Strike Resources continues its charge towards production after clearing yet another crucial hurdle following the granting of its mining lease over the Paulsens East Iron Ore project in WA. The company’s mining proposal is now being finalised for submission and management says it is looking to begin shipping iron ore by early 2021.
Strike is a diversified development company with a range of assets in the iron ore and battery metals sectors. Its assets include the Solaroz lithium project in Argentina, the high-grade Apurimac and Cusco iron ore projects in Peru and its prized Paulsens East iron ore project in the Pilbara that it is rapidly advancing to production.
The grant of the company’s mining lease at Paulsens East comes soon after the execution of a Native Title Mining agreement with the traditional owners, the Puutu Kunti Kurrama and Pinikura People, on the 14th of August 2020.
The Paulsens East mining lease has now been granted by the Department of Mines, Industry Regulation and Safety for an initial period of 21 years and the company is now racing towards production to take full advantage of the burgeoning iron ore price.
Strike Resources Managing Director, William Johnson said:
“The granting of our Mining Lease is another key milestone for Company as we continue to make rapid progress in advancing the Paulsens East Iron Ore Project.”
Strike’s Paulsens East iron ore project is located on the southern margin of the high-grade Pilbara iron ore province which plays host to some of the world’s largest iron ore deposits. The project is located 140km west of Tom Price and a mere 8km from Northern Star’s company-making Paulsens gold mine.
The Paulsens East iron ore deposit outcrops over more than 3km of strike, lending itself to conventional open pit mining operation with a recent scoping study indicating that the operation will generate $150 million in free cash flow over a projected initial 4-year mine life based on a US$85 per tonne iron ore price. With iron ore now well over US$120 per tonne, those economics now look to be somewhat outdated.
Strike has defined a high-grade hematite resource at Paulsens East of 9.6 million tonnes at a premium 61.1 per cent iron oxide, with 6 per cent silica and 3.6 per cent alumina.
The company’s recent developments have included bulk sampling to generate parcels of ore for testing by potential offtake partners, ongoing discussions with the Pilbara Port Authority to secure space for export at Utah Point at Port Headland and the commencement of a feasibility study over the deposit.
Perth-based iron ore development specialists, Engenium, has been commissioned to supervise the Paulsens East Feasibility study and fast-track the deposit through to production. The results of the study are due to be delivered in the coming months and are expected to be the catalyst to catapult the project into production.
Strike is showing good timing in its run up to production with the iron ore price up more 50 per cent since April 2020. It is now trading at a very lucrative US$124 a tonne and with Strike’s mining lease now granted there looks to be very few spoilers for this project now.
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