Navigating the New Mining Horizon: Estrella Resources' Strategic Turn to Timor-Leste's Manganese with Chris Daws
May 13, 2024
Andrew Musgrave
Discover the transformative potential of Estrella Resources' latest ventures as we sit down with Chris Daws, the company's Managing Director. Estrella's shift from nickel to the alluring Sauro Manganese discovery in Timor-Leste is not just a strategic pivot, but a narrative of adaptability and foresight in the mining industry. Join us for an episode that reveals how Estrella navigates the challenges of exploration in a region with no hard rock mining history, and the innovative steps they're taking, like mobilizing sample processing equipment to streamline operations and maintain cost-efficiency.
With Chris at the helm, we explore the intricacies of Estrella's operations, from the exciting initial findings of high-grade manganese that rival the world's best, to the company's foundational nickel projects in Western Australia that stand poised for development when market conditions permit. This episode isn't just about minerals and markets; it's a masterclass in strategic decision-making and seizing opportunities in the ever-evolving landscape of resource exploration. Whether you're an investor, industry professional, or simply fascinated by mining's bold frontiers, there's a wealth of insight waiting for you here.
Discover the transformative potential of Estrella Resources' latest ventures as we sit down with Chris Daws, the company's Managing Director. Estrella's shift from nickel to the alluring Sauro Manganese discovery in Timor-Leste is not just a strategic pivot, but a narrative of adaptability and foresight in the mining industry. Join us for an episode that reveals how Estrella navigates the challenges of exploration in a region with no hard rock mining history, and the innovative steps they're taking, like mobilizing sample processing equipment to streamline operations and maintain cost-efficiency.
With Chris at the helm, we explore the intricacies of Estrella's operations, from the exciting initial findings of high-grade manganese that rival the world's best, to the company's foundational nickel projects in Western Australia that stand poised for development when market conditions permit. This episode isn't just about minerals and markets; it's a masterclass in strategic decision-making and seizing opportunities in the ever-evolving landscape of resource exploration. Whether you're an investor, industry professional, or simply fascinated by mining's bold frontiers, there's a wealth of insight waiting for you here.
Andrew Musgrave:
Welcome to another episode of ASX Briefs. I'm your host, Andrew Musgrave, and today we are speaking with Chris Daws, the Managing Director of Estrella Resources. Estrella is a leading exploration company with key projects in Timor-Leste and Western Australia, including the recently announced Sauro Manganese discovery. Chris, thanks for joining us today and welcome to the ASX Briefs podcast.
Chris Daws:
Andrew, thanks for having me. It's a pleasure to be here.
Andrew Musgrave:
All right, plenty going on at the company at the moment, but I think, just to kick things off, can you just give us a brief overview of Estrella and some of the core focus of your exploration activities?
Chris Daws:
Yes, Andrew. So Estrella Resources is a WA-based exploration junior exploration company 7 million market cap. This is on the ASX, obviously, and we've been around since 2012. I've been involved with the company since 2017. And we've also, obviously, operations in Western Australia with nickel and our exploration sulphide projects out there, but also now taking a full pivot into Timor-Leste.
Andrew Musgrave:
And let's move up to Timor-Leste, because there's plenty of activity going on at the moment. Now, the results from the initial rock chip samples taken in Timor-Leste have been promising, so can you just elaborate on the significance of these findings and how they're going to impact the exploration plans?
Chris Daws:
Yeah, thanks, andrew. Good question. Obviously, the pivot to Timor by Estrella is a significant move for us. We sort of saw in the I guess looking out the windscreen, not out the back that nickel wasn't going to be the flavour going forward. So we took a pivot to Timor and, funnily enough, we've only been there and been on the ground for six weeks and we've found manganese.
Chris Daws:
Manganese in Timor has been documented previously and is well known. But the grades in Timor are exceptional. Think about Groote Eylandt as the world's highest grade manganese project, exporting plus 40% manganese, and we are in that realm. We're up in 35%, 40% manganese space and there's a lot of it. It's quite interesting ground. We've got 500 square kilometres up there. We increased it from 123 square kilometres in the initial tender rounds that Timor did late last year. So it was an inaugural tender that we bid in as a global tenderer and we were successful only one of two ASX listed companies. So extremely excited about being in Timor. The prospectivity is very high and obviously we've been on the ground six weeks already, made a significant manganese discovery.
