Stellar Signs MOU for 900ktpa Avebury Plant to Enhance Tin Production
Stellar Resources has signed a non-binding Memorandum of Understanding to explore using the idle Avebury Nickel Mine plant for processing ore from its Heemskirk Tin Project, aiming to enhance production and reduce development costs.
- Non-binding 6-month MOU signed with Hartree MI UK, Allegiance Mining, and Avebury Operating
- Access to Avebury Nickel Mine plant with 900ktpa capacity for potential tin processing
- Options include plant modifications, toll treating, co-processing, or acquisition
- Hartree granted 40 million options in Stellar as part of the agreement
- Stellar targets 3,000 to 3,500 tonnes per annum of payable tin over 6 to 10 years
Strategic Partnership to Leverage Existing Infrastructure
Stellar Resources Limited (ASX – SRZ) has taken a significant step towards advancing its Heemskirk Tin Project by signing a six-month non-binding Memorandum of Understanding (MOU) with Hartree MI UK Limited, Allegiance Mining Pty Ltd, and Avebury (Operating) Pty Ltd. This agreement grants Stellar access to the Avebury Nickel Mine and Plant, located less than 10 kilometres from Heemskirk on Tasmania's west coast, to explore its potential as a processing facility for tin ore.
Unlocking Value from Idle Assets
The Avebury plant, with a nameplate production capacity of 900,000 tonnes per annum, was placed into care and maintenance in March 2024 following a downturn in nickel prices. Stellar’s MOU opens the door to repurposing this existing infrastructure, which could significantly reduce capital expenditure and accelerate the development timeline for Heemskirk. The company is evaluating several commercial options, including plant modifications to enable tin processing, toll treating, co-processing, or even acquiring the Avebury project outright.
Advancing the Heemskirk Prefeasibility Study
Stellar is progressing its Prefeasibility Study (PFS) with a focus on optimizing the Heemskirk Project’s development. The 2024 Scoping Study outlined an underground mining operation powered by Tasmania’s renewable energy grid, targeting an initial production of 1,900 tonnes of tin per annum over 12 years. The current PFS aims to boost this output to between 3,000 and 3,500 tonnes per annum over the first 6 to 10 years, a substantial increase that would position Heemskirk as a significant player in the global tin market.
Incentives and Strategic Alignment
As part of the MOU, Stellar has granted Hartree 40 million options to acquire fully paid ordinary shares at an exercise price of $0.0225, valid for two years or until certain conditions are met. This equity incentive aligns interests and underscores the collaborative nature of the agreement. However, it is important to note that the MOU is non-binding, and the parties have a six-month window to evaluate the feasibility and commercial terms of any potential transaction.
Looking Ahead
Stellar’s strategic move to potentially utilize the Avebury plant reflects a broader trend in the mining sector to maximize existing infrastructure and reduce environmental and financial footprints. If successful, this could accelerate Heemskirk’s path to production and enhance its economic viability. Yet, uncertainties remain, including the technical challenges of adapting a nickel processing plant for tin and the evolving nickel market dynamics that impact Avebury’s status.
Bottom Line?
Stellar’s exploration of Avebury’s infrastructure could redefine Heemskirk’s development trajectory, but the next six months will be critical to turning potential into progress.
Questions in the middle?
- Can the Avebury plant be efficiently modified to process tin ore at scale?
- Will Stellar proceed with acquisition, toll treating, or a hybrid approach for Avebury?
- How will fluctuations in nickel prices influence the availability and cost of Avebury’s infrastructure?
