Estrella Resources has rung the till on its Timor-Leste manganese play, signing a binding sales agreement for 27,000 tonnes of ore from its Ira Miri project with Australian private company Repusource Pty Ltd. The sale is part of the Estrella Murak Rai joint venture’s (JV) market appraisal program. Estrella manages the JV and holds a 70 per cent interest, with its Timorese partner Murak Rai Timor holding the remaining 30 per cent.
The deal marks a significant commercial milestone for the company’s JV, moving its recently government-authorised bulk export sample towards shipment, customer evaluation and, most importantly, first revenues. The agreement covers just this initial parcel and does not commit the buyer to ongoing purchases.
The agreement will see Repusource, which supplies manganese to processors across the Asia Pacific, take on the 27,000-tonne parcel, with an option to vary the quantity by plus or minus five per cent. While specific pricing terms remain commercially confidential, the sale was agreed at prevailing market rates and will be subject to quality adjustments once independent surveyors complete final assays.
Under the terms of the deal, payment of 100 per cent of the invoiced amount is due within three business days of the buyer obtaining the required commercial documents, with Estrella having the option to require an irrevocable letter of credit from a first-class bank to support the payment.
Delivery will be on a “free on board” basis at anchorage near the Tenu Port barge facility, with the company responsible for loading the cargo and the buyer arranging the vessel and onward shipping. Shipment is targeted within 30 to 45 days of contract and letter-of-credit execution.
The bulk sample appraisal program represents an important de-risking step for Estrella's manganese project, giving prospective international buyers an opportunity to provide feedback on product quality and commercial performance. At the same time, it will allow the company to trial the export process and determine the practical delivery requirements for any potential longer-term supply.
The outcome is expected to help management assess Ira Miri's commercial potential and support its work towards a Category A Mining Licence which is required for any future full-scale development.
Estrella Resources managing director Robert Mencel said: “Signing this agreement gives us a contracted buyer for the Ira Miri bulk sample and marks another important step towards delivering the material to market. This initial sale will provide valuable feedback on customer acceptance and the practical requirements of exporting our manganese product, helping us assess future supply opportunities and the longer-term commercial potential of Ira Miri.”
The shipment lands against a mixed manganese backdrop. Global miner Eramet recently said China-facing ore prices remained above year-earlier levels in the third quarter, although they had since eased from the first half as demand weakened and supply remained ample. This makes Estrella's customer-evaluation shipment strategy all the more astute.
The Ira Miri project itself is no token effort. The bulk sample was extracted from a pit targeting historical high-grade intercepts, including a notable 8.05-metre hit assaying a whopping 53 per cent manganese. However, the company has a much bigger prize in mind, with a stated objective of ultimately outlining a JORC-compliant manganese resource of more than two million tonnes at the project.
While the manganese sale marks a key commercial step, it is just one facet of Estrella's broader, multi-commodity strategy in the virtually unexplored nation. At its Werumata project, the company recently upgraded its limestone resource to a hefty 533 million tonnes, with 274 million tonnes of that now sitting in the higher-confidence indicated category.
Perhaps more tantalising is the company’s hunt for a major copper-gold prize at its Laleno Dome prospect. Estrella recently kicked off preparations for a maiden drilling campaign to test its theory of a porphyry system lurking beneath the surface. Porphyry deposits are prized for their potential to host enormous, long-life mining operations and the company’s early-stage work has identified widespread copper occurrences and deep conductive targets worth chasing with the drill bit.
This first manganese shipment is not just about selling a pile of rocks; it is about proving a new supply chain from a frontier jurisdiction. The results will inform potential longer-term supply discussions and the next stage of project assessment for its entire Timor-Leste portfolio.
With manganese also a key ingredient in certain battery chemistries, establishing a new source of supply in the Asia-Pacific could prove to be a shrewd move by Estrella, particularly as downstream supply chains are constantly being reassessed. A new, reliable source of manganese could set the stage for a much larger play for the company in under-explored Timor-Leste.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