Andrew Musgrave:
And if we can just touch on the operations and the infrastructure. So you're now mobilising, crushing and laboratory equipment to Timor to enhance the exploration and analysis. How will this operational setup benefit the exploration process?
Chris Daws:
Yeah, look, the infrastructure in Timor obviously is low. They've never had a mining industry in Timor-Leste or hard rock mining industry. So our initial samples came out in air freight, which is fairly expensive exercise when you're sending a few kilos of material down to Perth for assay. So we decided that there was a better way to do that. So we've exported some spore crushers and pulverisers and we'll pulverise our samples down to about a 200 gram sample and they'll be brought back through through standard custom means once we get the export paperwork done in Timor and then back down into the laboratories in Perth, but taking back very much smaller sizes. And we've got obviously the first component of that sample prep done in Timor at low cost. So that's important for us just to keep our costs down.
Andrew Musgrave:
All right, and just on the nickel projects, you've got the Carbide and the Spargaville projects in WA. How do these projects fit into the long-term strategy for Estrella?
Chris Daws:
Look they still sit in the portfolio. We still hold 100% of our nickel sulfide projects. Obviously, the outlook has been fairly dire for nickel with the Indonesian surpluses that have been pumped out in the last few years and look like they're going to continue, but they certainly remain in our portfolio. There will be some work done on those, hopefully in due course. We still have high priority targets that we generated mid last year through some excellent work geophysical work but we'll revisit that when the time's right. But they're still valuable assets and they still remain with the company.
Andrew Musgrave:
And if we take a bit more of a macro look at the market, how do you see the manganese markets evolving and the opportunities that may come up for Estrella in this landscape?
Chris Daws:
Well, that's a very good question, Andrew, and that's one of the things that I get excited about at the moment in what people say is you know, in all aspects of business is location, location, and then it's timing.
Chris Daws:
Timing is critical and we've probably lucked, in some degree, a position where the manganese market is about to explode and I don't think the market is fully aware of what's about to happen in the manganese market. But when you have 16% of the world's manganese come offline and that's Groote Eylandt South 32's operation in the Gulf of Carpentaria that has a significant impact on the world price of the product. So not only do they supply approximately 16% of the world's manganese, but they supply 50% of the world's high-grade manganese, and that's extremely important for the silicon manganese. But they supply 50% of the world's high-grade manganese and that's extremely important for the silicon manganese smelters because they need high-grade to keep their costs down and their input costs. So at the moment, we've seen manganese prices rally 34% in the last few weeks. I think that's going to be just the start and for us, being in Timor now, with the opportunity to access high-grade manganese, we're going to be in a very nice position, I think, going forward in the next few months and years ahead as we develop these projects.
Andrew Musgrave:
Okay, and just to get some final thoughts are there any plans for expanding exploration activities and what can shareholders look forward to over the remainder of 2024?
Chris Daws:
Yeah, look, indeed, we are expanding our operations in Timor. We've got a group now based in Timor. They're on the payroll. We've got two geologists and we're looking to expand that. Fortunately for us, timor does have a university that they've been running and graduates in geology have been being pumped out at Timor. Fortunately for them them there has been no roles for them. So we're looking to engage with those people and expand our Timorese National Geological Team and then, obviously, expand our operations, which we're already doing, with increases in land tenure. We've got 500 square kilometres. We will increase that, but we will increase the team as well, so we can get across the land and explore it as quickly as we can.
Andrew Musgrave:
Well, there's plenty going on, particularly up in Timor. So thanks for your time today and we look forward to more updates in the coming months.
Chris Daws:
Andrew, my pleasure. Thanks for having me and thanks for listening out there in the shareholder world.
Andrew Musgrave:
Excellent Thanks, Chris.
Chris Daws:
Thank you.
Andrew Musgrave:
That concludes this episode of ASX Briefs. Don't forget to subscribe and we look forward to catching you on our next episode.