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Sunrise Resources PLC

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A significant commercial opportunity for Sunrise Resources


“…Despite its modest size Sunrise has succeeded in bringing a pozzolan-perlite prospect to the verge of production on a project spend so far of less than £1.5m…”


Sunrise Resources (AIM:SRES) is positioned to establish itself as a primary supplier of pozzolan and perlite to California’s construction market, materials sourced from naturally occurring volcanic ash and pumice that offer the promise of a new ‘green concrete’ with a much lower carbon footprint than the industry standard Portland cement.

The company’s flagship asset is its wholly-owned CS Natural Pozzolan-Perlite Project in Nevada, which covers a lunar landscape spiked by outcrops formed by significant deposits of the materials extending some 150 feet below the surface. Preparations are well advanced for a drilling campaign: drill holes and trenches have been completed and extensive analysis of a range of samples has confirmed their commercial quality. SRES’s internal tests using a 20pc substitution of ordinary Portland cement with natural pozzolan have demonstrated mortar strength well beyond regulatory requirements. The company has published a 27-year mine plan that includes a four-phase pit design targeting production of 14.5 million tons of pozzolan, starting at rate of 100,000 tons per year rising to 500,000, and 1.3 million tons of perlite starting at an annual 20,000 tons rising to 100,000.

Last year SRES acquired a second natural pozzolan project, at Hazen, also in Nevada. This is at an earlier stage than the CS Project, with the extent of the deposit yet to be defined, but a permit has been obtained from regulators for a 500 ton bulk sample for commercial scale testing. Though the company’s focus is on pozzolan, SRES also wants to market its perlite, a low density glassy volcanic raw material suitable for household and industrial applications, including garden pots that aid water retention and aeration, insulation and fireproofing, paint texturing, plaster and concrete fillers, and industrial cryogenic storage vessels. There are longer-term plans for a stand-alone perlite plant where both coarse and fine grades of perlite are directed to perlite specific applications.

The pozzolan/perlite opportunity


Everything is finely poised then: SRES just needs to secure a buyer to allow production to proceed. The commercial opportunity is significant. In presenting pozzolan and perlite as a concrete mix the company is seeking to reacquaint the construction industry with its ancient heritage. Pozzolan was used extensively by the Romans and mixed with lime to construct the infrastructure of the classical world, its durability evidenced by the roads, ports, viaducts, bridges, temples and monuments we still admire today. It was only displaced by Portland cement, a compound of limestone, chalk, clay and shale, in the early 1900s.

But its potential as a building material has resurfaced as the world puzzles how to green a construction sector that produces prodigious amounts of concrete, second only to water as the most used substance on Earth. Some 14 billion cubic metres of concrete were poured globally in 2020, a number forecast to increase to an annual 20 billion cubic metres by 2050 under pressure of continuing urbanisation and population growth. As one colourful Financial Times article puts it, in the time it takes you to read this sentence the global building industry will have poured more than 19,000 bathtubs of concrete. And unfortunately the cement clinker making process pumps vast amounts of CO2 directly into the atmosphere.

SRES says pozzolan blended cements are cleaner and stronger. The mix reduces the carbon embodied in cements, increases production per ton of cement clinker capacity, and ensures more robust structures. Whereas structures made with natural pozzolan have survived for millennia, many made with Portland are susceptible to ‘concrete cancer’ caused by the reaction of the cement’s alkalis with silica, which causes the concrete to expand and crack.

Demand for pozzolan is being driven by changing dynamics in the US concrete market, as well as wider environmental considerations. Until the past few years it was supplied primarily as a by-product of coal-fired power stations, notably fly ash. But that source has been closing over the past decade as North American coal-fired power plants have shut down in response to tougher environmental regulations and competition from cheaper renewables and natural gas. Since 2010 half of the US’s coal-fired power stations have been scheduled for closure. SRES is on location to address a particularly acute cut in the supply of fly ash on the west coast caused by the closure of the region’s largest coal-fired power station in Arizona, which has taken an annual 500,000 tons production of high-quality fly ash off the market.

The company is also seeking to take advantage of political momentum towards greener concrete. The Biden administration’s $1.2 trillion Infrastructure Investment and Jobs Act requires – by the President’s Executive Order – that the funds should be used to build ‘infrastructure that is resilient and that helps combat the crisis of climate change’. In California, SRES’s key market, a carbon cap-and-trade scheme introduced last year sets the state’s cement industry the target of achieving net-zero emissions by 2045. And a road map to carbon neutrality published last year by the US Portland Cement Association recommends pozzolan be used for a higher proportion of cement mixes. 

Trends in the US health market are also opening fresh opportunities for perlite producers. The material is a particularly effective medium for the cultivation of cannabis, a market rapidly growing in North America – and beyond – as the plant is legalised. The global legal cannabis market was worth more than $12bn in 2018 and is projected to grow at a compound annual rate of 26.7pc. The US Geological Survey science agency estimates there was an 8pc rise in US consumption in 2019, an increase sustained through 2020 due to new cannabis legislation, and higher demand for horticultural products during lockdown.

