Estrella Resources has struck a deal to divest its Spargoville nickel rights near Kambalda in Western Australia to Astral Resources for $3 million in scrip, a move that will enable the company to sharpen its focus on a suite of promising projects in Timor-Leste.
The deal allows Estrella to streamline its portfolio amid a tough market for Australian nickel producers, who have been feeling the squeeze from a flood of lower-cost supply out of Indonesia. By tidying up its WA assets, the company can now concentrate its firepower on what it considers a virtually unexplored region in Timor-Leste, where it has already uncovered significant potential across an intriguing mix of manganese, limestone, copper and gold.
Under the terms of the binding agreement, Astral will issue 20 million of its shares at a deemed price of $0.15 per share to Estrella for 100 per cent of the nickel rights. The rights cover five tenements in WA’s richly endowed Eastern Goldfields. Half of the consideration shares will be held in voluntary escrow for a period of six months from the completion of the deal.
Estrella Resources managing director Robert Mencel said: “We are pleased to reach a binding agreement with Astral Resources which allows Estrella to increase its focus on its flagship tenements in Timor-Leste, while still retaining investment upside from the Company's existing suite of assets.”
The company’s attention now lands squarely on its Timor-Leste portfolio, where it holds several key projects.
At its Ira Miri manganese project, Estrella’s goal is to define a JORC-compliant manganese resource of more than two million tonnes. The company has already excavated a 27,000-tonne bulk sample for market appraisal and is awaiting final export approval. Previous drilling at the site hit impressive high-grade intercepts including 8.05 metres at 53 per cent manganese.
Meanwhile, the company’s Werumata limestone project already hosts an eye-watering maiden inferred mineral resource of 621 million tonnes. Alongside finalising a scoping study, management has identified a low-cost opportunity to potentially upgrade a portion of the resource to the higher-confidence indicated category.
Adding to the multi-commodity portfolio, Estrella is also actively pursuing in-country copper and gold. It recently defined compelling drill targets at its Laleno Dome prospect using a drone-borne magneto-telluric (MTd) geophysical survey and has since been awarded two new exploration licences over ground the company considers prospective for orogenic-style gold and copper mineralisation.
Notably, copper mineralisation has been identified at nine locations around the Laleno Dome, including five newly identified occurrences associated with targets generated by the MTd geophysical survey. Rock-chip samples from Laleno Dome have returned copper values up to 60.34 per cent and 33.22 per cent from two separate samples, livened up by the more recent discovery of gold at Laleno Dome grading up to 1.3 grams per tonne.
Estrella says its geological observations have identified hydrothermal alteration and copper mineralisation in porphyritic intrusive rocks and surrounding country rock, supporting the potential for Laleno Dome to host an intrusive-related copper-gold system.
One of the new tenements in the Covalima Municipality lies within the Lolotoi Complex, a geological setting known to host copper characterised by intense shearing typical of orogenic gold deposits. The other, in the Oecusse region, contains known alluvial gold occurrences. The primary source is believed to be quartz veins within large, untested fault zones.
With its WA nickel assets now in the hands of a neighbour and a $3 million scrip payment bolstering its financial position, Estrella has cleared the decks to go all-in on its Timor-Leste ground.
In a region that has seen little in the way of modern, systematic exploration, the company appears well-placed to write a new chapter in the hunt for the next major discovery, one that could help significantly improve the lives of the people of Timor-Leste as it continues to emerge from a shattered history and decades of disadvantage.
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