Strike nears cash flow with start of iron ore haulage at Apurimac
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Strike Resources is on track to export its first shipment of high-grade direct shipping ore from its Apurimac iron ore project in July, after starting haulage to a stockpile close to Pisco port.
Free On Board (FOB) costs — those incurred by the company for delivering the iron ore to the port with shipping to be borne by the customer — has been estimated at between $US70 ($92.51) and $US80 per tonne.
With iron ore prices trading around $US215/t for 62% iron ore, this bodes well for the company’s future cash flow from its Apurimac product in Peru, which is expected to command a premium given that it has a target grade of about 65% iron with low impurities.
About 50,000t of DSO ore has now being mined by Strike Resources (ASX:SRK) and is being crushed at two local plants located close to Apurimac and a new crushing plant close to Pisco.
The company is currently seeking to expand its truck fleet to ramp up the haulage of ore to the new crushing facility to help meet its targeted annualised sales of about 250,000t of iron ore.
“The commencement of haulage of ore to a stockpile area near the Port of Pisco is another key milestone in the development of the company’s 100% owned high grade Apurimac iron ore project,” managing director William Johnson said.
“With first shipment targeted for July, Strike is now focussed on building its local infrastructure in Peru to support an annualised production rate of 250,000 tonnes per year in the near term.
“Furthermore, the study being undertaken by Ausenco on the 2008 Apurimac project Pre-feasibility Studies is advancing well with the objective of outlining the world class potential of a large-scale iron ore mine from the Company’s concessions in Peru.
The company has drawn-down a further $US1m from its $US2m prepayment facility with its offtake partner Good Importing International.
Apurimac currently has a JORC resource of 269.4Mt grading 57.3 per cent iron with potential for further growth, given that the deposits are open at depth and along strike.
Work is currently underway to review and update the previous PFS to develop a viable business proposition for the creation of a world-class mine that will produce a very high-grade premium iron ore product for export.
Ausenco is currently finalising the review, which includes gap and trade-off analyses and an identification of opportunities to reduce project capex and increase project execution security.
Strike will then work with Ausenco to finalise the scope for the next stage of works to determine the capital and operating costs associated with a 15-20 million tonne per annum production profile of a 68% iron concentrate.
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.