The deposit forms part of the Heemskirk Tin Project in Tasmania, Australia's highest grade undeveloped tin project.
Best intersections from drilling include 6 metres at 1.05% tin from 288 metres (Upper Zone); 10 metres at 1.02% tin from 299 metres (Main Zone); and 2 metres at 2.13% from 322 metres.
Tin occurs as cassiterite with visible tin in the lower intersection.
By comparison, historical drill holes on the same section include 9 metres at 1.8% tin 50 metres up‐dip from the new hole; 14 metres at 1% tin 100 metres down‐dip from the new hole; and 4 metres at 0.5% tin in the Upper Zone.
Peter Blight, chief executive office, said: "This is an excellent result for the Severn deposit showing continuity of good tin grade and thickness in an area poorly defined by previous drilling.
"It also increases confidence in the consistency of the geological model, an important factor in achieving our objective of increasing the resource."
Eight diamond drill holes on 70 metre spacing, with intercepts of 10 metre per cent tin or higher, define the central Main Zone.
The hole just drilled lies near the centre of the 10 metre per cent zone, which is being targeted for closer spaced drilling to upgrade the Resource to the higher confidence Indicated category as well as the tonnage for this section of the deposit.
Importantly, there is good geological correlation between the drill holes in the Main Zone.
High grade tin mineralisation occurred in an upper zone at the top of the stock‐work with 288 to 289 metres averaging 4.67% tin.
However, a cavity from 289 metres to 290.7 metres followed by a 1.1 metre intersection averaging 1.6% tin from 290.7 metres suggests that the average grade could be much higher than the 1.05% tin.
The main zone averaged 1.02% tin over 10 metres from 299 metres with a high grade assay of 4.81% tin from 299 to 300 metres.
A third intersection of 2.13% tin over 2 metres from 322 metres was also recorded.
The next hole in the program, ZS124, is designed to intersect the Severn deposit on the same RL as the previous hole, ZS123, but 50 metres to the south on section 3650N.
The objective of this hole is to reduce the drill spacing to 50 metres between ZS123 and ZS110.
Another nine drill targets have been identified as a priority going forward.
South Severn target
ZS122 was drilled 100 metres to the south of Severn to test a magnetic target up dip from historic drill hole ZS92.
While the drill hole intersected Crimson Creek Formation and Montana Beds sediments, there was only minor development of pyrite stock‐work and trace tin mineralisation, with a best assay of 0.58% tin over 1 metre from 363 metres.
Stellar plans geological and structural mapping of the sedimentary Montana Beds to the south to locate similar structural targets to that at Severn.
Constrained inversion of the downhole magnetic susceptibility results from ZS121 and ZS122 is being undertaken to ensure that the original magnetic targets were adequately tested.
Today's results demonstrate the consistency of the geological model at Heemskirk which is an important factor in leading Stellar to an increased resource.
The company is rapidly advancing the high grade Heemskirk Project, and is aiming high to become Australia's second largest producer of tin.
A defining factor for Stellar is that Heemskirk is hosted within a known tin field, is located less than 20 kilometres from Australia's largest tin mine in Renison Bell, while also being supported by excellent existing infrastructure - including rail and road connections to Burnie Port.
Stellar has previously "tabbed" the completion of a resource upgrade in the March quarter 2013, which along with the 2013 completion of a Pre-Feasibility Study, should herald a re-rating of the company's current A$13.4 million market cap. and share price of $0.06.
Tin soared 22% in 2012, more than any other metal on the LME, after a severe contraction in supply - the worst since 2005.
Indonesia, the biggest tin supplier, is poised to ship the least metal in a decade, extending shortages into a fourth year at a time when surpluses are emerging for most other industrial metals.
Gains have continued into 2013 with the metal jumping 4.6% to $24,480. The supply gap is anticipated to widen, giving players like Stellar a strong hand in the tin market.
The company is highly undervalued on our EV/tonne comparison. This plus the recent strong increase in tin price and the looming shortfall should position Stellar to benefit. With these catalysts, Proactive Investors calculates Stellar to be worth closer to $0.095 - $0.10.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.