Star Minerals Limited - Quarterly Activities Report for June 2024
SMS (SMS) Share Update July 2024 Tuesday 23rd
Star Minerals Limited Updates Tumblegum South Gold Project Scoping Study
Star Minerals Limited (ASX: SMS) has released its quarterly activities report for the period ending 30 June 2024, highlighting significant updates to the Tumblegum South Gold Project scoping study in response to sustained increases in gold prices.
Instant Summary:
- Updated scoping study reflects gold prices ranging from AUD$3,000 to AUD$3,800 per ounce.
- Production target ranges from 167kt at 2.43g/t producing 11.8koz gold to 255kt at 2.16g/t producing 15.9koz gold.
- Undiscounted accumulated cash surplus estimated between $9.4M and $19.6M.
- Pre-mining capital and start-up costs estimated between $0.7M and $1.5M.
- Company raised $264,000 through share placement and $240,000 through a Share Purchase Plan.
Tumblegum South Gold Project Scoping Study
The updated scoping study for the Tumblegum South Gold Project has been revised to reflect the sustained increase in gold prices, ranging from AUD$3,000 to AUD$3,800 per ounce. The updated production target now ranges from approximately 167kt at 2.43g/t producing 11.8koz gold, to 255kt at 2.16g/t producing 15.9koz gold.
The study projects an undiscounted accumulated cash surplus after payment of all working capital costs, excluding pre-mining capital requirements, of approximately $9.4M to $19.6M. Mining is planned as a single campaign over approximately 18 months, with pre-mining capital and start-up costs estimated to be between $0.7M and $1.5M.
Corporate Activities
During the quarter, Star Minerals completed a placement of ordinary shares to new and existing sophisticated investors, raising $264,000 at 3 cents per share. Participants received one free attaching option for every ordinary share subscribed, exercisable at 6 cents and expiring on 31 October 2026. Additionally, a Share Purchase Plan (SPP) raised $240,000 under the same terms as the placement, with a shortfall of $60,000 placed by the Lead Manager, Caravel Securities Pty Ltd.
Exploration and Development
Star Minerals continues to advance its exploration activities at the Tumblegum South Gold Project and the West Bryah Copper-Gold Project. Planning and ground truthing of a Reverse Circulation drill program at Tumblegum South are underway to test for resource extensions on interpreted structural targets. A surface geochemical sampling program is also being planned at the West Bryah Gold Base Metals Project.
The updated scoping study is based on the May 2023 Tumblegum South mineral resource estimate, prepared by Entech in accordance with the JORC Code (2012). The study included generating an optimal pit geometry using Whittle optimisation software. Project sensitivities were examined for a range of gold prices, demonstrating robust project economics with positive outcomes for gold prices ranging from AUD$2,000 to AUD$4,000 per ounce.
The updated scoping study demonstrates the economic viability of the Tumblegum South Gold Project across a broad range of gold prices. The projected cash surplus and relatively low pre-mining capital requirements are positive indicators for the project's financial health. The successful share placement and SPP also reflect investor confidence in Star Minerals' strategic direction.
Investor Reaction:
Investors and analysts have responded positively to the updated scoping study, noting the project's robust economics and potential for significant cash surplus. The sustained increase in gold prices has further bolstered confidence in the project's viability.
Conclusion:
Star Minerals' updated scoping study for the Tumblegum South Gold Project highlights the project's strong economic potential and the company's strategic focus on advancing its exploration and development activities. Investors should closely monitor further updates and consider the potential long-term benefits of this promising project.