Road to production: Strike secures 21-year iron ore mining lease
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Special Report: Strike Resources (ASX:SRK) has been granted an initial 21-year mining lease for its advanced Paulsens East iron ore project.
Iron ore is booming, and Strike is set to take advantage.
The granting of the mining lease by the WA Department of Mines (DMIRS) will pave the way for Strike to lodge its mining proposal for formal approval to start mining.
It follows another big milestone — the recent execution of a Native Title Mining Agreement.
Strike is currently finalising the documentation for its mining proposal, as well as access agreements with various stakeholders for haulage and access roads and other infrastructure to support mining operations.
The economics of the high-grade, low-risk DSO Paulsens East project – which will cost just $8.2m to build — are very good.
Strike’s recently completed revised scoping study outlines plans to produce 1.5 million tonnes per annum of mainly 61 per cent lump direct shipping ore (DSO), for an initial four years.
The company forecasts net profit of between $82m and $236m — with a ‘base case’ of $150m — over this initial four-year mine life.
But there’s plenty of upside here. This economic model, for example, does not account for any mining of iron ore from a recently discovered potential 1.6km mineralisation extension.
This story was developed in collaboration with Strike Resources, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.