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Stellar's scoping study values Heemskirk tin project at A$71M

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Stellar's scoping study values Heemskirk tin project at A$71M

Stellar Resources Ltd.'s scoping study on the Heemskirk tin project in Tasmania, Australia, outlined a post-tax net present value, discounted at 10%, of about A$71 million, an about 45% pretax internal rate of return, and a 3.0-year payback period.

Capital cost for the project was estimated at about A$57 million, with all-in-cash operating cost of US$13,100 per tonne of tin.

Production during the 11-year mine life is expected at about 24,000 tonnes, according to the Oct. 1 release. The tin price was assumed at US$20,000/t.

The project is based on development of an underground mine, processing plant, tailings storage facility and surface infrastructure to mine ore from the Queen Hill and Severn tin deposits over the first 10 years, and open-pit mining of the St Dizier satellite deposit during the final year.

During the mine life, Heemskirk is expected to generate gross revenue of A$691 million, while the pretax net cash flow is estimated at A$180 million.

The study is based on an indicated and inferred resource for Heemskirk of 6.60 million tonnes grading 1.1% tin for 70,930 tonnes contained.

Managing Director Peter Blight said the company will now look to convert the remaining inferred mineral resource to an ore reserve and complete a prefeasibility study on the project.

Stellar noted that it will likely need funding of A$57 million for project development, and require additional pre-development funding of about A$8 million to convert the mineral resource to an ore reserve and complete a bankable feasibility study.

The scoping study expects Heemskirk's construction to take six months, and the start of production is expected in about three years, subject to funding.