Price premium another big tick for Strike’s iron ore project
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Special Report: Strike Resources’ Paulsens East project in the Pilbara looks capable of delivering a premium iron ore product.
Metallurgical test work conducted on samples of ore collected from various locations around the project produced a “lump” product with 66 per cent iron content, low levels of harmful minerals such as sulphur, and low degradation during transport.
Strike Resources (ASX:SRK) said this lump product made up about 79 per cent of the material produced from the test work, which represents an exceptionally high ratio of lump to fines. Lump iron ore typically attracts a price premium compared to iron ore fines of the same grade.
This is further supported by the lump material having an average 2 per cent higher iron ore grade than the fines material, which has 64 per cent iron content.
By way of comparison, about 15 per cent of the iron ore sold by mining giant BHP Billiton (ASX:BHP) is a product called Jimblebar Fines that typically has about 61 per cent iron ore content.
“In all respects, the test work results are highly encouraging as they confirm the high quality of the resource at Paulsens East, with the potential for approximately up to 80 per cent of material being classified as lump and therefore likely to attract premium pricing compared to fines,” managing director William Johnson said.
“With the test work also indicating a higher specific gravity for the material than previously estimated, potential also exists for an increase in tonnage and a decrease in mining strip ratios.”
Early last month, the company upgraded the Paulsens East resource from 9.1 million tonnes at 63.4 per cent iron ore to 9.6 million tonnes at 61.1 per cent iron ore.
This was also converted from an inferred resource to a higher confidence indicated resource, giving the company enough information on the geology and grade to support mine planning.
Strike also increased the amount of the resource that is estimated to outcrop at surface by 50 per cent to 3 million tonnes.
This could translate into easier mining for the company as the outcropping material can be extracted using shovels and trucks, with the material then to be crushed and screened on site prior to transport by road to a suitable port facility for export.
Paulsens East is located in the extremely iron ore fertile Pilbara region – well known as the home to iron ore heavyweights Rio Tinto, BHP and Fortescue Metals Group.
Strike is investigating the potential for an up to a 1-million-tonne-per-annum direct shipping ore that will require only simple crushing before export, which keeps costs low.