re: Ann: SRZ: Scoping Study Green Light for H...
Some Highlights
21% internal rate of return and 3.5 year payback at a long-term tin price of US$25,000/t (US$22,500/t net of treatment charges) (tin price just went up rose US$850 to close at US$26,500 may be looking at a bounce back to over $30000).
Stellar, as operator of the JV, have stated that the Heemskirk Tin Project remains on track for production in 2014
continued drilling to upgrade and expand the resource estimate
Assessment of the silver and lead potential (so much for Gip's downplaying of the silver potential) In the 1890s, Zeehan was a major silver and lead mining district ranking second in production to Broken Hill.
43% operating Margin, cash cost 49% below then spot price of $25000
exploring a fourth deposit
looking to be second biggest tin mine in australia and they have not finished expending and upgrading the resource yet! An annual tin production of 3,900 tonnes would rank the project second only to Metals X's (ASX: MLX) Renison Bell mine in Australia.
Peter Blight, Stellar's CEO, said ?the scoping study highlights the importance of Heemskirk?s high grade in providing a competitive cost structure for an underground tin mine. This also underpins a positive economic outcome on a standalone operation."
The resource base at Heemskirk is likely to increase significantly. As well the company will investigate the potential for by-product lead and silver production.
The project benefits in terms of reduced capital costs from excellent infrastructure with close access to a power transmission line, water and a sealed road from site to the port of Burnie 130 kilometres away.
Comment(fom proactive) The life of mine gross revenue of $673 million (100% basis) net of smelting and refining charges, or $88.5 million per annum, is significantly higher than Stellar Resource's market valuation of circa $15.2 million, and indicates there is significant long term upside in Stellar's market value and rating.? It is also significantly undervalued in terms of its peers.
The resource grade of 1.1% tin is the highest grade of any Australian listed tin company other than Metals X's?Renison Bell mine, under-pinning the project's competitive cost structure.? The estimated cash cost places the project at the low end of the range for hard‐rock underground operations.
Hard to see how the news could be any better. Saying that Sharetrade101 having worked in the industry could probably explain better than I how good the news is.
Gippsland is extremely encouraged by the results of the study. Bet they said that through gritted teeth! Maybe now they will start marketing a fantastic world class tin project (with silver and lead potential as well).
Heemskirk green light http://www.asx.com.au/asxpdf/20110706/pdf/41zmm1fppmgm2q.pdf http://www.asx.com.au/asxpdf/20110706/pdf/41zmnd3ptdf5x1.pdf
(20min delay)