Strike closes in on final approvals for Paulsens East iron project
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Strike continues to progress its Paulsens East iron ore project towards approval, selecting important contractors and signing key access agreements.
The company has entered into Early Contractor Involvement (ECI) services agreements with the preferred contractors to provide drill and blast, mining, crushing and screening services, and civil works such as the haulage road and mine site.
Strike Resources (ASX:SRK) added that the final objection of one of its miscellaneous licences for the proposed haulage road has now been withdrawn, paving the way for the licence L47/934 to be granted during the next two to four weeks more.
Once this is granted and subject to Western Australia’s Department of Mines, Industry, Regulation and Safety (DMIRS) having no further issues with any technical or environmental aspects, it expects DMIRS to approval the Mining Proposal for Paulsens East shortly thereafter.
Additionally, the company has purchased ore sorting equipment at auction and secured further long lead time items.
“With the final objection to the haulage road miscellaneous licence now being withdrawn, the company expects to shortly have all of its necessary licences and permits required to commence operations at Paulsens East,” managing director William Johnson said.
“Strike is also very pleased to confirm the selection of its preferred contractors for the critical drill and blast, mining, crushing and civils aspects of the project.
“With Campbells Transport already selected as its preferred haulage contractor, the company has now selected all of its key contractors for Paulsens East.”
He added that securing the long lead time items and ore sorter are important steps as the company advances towards making a final investment decision for Paulsens East.
Paulsens East is expected to generate pre-tax cashflow of $167m over its first four years from production of 6 million tonnes of iron ore.
Internal rate of return and net present value, both measures of a project’s profitability, were estimated at 213 per cent and $140m respectively.
Dynamic Drill and Blast (ASX:DDB) have been selected for the provision of drill and blast services while Lucas Total Contract Solutions has been selected for the provision of mining, crushing and screening services.
Lucas will also undertake the civil works required for Paulsens East, including construction of the 18km haulage road from the mine site to Nanutarra Road, establishment of the Mining Operations Centre (MOC) and siteworks for the mining village.
Strike added that the acquisition of a second-hand ore sorter, ancillary materials handling and control room equipment together with conveyors has resulted in a significant saving in project capital costs.
The company plans to use specialised ore-sorters as part of its processing flowsheet, to assist with the optimisation of the production of high-grade lump ore from the mine.
Three ore-sorters are required to deliver the planned throughput for Paulsens East.
This article was developed in collaboration with Strike Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.