Strike Resources is ready to blaze a path into production at the 1.5 million tonnes per annum Paulsens East iron ore project in the Pilbara after receiving the key mining approval for the deposit.
It will see Strike Resources (ASX:SRK) become Australia’s newest iron ore exporter from 2022, with just port and offtake negotiations to follow ahead of a final investment decision.
It is little wonder small cap iron ore companies like Strike are keen to get into production, with the market at its strongest since the early 2010s boom.
Prices dipped late last week but remain at incredibly strong levels of more than US$200/t.
In Australian dollar terms recent prices of upwards of $270/t have made the sector one of the most profitable commodity classes globally.
The mining proposal approved by WA’s Department of Mining, Industry Regulation and Safety is the last key approval Strike needed before beginning pre-mining activities at Paulsens East.
The company’s project management plan and native vegetation clearing permit have already been approved.
“The approval of the mining proposal by DMIRS for Paulsens East is a key milestone in the development of this exciting new iron ore project in the Pilbara,” Strike managing director William Johnson said.
“With the key permits for the Paulsens East Mine now received, Strike is focussing on securing the necessary port allocation to confirm export capacity for its iron ore, prior to making a final investment decision and targeting first shipment of ore in early 2022.
“With the mining proposal now approved, we will move as fast as possible to commence production at Paulsens East to take advantage of buoyant market conditions in the iron ore sector.”
Lump a premium opportunity at Paulsens East
The project has a number of factors that make a quick path into production possible, and advantageous.
With a probable ore reserve of 6.2Mt, Paulsens East has a four-year mine life at its nameplate 1.5Mtpa production profile. That is all DSO hematite ore, meaning it can be blasted into production quickly via open cut mining methods.
With a greater than 60% resource grade it will not need to be beneficiated, and as much as 75% of the product will be higher grade lump ore, a type of iron ore that generates a premium from steel milling customers because it does not require sintering in the refining process.
Strike is also shipping up to 250,000tpa of high grade 65% ore from a starter pit at its Apurimac project in Peru, with its first shipment of 35,000t expected to be loaded at Port Pisco from August 11.
It is progressing a review by consultants Ausenco of studies into a larger 15-20Mtpa magnetite operation at Apurimac.
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.