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Estrella Resources (ASX:ESR) has become the first foreign entity to be granted mining acreage in Timor-Leste under that country’s new mining laws enacted in 2021.
Estrella established a JV company in Timor-Leste earlier this year in June on a 70/30 split in Estrella’s favour with another entity called Murak Rai Timor. In 2023, Estrella and two other companies – publicly listed Beacon Resources and private Iron Fortune Pty Ltd – won early-stage concessions in a tender round.
It appears the Timor-Leste government is most enthusiastic about Estrella.
The 2024 JV deal became the subject of a Timor-Leste governmental media release with the country’s Minister of Petroleum and Mineral Resources Fransciso da Costa Monteiro present for the signing of ratifying documents. That deal effectively handed Estrella three mineral blocks in the Lautem municipality.
Today’s deal was celebrated with another face-to-face meet between Estrella’s management and the country’s minerals agency chief, Rafael de Araujo.
On Friday, the company confirmed it’s added another four tenements in the Baucau municipality covering a total area of 194sq.km through a “direct grant process.”
Estrella reported its new tenements, based on “initial work,” show some of the best mineralisation seen to date within eastern Timor-Leste. The company also noted that alongside its JV partner, it’s now the largest concession holder in the nation, with a total landholding of 698sq.km.
For context, Timor Leste’s total area is some 15,000sq.km. Estrella Resources MD Chris DawS described the move as a “massive step” for the company.
“Not only were we the first company to be awarded concessions under the 2023 Tender Process, but we are now the very first company to achieve direct grant of applied concessions under Timor-Leste’s 2021 Mining Code,” Daws said.
“This is a major vote of confidence by the Timor-Leste Government in Estrella’s ability as an exploration group and further highlights their commitment to developing a strong mining industry in the country.”
In the background, Timor-Leste is attempting to establish its own sovereign minerals supply capacity like the rest of the world in our complicated post-COVID geopolitical landscape.
A now-deleted webpage on the Austrade website – according to the Wayback Machine, removed only days ago – outlined the general value proposition present in Timor-Leste right now for Australian explorers: “Timor Leste is an emerging and exciting under-explored minerals jurisdiction,” Austrade wrote.
The country was formerly known as East Timor, which the US recognised as independent in 2002 following 23 years under Indonesian occupation.
As for Estrella’s shareholders, however, they appear to be risk-off on Friday’s news – the stock dropped -7.14% in the first hour of Friday trades.
ESR last traded at 1.3cps.
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