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UPDATE 2-Sirius Exploration buys Australian potash permits
Fri Oct 23, 2009 6:58am EDT

http://www.reuters.com/article/marketsNews/idAFBNG51232920091023?rpc=44

* Sirius to buy Derby Salt for 13 mln stg in stock

* To issue 100 mln new shares to Derby shareholders

* Sirius shares rise as much as 11.6 pct (Recasts, adds details)

Oct 23 (Reuters) - Sirius Exploration Plc (SXX.L), a diversified mining and exploration holding company, said it bought an Australian firm holding salt and potash permits for 13 million pounds ($21.60 million) in stock, sending its shares up as much as 11.6 percent.

Last week, Sirius had agreed to buy Australia's Adavale, which holds mineral exploration permits in Queensland, in a share deal worth 19.5 million pounds [ID:nLF523060] .

Sirius, which focuses on North America and Australia, on Friday said Perth-based private firm Derby Salt Pty Ltd holds mineral leases of more than 125,000 hectares in the Kimberley region of Western Australia.

The leases allow for the exploration and extraction of salt and potash, an essential mineral needed for plant growth, and the creation of caverns for the storage of natural gas or potentially carbon dioxide.

Sirius said Derby Salt's shareholders, the Catlow Family Trust, have accepted 100 million new Sirius Exploration shares at 13 pence per share.

The new shares represent 16.65 percent of Sirius's enlarged issued share capital, the company said.

Sirius said the acquisition gave it a subsidiary which had major potential to establish a conventional salt and potash mining operation.

"We believe that the demand for potash, salt and energy storage will increase worldwide and the acquisition of Derby Salt in Western Australia will complement our similar activities in North Dakota and Queensland," Sirius Chairman Richard Poulden said in a statement.

In September, Sirius had agreed to buy AusPotash Corp, a Canadian company which develops mineral properties, for up to 13.4 million pounds.

According to a forecast in September, demand for potash is expected to rebound gradually in China, North America and Brazil in the coming months as economic conditions improve and the crop nutrient's price stabilises at more affordable levels. [ID:nN21196055]

Sirius shares were up 2.3 percent at 11 pence at 1057 GMT on Friday on the London Stock Exchange. They touched a high of 11.6 pence earlier in the session. ($1=.6018 Pound) (Reporting by Kumar Alagappan in Bangalore; Editing by Vinu Pilakkott)