www.stellarresources.com.au
Stellar Resources (ASX: SRZ) holds two priority advanced resource projects - a major magnetite project located in South Australia and a high grade tin deposit in Tasmania - as well as a number of exploration properties targeting copper, gold, uranium and nickel.
The company's aim is to develop a minimum 5 million tonne per annum magnetite operation based on the completion of a successful feasibility study at Tarcoola iron ore project in central South Australia.
Stellar Resources step out drilling points to resource upgrade at Heemskirk
Stellar Resources' (ASX: SRZ) latest drill results at the Heemskirk Tin Project in Tasmania point to potential for an upgrade in the size of the Severn deposit by drilling deeper.
Of the three known deposits at Heemskirk, Severn represents the best possibility of substantially increasing the Heemskirk resource and potentially boosting estimated profit margins at the project.
The results from diamond drill hole ZS107 and wedge hole ZS107A represent a major step out targeted 150 metres down plunge from historical diamond drill hole ZS84 which intersected 10 metres grading 0.8% tin.
Peter Blight, Stellar's CEO said “significant potential exists to upgrade the size of the Severn deposit by drilling deeper. The results from these latest holes have defined the northeastern margin at depth and given us a clearer understanding of controls on the mineralisation and where to focus our future drilling to significantly upgrade the Heemskirk resource.”
The purpose of the drill hole was to test the limit of the northeast margin of the Severn deposit at depth. ZS107 intersected the ZS84 tin bearing pyrrhotite/pyrite zone at 547 metres downhole over a thickness of 20 metres.
The company said tenor of tin mineralisation in ZS107 was lower than that encountered in ZS84 suggesting that the deep, northeast margin of the tin mineralisation has been intersected.
Hole ZS107A tested the target zone 20 metres above ZS107 and intersected a more intense pyrrhotite/pyrite zone with stronger chlorite alteration and assay results are pending in about three weeks.
Geological interpretation indicates that higher grades are most likely to extend at depth in a southwesterly direction.
The Inferred Resource at Heemskirk remains unchanged, however the potential has been upgraded. In March a JORC Indicated and Inferred Resource of 4.4 million tonnes at 1.1% tin with 49,000 tonnes of contained tin was reported for the Queen Hill, Montana and Severn deposits within the Heemskirk project.
The company's next stage of drilling will test below Severn, targeting the vertical extension below the highest grade mineralisation where there is potential to double the size of Severn. Four holes are planned to test this priority target in the next stage of drilling.
The Heemskirk Tin Project is located near Zeehan on Tasmania’s West Coast in an area well serviced by power, water, transport, mining and other infrastructure.
Stellar holds a 60% interest in the project with joint venture partner Gippsland Limited (ASX: GIP) and can increase its holding to 70% by completing a Feasibility Study.
The latest discoveries come hot on the heels of a Scoping Study released in July which indicated strong profit margins based on tin cash costs of US$12,780 per tonne.
A projected 21% internal rate of return and 3.5 year payback at a long-term tin price of US$25,000/tonne (US$22,500/t net of treatment charges) will see Stellar immediately move to the Pre-Feasibility study to develop Heemskirk.
An annual tin production of 3,900 tonnes would rank the project second only to Metals X's (ASX: MLX) Renison Bell mine in Australia.
Stellar remains on target for a Pre-Feasibility Study at Heemskirk by mid-2012, with a Bankable Feasibility study by the end of 2012 (which would allow the company to move to 70%), with production in 2014.
