Stellar Resources Limited (ASX: SRZ), based out of Melbourne, explores for mineral properties in Tasmania and South Australia. Its key interest lies in identifying tin, copper, gold, and uranium deposits.
Stellar has a strong tenement position covering its 100% owned tin properties including its flagship asset, the Heemskirk Tin project located in northwest Tasmania, St Dizier Open Pit Tin project satellite deposit located 20km NW of Zeehan, the Razorback Tin project and a large exploration licence package with multiple tin exploration targets and historical metal mines.
On April 26th, 2019, the company released its report for the quarter ended March 31st, 2019 when it re-focussed entirely on progressing Heemskirk Fast Start in 2019 to rapidly advance the project towards production. The company engaged technical consultant Resource and Exploration Geology to complete an update of the mineral resource estimates for the project which is expected to be completed in May 2019.
Going forward, Stellar plans to undertake a Scoping Study around the June 2019 quarter on a Fast Start development option for Heemskirk based primarily on the Queen Hill and Severn mineral resources. It will also incorporate the recently completed mining lease and scoping study for St Dizier Open Pit Tin project, which includes a base case NPV of 10%, at current tin prices (USD 20,000/t), determined to an accuracy of ±35%, of approximately AUD 10.4 million, an IRR of approximately 166% and a payback period of approximately eight months. Moreover, the project has a low capital investment estimated at AUD 3.8 million and can be bought into production within three months of receiving approvals.
Besides, a maiden resource estimate is being completed for the Oonah tin deposit which lies within the recently acquired Montana Flats Exploration Licence. As for the Razorback mine, a review has commenced to evaluate the potential to define a mineral resource from the historical drilling and production data. Based on the results of the Razorback mine resource review and that of the Razorback tailings ongoing test work, a metallurgical test work program will also be considered for the same.
The company also released an accompanying market update informing that the London Metal Exchange tin price averaged USD 21,052/t over the March 2019 quarter, which is 10% higher than the average of USD 19,166/t over the December 2018 quarter.
Moreover, as per the World Bureau of Metal Statistics, the global tin market witnessed a deficit of 8,300t in January-February 2019. This was partly driven by the restricted exports from Indonesia and temporary plant closures over Chinese New Year. However, it also reflected a recovery in demand in China with apparent demand 3.2% higher than year ago levels.
Stellar Resources closed the three months to March 31st, 2019 with cash and cash equivalents of AUD 746K. The operating activities generated net cash outflows of around AUD 152K due to payments for exploration, evaluation, staff costs, corporate costs as well as interests paid.
With around 379.71 million outstanding shares, the SRZ stock price closed the market trading at AUD 0.011, diving by 8.33% on Friday, April 26th, 2019.
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