Within the resource, the deposit also hosts a higher-grade core of 337,000t in the indicated category running at 2.52g/t for 27,000 ounces of gold.
A higher gold price in play now poses a strong argument for Star to look at an enlarged pit design, which could bring a further 16,000 ounces of the yellow metal into the mix.
Star Minerals chairman Ian Stuart said: “Star Minerals is delighted to secure funding for the next phase of development at Tumblegum South and welcomes the strategic investment and commencement of a relationship with one of the largest mining contractors in India.”
Star says that given the intense interest in the project, there is clearly a compelling case for getting the shovels on the move as soon as possible to capture some of the significant additional upside potential.
The company is mid-way through the environmental approvals process, which should be in hand in the next couple of months.
Star is also gearing up plans for exploration drilling later in the year, focusing on high-grade gold lodes previously spotted during a detailed desktop review of the deposit.
In tandem with the capital raising, the company revealed it has taken the tough decision to walk away from a deal to buy 85 per cent of the Cobra uranium project in Namibia for $6.25m in the face of stagnating investor interest for uranium projects across the board.
The move came after the company was also unable to agree new terms with the vendor, Madison Metal, to extend the date for payment of the US$225,000 (A$325,000) first payment, which was due last week.
On first flush, it’s disappointing news given Cobra has blue-riband credentials – just 5km from the boundary of the world’s longest-running uranium operation, the Rossing mine.
But even the darkest cloud has a silver lining.
By removing Cobra’s $6.25m price tag and the planned cost of making the 9-million-pound uranium deposit JORC compliant, Star has saved its shareholders from the sizeable dilutionary effect of issuing more than 100 per cent of its existing capital to pay for the project.
With negotiations for mining and production solutions in full swing and a strategic partner now on board, Star appears to be signalling its intent to make hay while the golden sun shines.
The capital raising has also recharged Star’s coffers in time for an extensive exploration drilling campaign in the next few months to test out new targets at site, aiming to grow the resource.
Star should be greatly encouraged by the recent huge success of companies such as Auric Mining and Horizon Minerals to unlock otherwise stranded deposits by toll treating mineralised ore.
As the company ponders the idea of going down the same path, punters are likely to keep a close watch on progress to see if Star can deliver on a similar development to generate some quick and handy cash flow as well.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
