Star Minerals (ASX:SMS) is progressing environmental approvals of the Tumblegum South Gold Project in Western Australia, which will support the monetisation of the asset.
Chairman Ian Stuart says as permitting is the outstanding and longest lead item to begin mining, the company is starting the process while also negotiating mining and production solutions.
“Star is now taking the next steps to monetising this asset and more accurately assess various strategies to achieve this, including management contracts, sale, partial sale, or joint venture of the project,” Stuart says.
The company commissioned Orelogy Consulting to update Tumblegum South’s Scoping Study which was completed in December 2023.
The updated study showed a $19.6 million anticipated increase in free cashflow, compared to $9.4 million, at the top end of the gold price range of $3,800 per ounce.
Using the current gold price, which is $700 above the top end used in the Scoping Study, and while the study would need to be re-optimised, Star says there is an opportunity for potential upside to the project.
Further, pre-mining capital and start-up costs are estimated to be $1.5 million.
Star Minerals says the study presented a range of outcomes for open pit mining and third-party toll treatment of the project. The options using third-party processing plants were evaluated for the increase in gold price and higher processing and trucking costs.
The Tumblegum South Project is located 40km south-southeast of Meekatharra in Western Australia. The deposit is considered the southern extension of mineralisation encountered in the Gabanintha gold mining pits operated by Dominion Mining between 1987 and 1992.
The project hosts a resource of 616,000 tonnes @ 2.28 grams per tonne gold for 45,000 ounces of contained gold.
Write to Aaliyah Rogan at Mining.com.au
Images: Star Minerals
