Star Minerals has its eyes on the gold production prize
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Star Minerals has set itself the ambitious goal of starting gold mining within 12 months of completing its planned initial public offering.
While most new resource plays start with prospective ground and are lauded for starting exploration right off the bat, the company isn’t satisfied with just remaining an explorer and has set itself some lofty goals.
Star Minerals already has an inferred resource of 600,000t grading 2.2 grams per tonne (g/t) gold for 42,500oz of contained gold at Tumblegum South.
Proceeds from the planned $5m initial public offering will be used to progress the project towards production.
Chief executive officer Greg Almond told Stockhead that in the six months after listing, Star will carry out drilling to further define the size and the shape of what it will mine out.
The company will also get the engineering and environmental work done with the goal of getting ready to mine Tumblegum South within 12 months of the IPO.
“It’s a pretty aggressive timeline, but we think it’s best that we aim for something nice and quick. It doesn’t help anyone for us to take a long time to do it, so we want to progress as quickly as we possibly can,” he added.
Current resources are for a planned open pit development, though there is also scope for underground development in the future subject to further drilling.
“It’s good from the surface, so we’ll be able to go straight into it,” Almond said about the shallow nature of the deposit.
Tumblegum South also benefits from known metallurgy, with conventional leach testing achieving better than 90% gold recoveries, indicating that processing will be a straightforward process.
“One other thing that we have got going for us is that the pits to the north were mined in the 90s by Dominion and so the wider deposit area is quite well understood,” Almond added.
Third party processing of gold is certainly a possibility given that Bryah had previously signed a conditional agreement that could have seen ore from the project being trucked over to Adaman Resources’ nearby processing facility at the Kirkalocka gold mine.
Tumblegum South is not the only arrow in Star Minerals’ quiver.
The company also acquired the West Bryah project from Bryah Resources – the company’s largest shareholder – for 2 million shares along with a 0.75% royalty on any future production.
West Bryah covers 349sqkm in the Peak Hill area and was historically worked during the early gold rush days in the late 1890s.
However, not much modern exploration was carried out beyond brief periods in the 1960s and 1980s.
It wasn’t until Sandfire Resources’ (ASX:SFR) successes in the area that interest really exploded and the broader Bryah Basin became a very prospective target for explorers.
“There has been a little bit of drilling and rock chip work historically, but a lot of it hasn’t been particularly well targeted or was looking for other kinds of resources such as iron ore and uranium,” Almond explained.
“Even areas that that look like they’ve been drilled haven’t necessarily been drilled for gold, as most historical drilling was only assayed for one thing.”
He added that Star Minerals was currently reviewing a lot of old data and had found some interesting tidbits in various WAMEX reports and the like.
“We’re going to leverage off those and start some soil sampling and possibly some Reverse Circulation drilling within the first two to three months,” he said.
“Then as we further identify things and narrow down targets, we will be able to start bigger drilling programs.
“We will have look at geophysics and everything else, but we will do it in a staged and rational way, we are not going to go and fling out a huge amount of money on geophysics straight away, but the idea obviously is that once we get Tumblegum South sorted out and producing that’ll provide a war chest for us to go and do the work on the West Bryah.”
This article was developed in collaboration with Star Minerals, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.