Strike Resources targets ‘first ore on ship’ of up to 55,000 tonnes for July

A Multi-Users Access and Licence Agreement (MUA) with the Pilbara Ports Authority (PPA) has been executed for the export of 200,000t of iron ore per financial year by Strike Resources.

Around 55,000t of lump is now set for export by Strike out of Port Hedland come July, following a successful visit by PPA to the Paulsens East mine site in May 2022.

Strike Resources (ASX:SRK) plans to begin hauling Paulsens East Lump DSO into its allocated stockpile bunker at Utah Point in July 2022.

Talks set to continue

The company is in ongoing discussions with its marketing agent and project finance provider, Good Importing International Pty Limited (GII) about securing a sales contract with a Chinese Steel Mill customer for its maiden export shipments of Paulsens East Lump DSO.

Given the high grade of Strike’s proposed product and its predominantly lump composition, it is seeking to lock in sales contracts with Chinese steel mills that recognise the superior nature of Strike’s iron ore product.

Strike and GII are also exploring hedging arrangements to lock in a fixed sales price for its first shipment(s) to provide more certainty around cash flows and profits.

Keep on diggin’

Mining operations have continued during May and June with the excavation and screening of surface detrital iron ore on the northern slopes of the Paulsens East Hematite Ridge.

Notwithstanding several delays caused by rain, stockpiles of ore are being progressively expanded. Strike is targeting first shipment of approximately 55,000 tonnes of high-grade DSO material in late July 2022, subject to completion of the 18km private haulage road to connect the Paulsens East mine to the public Nanutarra-Munjina Road.

To date, the haulage road has successfully connected to the mining operations and the road train load out location at the mine site and construction of the haulage road is nearing completion.

Port of Ashburton approvals

Strike says it has been advised by the WA Department of Water and Environmental Regulation (DWER) that environmental approvals for the use of the Port of Ashburton for export of iron ore of up to 1.8Mtpa is well advanced.

The Works Approval for landside operations is also expected to be received shortly.

The Port of Ashburton is proposed as a longer-term export solution for Strike given it’s advantageous proximity to Paulsens East (~230km) versus Utah Point (~600km), leading to significantly lower trucking costs from mine to port.

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.