Estrella Resources reveals promising interim feasibility findings for its 5A nickel deposit at the Spargoville project, pointing to a profitable underground mining operation.
Feasibility Insights and Financial Forecasts
Initial studies by Estrella Resources underscore the potential of establishing an underground mine at its 5A nickel deposit, part of the larger Spargoville project near Kambalda, Western Australia. The proposed structural design involves a straightforward decline and dual-level underground operation.
The company estimates an $11 million operational budget, equating to around $US3.20 per pound of nickel. This figure stands positively against the prevailing nickel price of approximately $US8.30 per pound. These computations employ a USD/AUD exchange rate of 0.67, slightly more optimistic than the current 0.63.
With commercial arrangements and financing underway, Estrella is poised to refine its economic model upon finalizing these aspects. The 5A deposit boasts significant reserves, including 2370 tonnes of nickel and 190 tonnes of copper, enhancing the project’s appeal.
Project Lifecycle and Operational Strategy
The project, predicted to span 10 months, encompasses comprehensive stages from development to haulage. Notably, a six-month period is earmarked for the underground mine’s development, emphasizing long-hole stoping.
Earlier in the year, Estrella forwarded bulk nickel samples to Glencore’s facility, affirming the ore’s metallurgical consistency and shaping the forthcoming mining strategy. Estrella’s leadership, represented by managing director Chris Daws, expresses enthusiasm in advancing the 5A prospects, especially post-successful metallurgical sampling.
While the mining lease resides with Maximus Resources, Estrella retains nickel rights, demonstrating cooperative governance over mining operations. Historical undertones date back to the 1960s, with subsequent explorations unveiling multiple deposits, underscoring the area’s mineral wealth.
Forward Momentum in Feasibility and Development
Continued efforts are channeled towards the definitive feasibility study (DFS), initiated last year, focusing on the underground operational aspect. Progress encompasses extensive engineering and geotechnical evaluations, propelling the project towards realization.
The company prioritizes meticulous contractor selection, aiming for design and cost efficacy, driven by robust nickel market projections. Confidence resonates from management regarding the 5A deposit’s future, citing careful planning and sound commercial negotiations as crucial success factors.
The interim study’s outcomes reinforce Estrella’s commitment to harnessing the Spargoville project’s full potential, advocating a prudent yet optimistic approach to nickel mining endeavors.