Estrella Resources Limited – The Benefit of Experience
We learn how Estrella is generating value from older mining sites with modern techniques and a wealth of experience.
Estrella Resources is a West Australia-based nickel sulphide explorer dedicated to the West Australian Tier One mining jurisdiction.
“Western Australia is an area we are well-versed in operating in, particularly the North-Eastern Goldfields region,” says Christopher Daws, Estrella’s Managing Director and CEO. “We’ve been operating here for 20-odd years exploring West Australian nickel properties. In 2017 we decided to focus our efforts at Estrella Resources in that direction and become a dedicated nickel explorer, and we also have nickel rights to four historic nickel mines mined in the late 70s and 80s.”
The company’s operations are geared towards generating long-term shareholder value, guided by a Board with extensive experience in the exploration sector and an innovative approach to the mining and development of metal deposits.
A Strong Portfolio
As well as a wealth of expertise, however, the company also possesses an impressive asset portfolio.
The Carr Boyd Nickel Project situated approximately 80km NNE of the City of Kalgoorlie-Boulder in Western Australia, has become a major focus for Estrella Resources Limited thanks to a recent nickel and copper discovery while drilling into the T5 electromagnetic target.
“The Carr Boyd Nickel Project is one of only a very limited amount of prospective layered intrusive complexes for nickel mining in the region. The nickel bearing pipes here were discovered in the 1960s, and only four intrusive complexes within Australia had been explored and mined for nickel sulphides at the time we purchased the property,” Daws tells us. “We believe Carr Boyd can be a producer of significant size, and that sets us apart from other junior explorers that simply don’t have the geological setting that can deliver extremely large nickel sulphide orebodies.”
This project covers the Carr Boyd Intrusive Complex, a 75 square kilometre mafic igneous complex that is home to nickel and copper sulphide occurrences – the most significant being the Carr Boyd Rocks mine.
Estrella’s recent reverse circulation drilling into the T5 target has intersected 11 metres of a mineralised basal contact zone, including 5 metres of strong matrix-style nickel and copper sulphides. It’s a result Daws is clearly excited about as the most significant discovery the company has achieved at this project to date. The company is now planning for future drilling in the area.
Carr Boyd is not Estrella’s only nickel sulphide resource exploration play, however.
“We’ve got a couple of other arrows in the quiver. Carr Boyd is our flagship project, but we have ownership of the Spargoville Nickel Rights located approximately 25km west of Kambalda that had four historic nickel mines that operated in the early part of the 1980s but has seen no modern exploration,” Daws tells us.
Spargoville was first discovered by Selcast Exploration in the late 1960s. Estrella acquired the project when the company bought WA Nickel Pty Ltd, giving Estrella access to a large database of drill holes, surface sampling and underground channel sampling of the project area. Advances in modern geophysical exploration and metallurgical processing methods mean Estrella Resources foresees broad exploration opportunities and targets to follow-up in Spargoville’s surrounding area. It’s an MO that is serving Estrella well.
“We believe we can apply modern technology and thinking to expanding those resources so they may be able to put back into production,” Daws says. “Particularly in light of the strengthening nickel price environment driven by electric vehicle and battery electrification we’re now seeing rapidly rolled out globally.”
While the demand for nickel is clearly on the rise, Estrella is also able to set itself apart from the other explorers in the field.
“We’re looking at these intrusive bodies that haven’t been explored more aggressively since their initial discoveries,” explains Daws. “The Intrusive Complex that is a scene at Carr Boyd we believe can support very large discoveries of massive sulphide nickel ore bodies, and that is one of the major reasons they are appealing to us.”
Of course, a strong resource portfolio alone isn’t enough, and like most junior mining companies Estrella has faced challenges in terms of access to capital.
“When you set out to take on high-risk exploration, dollars are usually limited, but once you have more success it gets a little bit easier and we’re finding that with Estrella,” Daws admits.
As well as financial backing, Estrella’s projects also require human capital, but the labour market in this field is particularly competitive.
“There’s only a small pool of qualified or well-experienced nickel geologists, and when the market improves, they’re well sought-after and it costs a reasonable amount of money to keep them,” Daws points out.
When it comes to finding those experienced staff, Daws is fortunate to be able to draw upon his own long experience within the industry.
“It comes with the local homegrown knowledge. When you’ve been working for so long in the industry you build up contacts and sources of information. I have been working for over two decades within the West Australian resources industry and I’ve come across a number of good geologists in my time,” he tells us. “Neil Hutchinson is one chap we headhunted in 2005 to come work with us. We hired him from a fairly dynamic explorer-producer at the time and we’d kept in touch. When Neil came out of employment about a year-and-a-half ago to set up his own geological consultancy we got back in touch with him and he came on board to run Estrella’s exploration operations.”
As well as drawing on his own experience and connections, Daws has also seen word-of-mouth work as a valuable recruitment tool.
“Neil’s well-connected and he allowed Estrella to tap into other resources and other geological personnel including a new appointment coming in from Poseidon Nickel who previously worked with Neil,” Daws recalls. “It comes down to personal relationships built up over many, many years, and we can tap into that when looking for skilled personnel.”
Ultimately, Daws has found that success breeds success.
“Good quality people are always looking to come onto a successful project. Geologists have a habit of wanting to put their names to discoveries,” Daws says.
Estrella’s current operations seem like the perfect opportunity to put names to new discoveries. It’s clear talking to Daws that he is optimistic for the future.
“We’re extremely bullish about what is developing at Carr Boyd in terms of where we’re heading,” he says. “We believe we’ll deliver a world-class nickel sulphide resource of significance that will ultimately determine the result for Estrella and its shareholders. We’re driving up our market value through successful drill campaigns. The continued exploration activity and drilling will drive a much higher share-market valuation over time and eventually, we’ll be in a position to have a world-class ore body to dispose of or develop, or someone may buy us out or assist us with developing the asset.”
One thing never changes, however. “Drilling and exploration are our priorities,” Daws insists.