Strike Resources (ASX:SRK) diversified into battery metals when iron ore fell into the doldrums, but with the price picking up again, the junior explorer is now reconsidering the steelmaking commodity.

The company owns three iron ore projects – the Apurimac and Cusco projects in Peru and the Paulsens East project in Western Australia.

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Strike said the projects had not been developed for a number of reasons, but the principal driver was the significant decline in the iron ore price from over $US180 ($261.62) per tonne in 2011 to lows of less than $US50 per tonne in 2015.

But steadily increasing prices and a more favourable outlook has prompted Strike to take re-examine the market potential of its iron ore projects for potential early cash flow.

Iron ore has punched through the $US100-a-tonne mark and analysts are predicting iron prices will remain stronger for longer.

S&P Global Market Intelligence expects the seaborne iron ore market to record an even bigger deficit this year than previously thought – which should keep prices higher for longer.

The shortfall in supply came on the back of a second tailings dam collapse at another of heavyweight Vale’s iron ore mines in Brazil.

Deficits of 36 million tonnes and 11 million tonnes are now predicted for 2019 and 2020, respectively, before a return to a more balanced market in 2021.

Strike is now considering restarting work on the Paulsens East project to investigate the potential for an up to a 1-million-tonne-per-annum direct shipping ore (DSO) operation.

DSO refers to minerals that require only simple crushing before they are exported, which keeps costs low.

Initial work will include defining a resource on the iron ore mineralisation previously identified in surface sampling and two extensive drilling campaigns.

Strike will also investigate the potential for a small-scale, but high-grade mining operation of up to 125,000 tonnes per annum at its Apurimac project.


In other bulk news:

Venture Minerals (ASX:VMS), another junior player that recently decided to take a closer look at its iron projects, revealed today that it had upgraded the previous resource for its Riley project to JORC-compliance.

JORC refers to the mining industry’s official code for reporting exploration results, mineral resources and ore reserves, managed by the Australasian Joint Ore Reserves Committee. The resource stands at 2m tonnes at 57 per cent iron.

Coal miner Cokal (ASX:CKA) is undertaking an entitlement offer priced at 5c per share to raise $5.1m. The company’s major shareholder, Aahana Mineral Resources, is fully underwriting the offer, with the cash to fund the initial construction of its Bumi Barito Mineral (BBM) project in Indonesia.