Strike saves on shipping costs with second iron ore sales contract
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Strike has executed a sale contract with a South American steel mill for the second shipment of iron ore from its Aprurimac project in Peru.
The 15,000t industrial trial of premium lump direct shipping is expected to be shipped in early October with the company to receive full price for the iron ore.
Strike Resources (ASX:SRK) noted that a successful trial could lead to longer term regular offtake, which could result in significant savings in shipping due to the shorter voyage time of about six days compared to more than 30 days to China.
It added that independent analysis taken during loading of its first shipment of ore from Peru confirmed the exceptionally high-grade nature and quality of the Apurimac Premium Lump iron ore, with average iron ore grade of 66% across the 35,000t shipment.
“The opportunity to sell our Apurimac Premium Lump DSO from Peru to a local South American steel mill offers significant benefits to Strike,” managing director William Johnson said.
“In particular, the significantly shorter voyage time reduces shipping costs considerably and minimises pricing risk compared to sales to customers in China.
“Strike is also very pleased that the independent testing of its first 35,000 shipment of ore, which departed Peru earlier this month for customers in China, confirmed the exceptionally high-grade nature of its Apurimac Premium Lump DSO.”
Apurimac is located in Peru’s Southern Highlands and hosts a JORC Indicated and Inferred Resource of 269Mt of iron ore grading 57.3% iron.
This could be increased further with more exploration given the extensive undrilled gravity and magnetic anomalies, a point highlighted by a previous intercept of 154m grading 62% iron.
Strike currently uses trucks to haul direct shipping iron ore from Apurimac to port and has been ramping up operations to meet its targeted annualised sales of about 250,000t of iron ore.
Peru’s recent move to confirm plans for a 577km that will link the project with port of San Juan de Marcona could grant the company a large-scale transport solution that will drastically reduce the capital costs of turning the project into a world-scale mine.
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.