ASX-listed Stellar Resources has published details of a new scoping study on the Heemskirk deposit near Zeehan, Tasmania, in which it currently has a 60% holding with Gippsland Limited. The project, scheduled for a 2014 start-up, could produce some 3,900 tpy of contained tin over a 7.6 year mine life, although the company believes there is considerable potential to extend this through further exploration drilling. Pre-production capital expenditure of US$108 million is required to bring the project into operation.
Independent mining consultancy Mining One completed a detailed study of mine development, ore scheduling and processing at Heemskirk. The scoping study concluded that a 600,000 tpy operation producing 3,900 tpy of tin-in-concentrate provides an attractive return on investment of 21% at a long term tin price and exchange rate of US$25,000/tonne and A$/US$1.00 respectively. The project is also well positioned on the industry cost curve, with cash costs of US$12,780/tonne. This result underpins Stellar’s confidence in the project and takes Heemskirk Tin forward into the pre-feasibility stage which is expected to take nine months.
The combined JORC indicated and inferred resource at the Queen Hill, Montana and Severn deposits is 4.36 million tonnes at an average grade of 1.1% tin. Part of the Queen Hill deposit can be mined by open cut, with the remainder exploited by underground mechanised cut and fill mining.
In a statement Stellar CEO Peter Blight said, “The scoping study highlights the importance of Heemskirk’s high grade in providing a competitive cost structure for an underground tin mine. This also underpins a positive economic outcome on a stand-alone operation. Stellar’s aim now is to bulletproof the project by adding significantly to the resource estimate and fully investigating the potential for by-product lead and silver production.”