Continued discussions


SRES came close to securing a major customer last year during prolonged negotiations with a cement and ready-mix company encompassing a joint bulk sampling, test milling and concrete pouring programme. The talks concluded after the company shifted focus following organisational changes. Perlite trials were undertaken with another prospective client, and customer trials for horticultural grade perlite were successfully completed to ensure it is calibrated to the right grade for prospective clients. The company continues to evaluate the potential of its perlite for both horticultural and industrial use.

SRES has been engaged in discussions with several prospective customers this year, including two cement and ready-mix companies, a major fly-ash distributor, a large building materials company, and a cement clean-tech new start. Executive Chairman Patrick Cheetham says SRES is seeing ‘an upsurge of interest in natural pozzolan, not just from the traditional cement and concrete companies, but also from the building materials companies that supply to those companies, as well as new generation clean-tech cement companies developing new types of carbon-neutral cements and concretes using natural pozzolans in their formulations.’

The company’s efforts to target Californian markets received a major boost in June when the CS Projects pozzolan was conditionally approved by the California Department of Transport, responsible for the award of public infrastructure construction projects across the state. The approval not only gives SRES access to future public projects but is an important mark of quality considered by private customers. 

In addition to working to bring the CS Project to production, SRES is divesting and farming-out a legacy portfolio of drill-ready precious and base metal projects. Earlier this summer SRES granted an Option to Purchase its wholly owned Pioche Sepiolite Project in Nevada to Tosla, the world’s largest producer of Sepiolite. Pursuant to a Binding Heads of Agreement SRES has granted Tolsa an exclusive six month option to buy the Project for $1.25m. SRES would retain a 3pc net revenue royalty for a 25-year period from the commencement of commercial production. The agreement follows ‘encouraging results of test work’ carried out by Tolsa in Spain following a preliminary field visit to the Pioche Project in December 2021. Sepiolite is a non-swelling, lightweight, porous hydrous magnesium silicate clay with an unusual crystal shape that accentuates its internal porosity and gives it a light weight. The largest market globally for sepiolite is for use in light-weight non-clumping pet litters. It is also used extensively in agriculture as a slow-release absorbent and adsorbent carrier for chemicals and pesticides and in animal feeds as a binder and carrier for nutrients and growth promoter. SRES says ‘there is a large market that can be targeted in North America that is currently served by alternative clays or imported sepiolite.’

SRES has undertaken modest exploration work on other holdings to confirm their value. In May the company reported ‘high grade assay results’ from sampling and mapping at surface at its Myrtle Gold-Silver Project, also in Nevada, where it holds 20 mining claims at the location of the historic Myrtle Mine. An ‘intrusive related gold-silver-base metal system is suspected’, samples having returned values of up to 142 g/t gold (4.1 ounces/ton) from narrow in-situ quartz veins and up to 9.7 g/t from quartz veins.

SRES has reported drilling results from its 100pc owned Clayton Silver-Gold Project that have confirmed the presence of significant silver mineralisation with ‘a number of interested parties … currently reviewing data with a view to partnering with the Company in the further exploration of the project.’ In June the company reported high-grade gold assay results from a drill programme at the Baker’s Gold Project in the Murchison Goldfield of Western Australia. The five holes drilled included intercepts of a 2m grading 14.4 g/t gold from 64m downhole, and a 2m grading 11.5 g/t gold from 64m downhole.

Last month SRES raised £100,000 for ‘general working capital’. Mr Cheetham said: ‘The AIM Market is extraordinarily difficult for junior companies at present so, in making this placing, we have sought to strike a balance between the need for working capital and shareholder dilution.’ The company’s most recent interims, for the six months ended 31 March 2022, stated a group loss of £153,323 (31 March 2021: £185,955), cash of £183,923, and further investments worth £49,553.



As previous TMS coverage has noted SRES has a clear strategy to serve a well defined market, offering building materials that will become ever more important as the global economy faces up to the challenge of greening one of its most carbon intensive sectors. The company is positioned to take advantage of the particular conditions that apply in the western US construction sector, where fly ash supplies are under pressure. SRES’s share price has suffered with the rest of the market, turning down to around 0.11p at the time of writing, from the 0.2p to 0.25p range it moved between last year, taking its market cap to £4.14m.

Despite its modest size the company has succeeded in bringing a pozzolan-perlite prospect to the verge of production on a project spend so far of less than £1.5m. The construction sector is under severe pressure to change its ways to meet tough net-zero targets. The Californian government is on board. SRES holds one of the few fully permitted and undeveloped natural pozzolan deposits on the west coast. If the company can secure that – so far – elusive commercial contract, the prospects for Sunrise Resources look bright.

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