Strike Resources’ high grade Paulsens East iron ore deposit could be 50pc bigger than previously thought
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Special Report: An opportunity to substantially increase the size of its high-grade Paulsens East iron ore deposit comes at the right time for Strike Resources (ASX:SRK),
Strike is currently fast-tracking development of the low cost, high return Paulsens East project to take advantage of strong iron ore prices.
Now, recent field work has highlighted the prospect of extending the initial four-year mine life and enhancing overall project value significantly.
Recent field work, together with previous drilling at the tenement boundary, indicates that the high-grade iron ore at Paulsens East continues below cover for another 1.6km to the south.
This means is big potential boost to mine life, given the current resource of 9.6 Million tonnes at 61.1 per cent Fe is contained within a 3km strike length.
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The exciting thing is that the economics of the project – which will cost just $8.2m to build — are already very good.
Strike’s recently completed Revised Scoping Study outlines plans to produce 1.5 Million tonnes per annum of mainly 61 per cent Fe lump Direct Shipping Ore (DSO) product, for an initial mine life of four years.
The company forecasts net profit of between $82 million and $236 million — with a ‘base case’ of $150 million — over this initial four-year mine life.
This economic model does not account for any mining of iron ore from the potential 1.6-kilometre mineralisation extension.
Strike managing director William Johnson says the recent Revised Scoping Study confirms that Paulsens East could already be a very attractive project over an initial four-year life.
“In addition, there is a further three million tonnes of JORC Indicated Mineral Resource at depth, which may be mined should market conditions remain favourable and which would allow for an extended mine life,” he says.
“The potential for a significant additional extension of high-grade iron ore mineralisation along strike to the south east offers opportunity to potentially extend the mine life even further, which could enhance the Project value considerably”.
“The company is continuing to advance the development of Paulsens East towards development, with native title and mining licence applications and off-take discussions progressing well”.