Positive Scoping Study for Tumblegum South

Star Minerals Limited (ASX: SMS, “the Company” or “Star Minerals”) is pleased to present the range of outcomes of a Scoping Study for open-pit mining and third-party toll treatment of the Tumblegum South gold deposit (“Tumblegum South” or “the Project”) which is located approximately 40km south of Meekatharra in the Murchison district of Western Australia.

The positive results of this Scoping Study provide a basis to refine material inputs and enhance project economics for the Tumblegum South gold deposit.

Study Highlights

• Various options utilising third-party processing plants operating under a toll treatment agreement were considered. There are currently two active processing plants with a radius of 50km to 150km from Tumblegum South. A range of outcomes were defined based on gold price, and processing cost including trucking costs.
• At gold prices from AUD$2,250 to AUD$3,000/oz, the Production Target for the Project ranges from approximately:
  • 116kt at 2.25g/t producing 7.6koz gold, to
  • 286kt at 2.00g/t producing 16.6koz gold.
• The Production Target generates an undiscounted accumulated cash surplus after payment of all working capital costs, but excluding pre-mining capital requirements, of approximately $7.2M to $16.3M.
• Mining is contemplated as a single campaign over approximately 18-months.
• Pre-mining capital and start-up costs are estimated to be approximately $0.7M to $1.5M.
• Sensitivity of the Base Case scenario to gold price was assessed. Results suggest that project economics are robust for a broad range of gold prices.

Chair Ian Stuart commented:

The Scoping Study has demonstrated the value and viability of the Tumblegum South Gold Project over a broad range of gold price. Star can now take the next steps to monetising this asset and more accurately assess various strategies to achieve this, including sale, partial sale or joint venture of the Project.

The Scoping Study also serves as basis for analysis by third parties wishing to evaluate the Project as potential ore feed for existing processing operations.

We look forward to building on the knowledge gained through this Study and rapidly advancing the Project to commercialisation.

Introduction

Star commissioned Orelogy Consulting Pty Ltd, a Western Australian based mine planning consulting firm with extensive experience evaluating mining projects across Australia, to undertake a Scoping Study evaluating potential open pit mining at Tumblegum South and ore processing via toll treatment at an existing plant.

The processing plants considered for this study are located within a radius of 50-150km from Tumblegum South. No agreement has been entered into at the time of writing, and there is no guarantee an agreement will be entered into. It is noted the diluted Tumblegum South Production Target at 2.01g/t compares favourably with head grade mined at a number of plants in the Murchison and has the potential to provide valuable mill feed and ore blending opportunities.

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