Wednesday, 24 July 2013Justin Niessner

 

STELLAR Resources has demonstrated technical and economic viability for its proposed Heemskirk tin mine in Tasmania, defining the project’s net present value at $A61 million.

Stellar drilling near Zeehan

The pre-tax estimate considers a long-term tin price of $US25,500 per tonne and could be increased as much as 67% to $102 million with a 10% increase in price of the metal.

The London Metal Exchange cash tin closed at $19,418/t overnight.The result comes with completion of Heemskirk’s prefeasibility study, which established a higher resource, higher head grade and higher annual production rate for the project.

The underground project was found to be able to produce 4327 tonnes per annum of tin in concentrate, an 11% increase from the scoping study estimate.

The mineral resource increased by 49% to 71,500t of contained tin allowing for optimised mining plans to increase the run of mine ore grade to 1.06% tin.

The initial mine life is seven years, with potential to expand after further drilling at the site’s Severn zone.

Mining is expected to combine longhole open stoping and cut and fill methods to feed a conventional gravity and flotation concentrator with a capacity of 600,000tpa.

Assuming a 70% recovery, annual tin in concentrate production was estimated at 3900t.

Pre-production capital cost has been calculated at $126.6 million including $37.9 million for the mine, assuming an 18-month period of decline and stope development ahead of first ore milling.

Direct mining and processing cash costs of $12,268/t of tin in concentrate are 4% lower than in the scoping study.

Adding mine and process plant sustaining expenditures and corporate overheads to direct costs resulted in a mine-gate cash cost of $14,386/t.

Stellar said Heemskirk, located near Zeehan, had a number of infrastructure advantages including access to the port of Burnie and loading facilities for containerised concentrate via 150km of road serviced by several regional trucking contractors.

The company noted that the area was well serviced with communications, water supply and the nearby state grid.

It said its next steps would include drilling to expand the resource and increase the average deposit grade ahead of a commitment to a definitive feasibility study.

Shares in Stellar were unchanged today at A5c.

 

Article originally published by MiningNews.net