A burgeoning $1800 per ounce gold price has nickel explorer Estrella Resources eyeing rapid development of a small, historic gold mine in Western Australia.

Estrella (ASX:ESR), which had just $282,000 in the bank at the end of December, is speaking with finance and mining service groups to “explore potential arrangements” to develop the 46,337 ounce Munda deposit.

“Given the current gold price of approximately $1,820 per oz, the company sees that an opportunity could exist for a small mining operation targeting a high-grade component of the deposit,” Estrella told investors.

Major miner Resolute (ASX:RSG) actually kicked off open pit mining at Munda in 1999, but a sub-$400 per ounce gold price made it un-economic.

Resolute wanted to recover about 18,000 ounces – worth about $32.7m at today’s prices — to a depth of 60 metres below surface focusing on a high grade 4.94 grams per tonne section.

It was closed prematurely prior to the bulk of gold resources being accessed, Estrella says, only reaching 15m below surface.

Munda is about 3km from Mincor Resources’ (ASX:MCR) Widgiemooltha gold project, and a number of third-party gold toll milling facilities exist within economic trucking distance.

The Estrella share price over the past 12 months.
The Estrella share price over the past 12 months.