Stellar Resources Limited [ASX:SRZ] Update Sept 2025
Metals & Mining
Strategic MOU on Avebury Plant Strengthens Heemskirk Development Pathway
We update Stellar Resources (ASX: SRZ) with a revised Target Share Price of $0.059, this represents a total upside potential of 193.0%, reflecting significant increase from the current share price of $0.020 and a 13.3% increase from the previous Target Share Price of $0.052 from our initiation report from July this year. This re-rating potential is underpinned by SRZ’s delivery of several key milestones, including the completion of over 10,016 metres of drilling at Heemskirk, high-grade depth intersections at Severn that demonstrate clear scope for resource growth and conversion, and the signing of a strategic MOU with Hartree over the Avebury Plant to evaluate access to nearby processing infrastructure. These achievements not only strengthen the outlook for the upcoming updated MRE and PFS in 2025–26, but also significantly de-risk SRZ’s development pathway and enhance its value proposition as a future capital-efficient tin producer in a market defined by rising demand and constrained global supply.
Strategic MOU Enhances Capital Efficiency & Upside
SRZ has signed a six-month, non-binding MOU with Hartree, Allegiance Mining, and Avebury (Operating) Pty Ltd, the operator of the Avebury Nickel Mine and Plant. Located less than 10km from Heemskirk, Avebury hosts a 900ktpa processing facility and tailings infrastructure, recently placed into care and maintenance after producing concentrates until March 2024. The agreement provides SRZ with the opportunity to assess existing infrastructure as a potential alternative to building a standalone plant, offering a pathway to lower capex and accelerate development. This aligns with the ongoing Heemskirk PFS, which is evaluating standalone, regional, and hybrid development options. Strategically, the MOU enhances SRZ’s optionality, improves capital efficiency, and strengthens its positioning as it works towards the updated MRE (2H 2025) and PFS (1H 2026).
Drilling Success Supports Upcoming MRE and PFS
SRZ’s ongoing drilling program at the Heemskirk Tin Project continues to deliver encouraging results, with 24 of 29 planned drillholes completed to date, totalling 10,016 metres drilled. The campaign is designed to do both - feed into the upcoming PFS and drive Mineral Resource growth through extensions and conversion of Inferred material. Notably, drillhole ZS187 at Severn intersected wide and high-grade tin mineralisation, including 64.4m @ 0.53% Sn from 560m and a standout interval of 10.2m @ 1.68% Sn, confirming strong continuity at depth and supporting resource conversion. The results highlight the dual focus of the program, de-risking the PFS while also building the case for resource expansion ahead of the updated MRE in 2H 2025.
Revised Valuation Underpinned by Strong Tin Fundamentals
We update our valuation for SRZ to $0.050 per share in the base case and $0.067 in the upside case with a Price/NAV of 0.34x. The broader tin sector is experiencing heightened corporate activity, reflecting strong underlying demand fundamentals and a tightening global supply backdrop. This wave of M&A highlights growing strategic interest in highquality tin assets, underscoring the commodity’s importance as a critical mineral. At the same time, the demand outlook for tin remains highly attractive. Around half of all tin is already used in electronics as solder, and future demand is expected to accelerate, as technologies such as EVs, robotics, energy storage, and renewables scale rapidly. Industry forecasts suggest that green-sector demand for tin could more than double by 2030, equivalent to nearly a fifth of current global consumption. Together, these dynamics represent a major tailwind and catalyst for the sector.