Nove. 15 -- ASX-listed Stellar Resources has agreed to purchase Gippsland Limited's 40% stake in the Heemskirk project in Tasmania. Stellar will acquire Gippsland's interest in return for 43.5 million Stellar shares (worth approximately A$ 4 million) and a royalty. The royalty will be triggered when the tin price is A$25,000, at a rate of 1.0% of net smelter return. The royalty will rise to a maximum rate of 2.0% at a tin price of $A30,000 and above. Gippsland had decided to dispose of the stake in order to focus attention on the development of its Abu Dabbab tantalum-tin project in Egypt.
Ian Gandel, Chairman of Gippsland said "The Heemskirk Tin Project has been disadvantaged for too long by the joint venture agreement signed in 1972. By committing to this deal, the parties will ensure that the project is given the best possible chance of becoming a mine and this can only benefit shareholders of both companies. Gippsland shareholders will benefit not only from their continued exposure to the Heemskirk asset and a royalty from that project, but also from exposure to Stellar's other exploration projects."
The project is located near Zeehan on Tasmania's West Coast in an area of historical mining that is well serviced by power, water, transport, mining and other infrastructure. Drilling by Gippsland Limited in the 1970s and subsequently Aberfoyle Limited during the 1980s identified three tin deposits; Queen Hill, Montana and Severn. In early 2008, Stellar acquired Aberfoyle's 60% interest in the joint venture with Gippsland. Since that time, Stellar has evaluated the historical data base, completed some confirmatory drilling and undertaken metallurgical studies. The Stellar results highlighted the high grade nature of the mineralisation and showed that tin is recoverable using a process similar to that employed at the nearby Renison Bell tin mine. Indicated and inferred resource is 4.36 million tonnes of ore at an average grade of 1.1% tin, giving 48,000 tonnes of contained tin.