Estrella Resources Secures Strategic Limestone Partnership in Timor-Leste

Estrella's Strategic Limestone Partnership: A Game-Changer for Timor-Leste Mining

Estrella Resources (ASX: ESR) has unveiled a transformative partnership that could redefine its commercial trajectory in Southeast Asia, with potential sales of up to 500 million dry metric tonnes of limestone over five years from its Timor-Leste concessions.

The binding Master Agreement with Indonesian mining services company PT Raka Energi Mandiri (REM) establishes exclusive marketing and offtake rights for limestone sales into Indonesia—a strategic move that complements Estrella's existing manganese exploration activities.

Limestone: The Unexpected Opportunity in Timor-Leste

What makes this Estrella Resources Timor-Leste limestone partnership particularly intriguing is how the company has identified a dual-commodity opportunity on its concessions. The company's geologists discovered that the Baucau Formation—a clean, coral and chalk-rich limestone—sits directly above the Noni Formation, which hosts the supergene manganese deposits the company has been targeting.

This geological relationship means Estrella can efficiently explore both resources simultaneously, as Managing Director Chris Daws explains:

"This is a truly transformational moment for Estrella and a major step forward in building a long-term commercial pathway from limestone production from our Timor Leste projects, alongside our existing manganese exploration."

The limestone deposits already show promising characteristics, with testing revealing:

• High calcium carbonate content
• Excellent neutralization value
• Low impurity levels
• Proximity to coastal infrastructure

A Performance-Based Partnership Structure

What stands out about this agreement is its alignment of interests. Rather than a traditional fixed-fee arrangement, Estrella has structured a performance-based incentive system:

• REM receives exclusive marketing and offtake rights for limestone sales to Indonesia
• Estrella will grant REM one unlisted share option (exercisable at A$0.05) for each tonne of limestone ordered and paid for
• This creates potential for up to 500 million share options if REM achieves the full sales target
• The agreement runs until the earlier of five years from first shipment or February 2035

This structure ensures REM is motivated to maximize limestone sales while giving Estrella shareholders clear upside potential if commercial targets are met. Similar to how Austin Metals identifies new gold targets to create shareholder value, Estrella is strategically positioning itself for growth through this partnership.

The Environmental and Industrial Value Proposition

The timing of this Estrella Resources Timor-Leste limestone partnership is particularly strategic given Indonesia's expanding nickel mining sector. Limestone's calcite content makes it valuable for environmental remediation in mining operations, particularly as an acid neutralization agent.

As REM Director Gregory Dhana N highlighted:

"Our Company looks forward to working with Estrella to provide a solution to help clean up the mining industry and the environmental problems that have arisen as a result of the huge demand of minerals utilised in the EV revolution."

The calcite market in Asia Pacific is projected to grow from US$5 billion in 2023 to surpass US$8.1 billion by 2032, driven by rapid urbanisation, infrastructure development, and growing environmental regulations. In fact, many resource companies are pursuing similar environmentally conscious approaches, such as Vital Metals' advancement of rare earth projects which also focus on sustainable extraction methods.

Understanding Calcite: The Industrial Workhorse

Calcite, the primary mineral component in Estrella's limestone deposits, is a naturally occurring form of calcium carbonate (CaCO₃) with diverse industrial applications:

For Indonesia's growing nickel industry, calcite's ability to reduce environmental risks during the leaching process makes it particularly valuable—creating a specialized market niche Estrella is now positioned to serve.

The high neutralisation value and low impurity content of the limestone samples from Estrella's concessions indicate they may be particularly well-suited for environmental applications, where purity is often essential for effective treatment processes.

Development Timeline and Next Steps

Before limestone sales can commence, Estrella must achieve several critical milestones within the Estrella Resources Timor-Leste limestone partnership:

The company has already begun community consultations and is in discussions with the Timor-Leste government regarding the project's significance for the nation.

Estrella is also considering using the existing port of Com as an interim export solution while developing a dedicated facility to handle the anticipated volume.

Commenting on the agreement, Murak Rai Timor E.P. President & C.E.O Jose Goncalves said:

"We welcome this exciting development opportunity to market Timor-Leste's limestone to our neighbouring country, Indonesia, with our joint venture partner Estrella Resources Limited R.P. We look forward in working closely with all parties as we embark on this significant opportunity to deliver solutions to Indonesia's mining industry growing environmental challenges."

Investment Thesis: Multiple Paths to Value Creation

This agreement represents a potential step-change in Estrella's commercial trajectory for several reasons:

1. Dual-commodity exposure: The same concessions now offer both manganese and limestone potential, maximizing asset value
2. Infrastructure advantage: The limestone deposits are located near coastal areas, minimizing transport costs
3. Strong regional demand: Indonesia's nickel industry creates a ready market for limestone's acid neutralization properties
4. Performance-based partnership: REM's incentive structure aligns interests with Estrella shareholders
5. Regional relationships: The partnership with REM provides access to established distribution networks in Indonesia

While still early-stage, the agreement demonstrates management's ability to identify complementary revenue streams from existing assets, much like high-grade Mexican silver gold results have created opportunities for other mineral exploration companies.

Why Investors Should Follow Estrella's Progress

The Estrella Resources Timor-Leste limestone partnership now presents a compelling exploration and development story with multiple potential value drivers:

• Near-term catalysts: JORC resource, scoping study, and permitting milestones all expected within the next 6-12 months
• Commercial pathway: Established offtake framework before production begins, reducing market risk
• Commodity diversification: Exposure to both battery metals (manganese) and industrial minerals (limestone)
• Regional advantage: Strategic position to serve Indonesia's growing environmental remediation needs
• Corporate validation: Partnership with established Indonesian mining services provider

During the past 12 months of exploration, Estrella's geologists have mapped the Baucau Formation, identifying significant exposures of clean limestones at surface in close proximity to the coast, power and road infrastructure. The company has already taken initial steps, importing nine samples from fresh sources within their tenements to Australia for testing of their chemical and acid neutralisation content.

The testing results suggest these limestone deposits could be particularly suitable for industrial applications requiring high-purity calcite. This positions Estrella to potentially supply a growing market for environmental remediation materials, especially as regulations around mining practices continue to tighten throughout Southeast Asia. Meanwhile, other exploration companies like Great Boulder Resources are also making strides in identifying valuable mineral resources across various regions.

Key Takeaway:
"Estrella Resources has positioned itself at the intersection of two valuable commodity streams in Timor-Leste, with a commercial pathway now established before production even begins. With multiple development milestones expected through late 2025, investors should closely monitor progress toward resource definition and regulatory approvals."

Furthermore, industry consolidation continues to be a theme in the mining sector, with companies like Inca Minerals gaining majority control in strategic takeovers, highlighting the importance of establishing strong market positions like Estrella has done with its Timor-Leste limestone partnership.

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