Strike scores again. Pic: Mark Evans via Getty Images
Strike marks key milestone as Paulsens East swings into production
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As milestones go, bringing a mine into production has got to take the cake and that’s exactly where Strike is at with its Paulsens East iron ore project in the Pilbara.
While the company is no stranger to iron ore production – it also produces iron ore from its Apurimac project in Peru – the addition of Paulsens East will be a big boost to its finances as the high-grade surface ore and outcrop with a low stripping ratio is expected to provide cheap cash flow, especially given current prices are around US$150 per tonne.
Strike Resources (ASX:SRK) is currently stockpiling lump direct shipping ore from the project ahead of an anticipated first shipment of up to 55,000t of ore in June 2022.
Other work needed to make this a reality is also progressing well with construction of the 18km haul road on schedule for completion in mid-May and contracts inked with Odell Mining Services to transport DSO iron ore to Utah Point in Port Hedland.
An agreement is already in place with the Pilbara Ports Authority allowing the company to export 200,000t of ore per financial year from Utah Point.
This is expected to be followed by a multi-user access agreement after PPA undertakes a site visit at Paulsens East in early May.
Screening of detritals and first stockpiles at Paulsens East. Pic: Supplied
Expansion plans and Peruvian progress
Paulsens East is expected to produce up to 2 million tonnes per annum of lump iron ore over a 3.5-year mine life under its second stage from a probable ore reserve of 6.2Mt at 59.9% iron and a broader Indicated Resource of 9.6Mt at 61.1% iron.
Cash flow from the first stage production is expected to bankroll the expansion, which is expected to export iron ore from the Port of Ashburton near Onslow, which will reduce the trucking distance by more than half.
Over in Peru, Strike has been mining high-grade surface deposits of DSO material from Apurimac by engaging multiple local miners, each of whom are permitted to mine up to 350t per day, or about 125,000t per annum.
It has completed two shipments of iron ore to date and is currently in discussions with a South American steel mill with regards to arranging their next shipment.
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.
