Stellar’s Heemskirk Faces Market Pressure Amid Tin Price Softening Despite Strong Drilling

Robust Progress at Heemskirk Tin Project

Stellar Resources Limited (ASX: SRZ) has delivered a compelling quarterly update for the period ending 31 December 2024, highlighting substantial advancements in the development of its flagship Heemskirk Tin Project in Western Tasmania. The company is actively progressing a Prefeasibility Study (PFS) following a robust updated Scoping Study completed in the previous quarter, underscoring the project's strong economic potential.

Central to this progress is an accelerated diamond drilling program at the Severn and Queen Hill deposits, with 11 holes totaling 5,131 metres completed by quarter-end. Notably, drillhole ZS166 at Severn returned a record high-grade tin intersection on a grade-thickness basis, including 20.9 metres at 1.97% tin, with sub-intervals reaching up to 7.34% tin. These results significantly exceed the grades predicted by the 2023 Mineral Resource Estimate (MRE), suggesting potential for resource category upgrades and enhanced project economics.

Strategic Infrastructure and Resource Expansion

In a strategic move to leverage existing assets, Stellar signed a non-binding Memorandum of Understanding (MOU) with Australian Hualong Pty Ltd for access to the Comstock mine infrastructure adjacent to Heemskirk. This includes tailings storage facilities, water supply, grid power, and plant sites, which could materially reduce capital expenditure and accelerate project timelines.

The ongoing drilling program also supports metallurgical test work and ore sorting studies, with initial results from previous test work indicating significant potential for waste rejection and head grade improvement. Larger scale variability sampling is underway to validate these findings across the deposit, with results expected in the coming quarters.

Financial Position and Corporate Developments

Stellar maintains a strong financial footing, closing the quarter with $9.9 million in cash and term deposits, providing a solid runway to fund ongoing exploration and development activities. The company also announced the appointment of Louisa Martino as Company Secretary, bringing extensive corporate governance and financial expertise to the leadership team.

Despite a slight softening in spot tin prices during the quarter, the Heemskirk Project’s robust economics remain intact, with the updated Scoping Study projecting a 12-year mine life producing approximately 22,818 tonnes of tin concentrate. The project benefits from excellent infrastructure access, including proximity to the port of Burnie and renewable power sources, positioning Stellar well to capitalize on future tin market dynamics.

Looking Ahead

Stellar’s focus in 2025 will be on advancing the PFS, continuing resource drilling to upgrade inferred resources to indicated status, and refining metallurgical processes including ore sorting and tailings management. The company’s strategic initiatives and strong operational momentum position it as a notable player in the global tin market, with potential upside from resource expansion and infrastructure synergies.