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Estrella eyes resource upgrade after latest WA nickel hits

Estrella Resources will turn its attention to upgrading its resource after the final chapter of resource drilling at its Spargoville nickel project near Kambalda in WA delivered a raft of solid intercepts.

Assay results from two diamond holes sunk beneath the Spargoville 5A deposit include 2.76m at 3.58 per cent nickel from 71.46m and 2.2m going 3.17 per cent nickel from 61m.

The company says the results will flow into an updated resource estimate at Spargoville and believes its latest results place it in a strong position to define a significant resource at the project.

A 2019 resource estimate outlined a 127,000 tonnes resource running 1.9 per cent nickel and 0.15 per cent copper for 2370 tonnes of nickel and 190 tonnes of contained copper at the deposit

With drilling now complete Estrella aims to move onto the next stage of the work that is bulk sampling material from the deposit which management believes could de-risk the project from a resource and metallurgical perspective.

Estrella has already removed drill water from the base of the open pit mine, paving the way for a bulk sampling exercise. The program is expected to be completed by October.

A test of the “transitional” material at an alternative beneficiation plant to one originally used in 2019 is then next on the list of things to do.

The explorer is anticipating the amount of transitional material beneath the open pit will increase and the amount of fresh material will decrease when compared to figures derived in the initial resource estimate.

In order to inform the definitive feasibility study, the company is examining the economics of two distinct production streams for the transitional and fresh material.

Estrella has sought to broaden its focus to include the Spargoville project and the 5A nickel deposit precisely because it contains high-grade mineralisation at a time when the price and underlying fundamentals of nickel demand are strong.

I am exceptionally pleased with the progress we have made to date, which positions the Company to meet its target of bringing Spargoville into operation next year should the DFS be favourable.

Estrella picked up Spargoville about five years ago after purchasing holding company WA Nickel. At that stage management considered the 5A deposit to be a compelling asset capable of delivering a significant nickel resource through mining of its three key mineralisation zones.

The deposit hosts oxide mineralisation near the open pit’s surface, transitional sulphide material beneath that and fresh sulphide material at the mine’s floor.

The sulphide material was previously mined between 1996 to 1997.

Management is now looking to expand the 30m deep 5A nickel mine through an 80m-deep cutback of the existing open pit. The move will allow it to get at the fresh sulphide material.

It could certainly prove to be the right time to get into nickel with a recent report by the Minerals Council of Australia suggesting demand for nickel could hit 3.9 million tonnes by 2030, up from 2.4 million tonnes in 2019.

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

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