Tasmanian tin explorer Stellar Resources has nabbed the all-important mining lease for its small, low cost St Dizier project – which could be in production within three months from receiving approvals.

Investor loved the news, sending the stock up 25 per cent to 1.5c by midday.

The mining lease gives Stellar (ASX:SRZ) rights to extract tin and other metals from St Dizier for an initial  6 years.

An updated scoping study reckons the project can be brought into production quickly for just $3.8 million and make about $10.4 million in pre-tax profits over its 30-month mine life.

That’s larger than Stellar’s current market cap of about $4.5 million.

It bases these figure on a tin price – which are currently on a bit of a tear — of $US20,000.

Check out this chart:

LME tin prices over the past 12 months.
LME tin prices over the past 12 months.

“The scoping study shows attractive returns on investment from the St Dizier open pit mine and development of St Dizier may be an important part of a ‘fast start’ option which the Company is continuing to review,” managing director Peter Blight said.