distant future," Simich says. "They have called so we would love to catch up and have a chat."
Simich says the rendezvous is not related to any budding corporate relationship between Sirius and Sandfire but is merely a social meeting between two sets of explorers who appear to have found their pot at the end of the rainbow. "We will have a chat, share the experience and maybe share what has happened to us. We would be very happy to do that because we are in a bit of a brotherhood here," Simich says.
The companies were the stars of the Diggers and Dealers conference in Kalgoorlie last week, and their tales gave a timely reminder to the market that if you want to get rich, there are few more lucrative lotteries than the junior mining scene.
A month ago, the Sirius managing director, Mark Bennett, had given up on hopes of attending Diggers when a spare bed could not be found anywhere in Kalgoorlie. "We didn't have a ticket or a room, we couldn't get a look in. But that all changed very quickly," he says.
Late last month, Sirius's share price soared 679 per cent on the back of a single drill hole that intercepted nickel and copper in Western Australia's Fraser Range. Early signs suggest the nickel mineralisation is a type that has not been previously found in Australia, and where it has been seen before – Canada – it has occurred in very large deposits.
That single-day rise from just under 6¢ to 45¢ was not the end of the adventure: the stock continued rising as more drill holes were released, and Sirius shares were testing $1.16 this week.
That means investors in Sirius (mining personality Mark Creasy is the major shareholder) have watched their stakes increase 20-fold in less than a month.
Before he knew it, Bennett was being escorted around Diggers and Dealers by Perth broking firm Hartleys. There was no time to set up a booth or secure a speaking slot, but Bennett and the box of rock chips he carried around became the rock stars of the conference.
"You bring the shiny stuff out and it certainly brings a smile to people's faces," Bennett says, moments after a passer-by asked for permission to souvenir one of his rock chips.
It was just reward for a man who was working the drill with his own hands when Sirius hit paydirt.
"It was a do-or-die drill hole. It was literally our last three holes we were planning to do for the foreseeable future," he says. Since the strike it has raised $7.6million from investors to develop the deposit, which has been named Nova. More drilling is planned.
Bennett has made big discoveries before: he was named prospector of the year in 2003 for his work with LionOre, and he is well aware that finding a deposit is just one step in the journey to monetising a resource.
But he need look no further than Simich for a reminder that it is possible to take an asset through the murky world of financing and development and into production. In 2009, Sandfire Resources was a 4¢ stock. By November that year, the shares were worth $4 after a stunning copper find in the West Australian outback. This year they have regularly tested $8.
Fast-talking Simich now stands atop a billion dollar company, which boasts not only a high-grade copper deposit but a major open-cut mine, a decline shaft, its own airstrip and an on-site copper concentrator worth hundreds of millions. Sandfire exported its first copper ore just months ago and Simich's graduation to the upper echelons of the mining industry was complete when he was adorned with the Digger of the Year Award at Kalgoorlie.
Simich says he has watched the Sirius story with interest and has noticed the similarities to his own experience. "It's quite interesting because our discovery occurred around the time of the financial crisis, so it was similar circumstances [in terms of market mood]," he says. "It's an interesting and challenging time, you feel like you are sitting in a washing machine or tumble drier because things are happening.”
Sandfire's progress has been so rapid that Simich now talks about his company's “next phase” of growth, which could include acquisitions and expansion into new commodities. He speaks of turning Sandfire into a "mining house" but stresses those ambitions are not the motivation for his rendezvous with the Sirius crew. "We are not predatorial," he says.
But what the leaders of Sandfire and Sirius might discuss is the importance of exploration in these tough economic times.
With pools of finance contracting, exploration is now a dirty word at many cost-conscious miners. Ivanhoe Australia – a company that built its culture around an aggressive approach to exploration – said last month it would cut exploration spending by $15million, or close to 25 per cent. Other miners fear that certain tax breaks on exploration could be lost amid the government's review of the corporate tax rate.
Scores of junior explorers have less than a year's cash on their books, and Bennett laments that genuine explorers are becoming as thin on the ground as the minerals they search for.
"It used to be that the bigger mining houses used to go out and do this real exploration, but they stopped and the juniors took over," he says. "Now there's no money available to the juniors to be effective so there are only a few companies out there doing this sort of exploration."
Hartleys' corporate finance manager, Ben Crossing, says the success of Sirius will hopefully breathe some enthusiasm into the small end of the mining sector. “What it does show is that the junior resources sector can deliver outstanding returns on exploration success, and this has been a real reminder of that,” he says.
If they hadn't been convinced by Sandfire, Sirius or even May's stunning arrival of graphite explorer Syrah Resources, investors were this week given another reminder of the incredible gains that can be made overnight in the exploration game. Shares in minnow Sabre Resources soared from 10¢ to 36¢ in a day, after the company reported an encouraging copper result in Namibia.
Simich says it takes a special person to conduct and invest in exploration, but such people are the type the nation needs. "We love the success but 99.9 per cent of the time we're out there dealing with failure, and you need to be someone who can deal with that," he says. "You've got to hold the line and stick with it ... but the impact you can have is phenomenal."