Estrella Resources Limited (ASX: ESR) has delivered a bulk metallurgical sample from the Spargoville 5A Nickel Mine, located approximately 20km Southwest of Kambalda, to MMO’s HPAL Plant.
The total 5A bulk metallurgical sample landed at Glencore’s MMO was 2,413 wet metric tonnes (WMT), with an average moisture content of 3.34%. Assays received from the laboratory confirmed that the trial parcel was within all specifications stipulated by Glencore, and MMO has begun processing the sample. Details on the performance of the 5A mineralisation through the HPAL process will be determined during the current quarter and will inform the DFS.
A 50% provisional payment for 1,994 WMT of material delivered in January has been received from Glencore. Final payment to be calculated based upon March’s LME nickel weighted average price (WAP).
A similar arrangement will occur for the balance of 418 WMT delivered in February where pricing will be the April LME nickel WAP.
The Company anticipates a successful outcome to the bulk sample trial at MMO which will pave the way for the completion of the 5A Definitive Feasability Study (DFS) which is currently well underway. The basis of the DFS involves a simple open-pit cut-back to access the very high-grade transitional massive sulphide material of which there is around 16,000t grading 7.8% Ni within the Measured Resource category. This will be blended with the matrix mineralisation and trucked to a third party.
With the successful delivery of the metallurgical sample to Glencore, Estrella has passed a very significant milestone on the way to getting the Spargoville Nickel Project into production,” Managing Director Chris Daws said.
“The backdrop of strong nickel prices is providing confidence that Estrella should be able to commence the 5A Nickel Mine open pit project this financial year subject to statutory approvals, positive DFS and financing.”
Minecomp in Kalgoorlie has completed the open pit cutback design with structural and stability input from Green Geotechnical. Minecomp is in the last stages of finalising the site lay-out plans required for environmental and departmental approvals. The ore and waste schedules have been finalised which can now be used to inform a more detailled financial model and revenue forecast.
MBS Environmental has been engaged to assist the company with the statutory approvals process, waste management and the Mine Closure Plan. Testing of the expected waste material to date has indicated that all waste from the mine should be self-neutralising and will not pose any environmental risk. Any waste sulphide material can be safely managed by encaptulating it within the waste dump.
The majority of the measured category is expected to be extracted, leaving behind the thinner fringe zones of mineralisation that would suffer too much dilution during mining to be economic.
