Estrella Secures $5M Boost as Strategic Investor Exercises Key Option

Strategic Capital Injection Validates Estrella’s Timor-Leste Ambitions

Estrella Resources Limited (ASX – ESR) has announced that a strategic investor has exercised a $5 million tranche subscription option under a previously disclosed subscription agreement. This move will see the issue of approximately 136.76 million fully paid ordinary shares at a discounted price of $0.03656 per share, representing a significant 20% stake relative to shares on issue to date. The capital injection is poised to accelerate Estrella’s exploration and development activities focused on manganese and limestone projects in the emerging mining jurisdiction of Timor-Leste.

Funding to Drive Extensive Drilling Campaigns

The funds raised will be directed towards an ambitious drilling program that includes an initial 3,000-metre diamond and 10,000-metre reverse circulation drilling campaign. A secondary drilling phase, potentially adding another 10,000 metres, is contingent on geological outcomes from the first round. This aggressive exploration strategy underscores Estrella’s confidence in the prospectivity of its Timor-Leste assets, which remain largely underexplored but have shown promising early results.

Shareholder Approval and Royalty Arrangements

While the subscription agreement is now fully exercised, the issuance of shares remains subject to shareholder and regulatory approvals, with a general meeting anticipated around mid-August 2025. The agreement also includes a royalty component, granting the investor a gross revenue royalty on manganese ore sales, starting at 0.25% and potentially increasing to 0.5% depending on the level of investment. Additionally, security rights over nickel mineral interests at the Spargoville Project provide further assurance to the investor.

Management’s Perspective and Local Support

Estrella’s Managing Director, Christopher Daws, highlighted the strategic importance of this funding milestone, describing it as a strong validation of the company’s rapid first-mover approach in Timor-Leste. He emphasized the improved metallic balance sheet following recent drilling and the company’s commitment to advancing both manganese and limestone opportunities. Local community support and institutional backing further bolster Estrella’s position as it navigates the nascent mining landscape in Timor-Leste.

Looking Ahead

With this capital injection secured, Estrella is well-positioned to maintain momentum in its exploration and development programs. The coming months will be critical as drilling results emerge and shareholder approval is sought, setting the stage for potential value creation in a region ripe with mineral potential but still in the early stages of mining development.