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Estrella Resources inks landmark agreement with Timor Government

Estrella Resources managing director Chris Daws and MRT chief executive officer Jose Goncalves sign a landmark joint venture agreement in Timor-Leste. Credit: File

Estrella Resources (ASX: ESR) has inked a milestone joint venture (JV) and royalty deed with Murak Rai Timor (MRT), the State-run mining arm of the Timor-Leste Government, to explore for manganese, copper and gold in in that country.

The company will hold 70 per cent of the newly-formed venture that includes three exploration licenses covering a landholding of 121.5 square metres, with MRT holding the remaining 30 per cent.

Under the terms of the JV, MRT will remain free-carried for its share, while Estrella will be responsible for all costs until the completion and publication of a positive definitive feasibility study relating to a deposit on each of its licenses. MRT can then elect to transfer its 30 per cent interest back to Estrella and receive a two per cent royalty on net smelter in return.

Yesterday’s formal signing ceremony in Dili between Estrella and Murak Rai Timor to form Estrella Murak Rai Timor represents a significant milestone for our company in Timor-Leste.
Estrella Resources Managing director Chris Daws

MRT chief executive officer Jose Goncalves said the agreement represented an “exciting phase”, not only for his department, but also for the future development of the Timor-Leste mining sector.

It is understood that the only known previous exploration conducted on the leases dates back to WW2. But rather than sitting back on its heels, Estrella has immediately drawn up plans to start trenching and drilling the highly-prospective ground in an effort to quantify the extent of the high-grade manganese at each site and explore for meaningful occurrences of gold and copper.

Exploration by the company will zero in on the Noni formation that hosts three of its primary targets and where thick manganese-rich bands have been discovered just below the surface.

Management recently also discovered an old manganese stockpile dubbed “Japanese Port”, which is located on the coast and close to the exploration grounds. Two grab samples taken from the 30-tonne dump were sent back to Perth for analysis, with assays returning up to 58.1 per cent manganese.

Estrella also recently revealed that it had delineated the known strike covering all three licences by a further 66 per cent to 47km.

In September last year, MRT was spun out of the National Petroleum and Minerals Authority (ANPM) to form a separate department after the government enacted a new mining code in 2021 to help diversify the country’s economy away from its heavy exposure to the petroleum industry.

Earlier this year, Beacon Minerals signed a similar JV with MRT to explore for copper, cobalt and gold. In doing so, it paved the way for others by becoming not only one of the first companies to acquire leases in Timor-Leste since the nation’s independence, but also one of the first to sign a JV with MRT.

The government’s drive to open its economy up to foreign investment has been well planned, having previously become a signatory of the international Extractive Industries Transparency Initiative (EITI) – a voluntary scheme that works to stamp out corruption and enhance revenue transparency.

While Estrella may have been the beneficiary of some exhaustive work behind the scenes by others in the past few years to set up a transparent and fair mining jurisdiction in country, it now has the bit firmly between its teeth, a massive target to explore and the backing of the government. So, the company appears to have plenty of boxes ticked as it moves full-steam ahead.

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