Stellar Resources has released details of a recently completed Pre-Feasibility Study (PFS) of its Heemskirk mine project near Zeehan, Tasmania. A 600,000 tpy operation is expected to produce some 4,300 tpy of tin-in-concentrate and cover capital costs in 3.7 years, based on a consensus forecast tin price of US$25,500/tonne and exchange rate of Au$/US$ 0.9.
Based on the current resource of 6.28 M tonnes at 1.14% Sn, a mine life of 6.75 years is calculated, but Stellar believes that there is significant potential to extend this by further drilling around and below the four orebodies – Upper and Lower Queen Hill, Severn and Montana. All orebodies are open laterally and at depth and the Lower Severn resource, currently excluded from the mining plan, could be added later if further exploration improves the likely ore grade there.
CEO Peter Blight said “Completion of the PFS is a significant milestone for the Heemskirk Tin Project. It demonstrates technical and financial viability using consensus tin price and exchange rate assumptions. Mine gate cash production costs of US$14,389/t are competitive and capital costs of US$114 million benefit from ready access to existing infrastructure. Importantly, multiple ore sources provide significant flexibility and have allowed a focus on grade (head grade 1.06% tin) to maximise net present value. Following the 3.7 year payback period, and given all mineralised zones are open at depth, a focus on mine life could see an extension well beyond the initial 7 years.”
Estimated mine cash operating costs are Au$98.3/tonne of ore, based on contractor mining, but could be reduced by a move to owner operation with a mine life in excess of 8 years. The company will also look at reducing capex by the possible use of other suitable processing plants in the area. Stellar is committed to producing a Definitive Feasibility Study “as soon as possible”.
