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Estrella kicks off drilling at Kambalda for nickel DFS

Estrella Resources has begun resource confirmation and metallurgical drilling at its Spargoville nickel project in Kambalda as the company prepares to produce a definitive feasibility study of its 5A nickel mine resource.

Drilling contractor Topdrive Drillers Australia has mobilised at the Spargoville project, that Estrella acquired in late 2017 when it purchased WA Nickel, with planning ongoing for an open pit cutback at the site’s 5A nickel mine.

Management says the expansion of the 5A nickel mine is envisaged as an 80m deep cutback of the existing open pit that is currently 30m deep.

Geotechnical studies will be undertaken to refine optimal pit designs to access the 5A mineralisation.

The company will be completing approximately 17 diamond holes into the 5A mine resource area aiding in final ore reserve calculations, metallurgical characteristics and final mine design parameters.

Drilling is expected to take 4-6 weeks to complete as the depths will be relatively short to reach the anticipated maximum new 5A pit design.

Assays for nickel intersections will be fast-tracked through the laboratory to aid in the speed of the completion of the DFS, mine planning and permitting.

Estrella says it has been fortunate as recent upgrades to water supplies in the area will assist the drilling efforts, keeping costs to a minimum.

5A represents an early nickel producing opportunity for Estrella via an extremely simple SMP open pit cutback operation accessing valuable nickel tonnes. With the re-start of the Kambalda Nickel Concentrator at Kambalda by BHP-Billiton to treat third-party ores the location and timing of developing 5A is obvious. Our relationships with drilling and mine service groups are aiding in our efforts to make the most of what we have in the backdrop of an incredible nickel market.

The 5A mine optimisation and pit designs will be completed by independent third parties upon the completion of drilling and resource estimation with additional metallurgical studies.

A 2018 drill campaign recorded results at the 5A deposit including a 15m section at 10.45 per cent nickel, 0.78 per cent copper, 0.20 per cent cobalt and 1.15 grams per tonne palladium from 20m.

Estrella says at current nickel prices the 5A nickel mine cut-back represents an early cash-flow generating opportunity for the company.

This could then be utilised for the development of the Carr Boyd nickel mine, T5 resource expansion/definition drilling and to progress the 5B nickel mine, 1A nickel mine and Andrews nickel mine development opportunities at Spargoville.

The price of nickel is currently hovering around US$27,000 per tonne.

The region’s metals potential was first discovered by Selcast Exploration when the miner identified nickel sulphides in the late 1960s.

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

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