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Estrella to drive nickel production at WA play

Estrella Resources says an appreciation in nickel price will see it accelerate development plans for its Spargoville project located about 20km southwest of Kambalda, WA. The company picked up the rights to the operation during a lull in the nickel price and believes under current conditions it could be scrubbed up to be a lucrative play which warrants the mines development.

Estrella plans to launch into a smorgasbord of activity including drilling and several technical studies in an effort to transition to producer.

The company believes the action could kick the project into hyperdrive and accelerate its access to early cashflow and positioning it as Australia’s next nickel producer.

Estrella acquired the Spargoville nickel sulphide project in late 2017 when it purchased WA Nickel.

The region’s metals potential was first underlined by Selcast Exploration when the miner identified nickel sulphides in the late 1960s. Since then, the 1A, 5A, 5B and 5D deposits have been identified and partially exploited on two of the three mining leases.

According to the company, each of the mining leases offers surplus nickel sulphide mineralisation and significant exploration potential.

The company’s opening play will see it vector in on the residual resource at the 5A nickel deposit ahead of a Definitive Feasibility Study, or “DFS” for an open pit mine at the site.

Mineralisation in the zone is comprised of a 30m oxide zone that was exploited via an open pit mining scenario in the mid-90’s by Amalg Resources NL.

The focus of the DFS will be a 20m thick transitional zone lies under this. The precinct is underlain by another 30m of fresh sulphides suggesting Estrella could unearth even more nickel as the rods sink deeper.

A 2018 drill campaign completed over the 5A nickel deposit brought forward a slew of remarkable results 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.

Another hole delivered a 5m interval running 11.32 per cent nickel, 0.54 per cent copper, 0.21 per cent cobalt, 0.42 grams per tonne palladium and 0.22 g/t palladium from 61m.

Other notable hits from earlier probes include a 3m intersection going 12.9 per cent nickel, 1.37 per cent copper, 0.29 per cent cobalt, 1.86 g/t palladium and 0.67 g/t platinum from 69m.

The company is also looking to kick off a scoping study on its pre-developed 5B nickel deposit. The deposit was initially mined via an open pit operation between 1975 to 1982 and 1992 to 1993, delivering around 14,000 tonnes of nickel.

After the open pit mining phase, a 600m long decline was built to facilitate the drilling of the nickel and gold mineralisation, however no nickel was ever extracted.

According to Estrella, the decline is still intact and accessible for renovation, allowing for a revised mining campaign some 20 years later.

The price of nickel is currently trending at around US$26,000 per tonne, cooling from an astronomical spike of around 250 per cent in an unprecedented short squeeze around early March.

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

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