Investors have demonstrated their support for Strike and its iron ore projects in Peru and Western Australia by oversubscribing for a $5m share placement.

Proceeds from the placement of more than 22.8 million shares priced at 22c each will be used to double annual sales of high-grade direct shipping ore from its Apurimac iron ore project in Peru from 125,000t to 250,000t.

It will also be used to facilitate long-lead time items and pre-construction activities to compress timetables to production for the Paulsens East mine in WA.

Strike Resources (ASX:SRK) has brought a third, higher capacity, crusher plant on stream at Apurimac to increase production and has also engaged a fleet of 50 trucks for haulage with negotiations underway for a fleet of another 30 trucks to expedite trucking logistics.

It is now targeting a shipment of between 30,000t and 35,000t of 65 per cent iron ore in July 2021 with an estimated FOB cost of about US$70 to US$80 per tonne.

The company has also appointed Ausenco to review and update pre-feasibility studies for the project with the view of producing 15 million to 20 million tonnes per annum of 68 per cent iron concentrate through a slurry pipeline to the coast for export.

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 at strike.

Paulsens East

Strike is also progressing its Paulsens East iron ore project in WA’s Pilbara region with a final investment decision on track to be made in the third quarter of 2021.

The company has already placed an order for 13 Ultra Quad road trains for exclusive use at Paulsens East and will use part of the placement funds to secure various items of equipment related to transport, communications and mineral processing.

Time-critical water bore development works and communication infrastructure are also being scheduled ahead of the FID while construction plans are being finalised.

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.




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.