Strike Resources’ bulk iron ore samples to advance marketing, test work
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Special Report: Strike continues to progress towards iron ore production with the mining of a 3-tonne bulk sample from a test pit at its high-grade Paulsens East project in WA.
The samples will be used to provide iron ore material reflective of the final direct shipping ore (DSO) product to potential customers as offtake discussions continue.
DSO refers to minerals that require only minimal processing such as crushing before they are exported, which keeps costs low.
Strike Resources (ASX:SRK) added that the bulk sample material will also be used for further metallurgical test work to optimise design of the mine crushing and screening circuit for production.
The test pit was excavated close to the eastern edge of the 3km-long outcropping hematite ridge that hosts the project’s indicated resource of 9.6 million tonnes at 61 per cent iron.
“The test pit excavation and bulk sample extraction are important steps in the advancement of the high-grade Paulsens East iron ore project,” managing director William Johnson said.
“The excavation clearly highlighted the bands of high-grade hematite iron ore which extend from the top of the ridge to depth and which make up the 3km-long outcropping ridge. Testwork on the sample material will allow us to optimise our final plant design and the production of Lump and Fines samples, which will be representative of our final products, will be important for concluding agreements with our potential customers”.
The mining of bulk samples comes on the back of Strike executing the Native Title agreement for Paulsens East in August.
It is currently waiting on the grant of a project mining lease before submitting a formal application for a mining permit.
This will pave the way for the company to develop the Paulsens East project, which comes with an accessible price tag of $8.2m to construct an iron ore mine capable of producing 1.5 million tonnes per annum of mainly 61 per cent lump iron ore for an initial mine life of four years.
And while net profit is forecast at between $82m and $236m – with a ‘base case’ of $150m – over this initial mine life, it is worth noting that the scoping study assumes a sale price of $US85/tonne, well below the current iron ore prices that are now over $US100/tonne.
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.