Estrella upgrades nickel resource, presses ahead with DFS

ASX-listed Estrella Resources has announced an upgrade of the nickel resource estimate at its Spargoville project’s 5A deposit, about 20km south-west of Kambalda, with most of the resource now in the more confident “measured” category.

The measured part of the mineral resource at 5A now sits at 60,000 tonnes, grading 2.8 per cent nickel, 0.22 per cent copper and 0.06 per cent cobalt, giving up 1,640 tonnes nickel and 130 tonnes copper.

The deposit’s total mineral resource now sits at 124,000 tonnes going 1.9 per cent nickel for 2,370 tonnes nickel and 190 tonnes copper.

Estrella says it is pressing ahead with optimisation work for a definitive feasibility study and is focused particularly on 16,000 tonnes of massive sulphides grading 7.8 per cent nickel below 5A’s existing open pit.

We remain firmly on target in bringing Spargoville into operation next year should the DFS be favourable.

As has been repeated to me by many a miner, grade is king. 5A delivers on this metric and at current nickel prices is certainly worth pursuing development.

Though the nickel price has fallen from its “Mad March” highs of more than US$46,000 per tonne, it is still around US$21,000 per tonne.

Estrella’s next move begins with extracting nickel from a bulk sample of between 2,000 and 4,000 tonnes and it will not use the conventional processing method of standard flotation concentrates.

Instead, it will use an alternative approach employing high pressure acid leaching to help it quantify the nickel, copper and cobalt recoveries.

Estrella says testing has shown this alternative treatment option can successfully extract the vast majority of the nickel, including silicate and soluble fractions and transitional sulphides.

The updated resource has increased the amount of transitional material that had previously been classified as fresh and the new method of extraction is expected to cope better with transitional ore.

Management says contract negotiations for the bulk sample to be mined, transported, processed and the nickel sold are underway.

Spargoville is approximately 20km south-west of Kambalda, Western Australia and was first discovered by Selcast Exploration in the late 1960s.

Since then, the 1A, 5A, 5B and 5D deposits have been discovered and developed. Estrella acquired the project in 2017 when the company bought WA Nickel.

The deposit of primary interest is 5A, which was mined as an open pit for a short period in the 1990s. A high-grade body of nickel, copper and cobalt was left behind located directly below the old pit floor.

Estrella’s second project is the Carr Boyd nickel project 80km north-east of Kalgoorlie. Only last month the company declared a maiden inferred mineral resource estimate at the project’s T5 deposit of 0.86 million tonnes at 0.66 per cent nickel and 0.42 per cent copper.

The company says that resource underpins an updated JORC exploration target of five to seven million tonnes at 0.7 to 1.5 per cent nickel and 0.3 to 0.5 per cent copper.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au