Home / World News / Strike joins elite club of Pilbara iron ore producers

Strike joins elite club of Pilbara iron ore producers

Strike Resources has broken out from the pack of Pilbara exploration juniors who dream of one day becoming producers after the company made the giant leap into production at its Paulsens East mine in WA’s Pilbara region.

The company has managed to mobilise an arsenal of gear to site that will be used to churn out its maiden stockpile of “lump” direct shipping iron ore.

An 18km long haul road that will link the operation to the public Nanutarra-Munjina Road public road infrastructure is almost complete and the ore will be stockpiled at the site and subsequently transported via the new road to Utah Point, a bulk-handling facility in Port Hedland for export.

Stage one of Paulsens East is fully-funded thanks to a US$7.2 million loan facility with international iron ore trading company Good Importing International. US$2.5m of that facility has now been drawn down as part of the deal.

The funds will be ploughed into the haul road’s completion and the initial development costs associated with the mine.

Strike says stage one of its recently revised multi-staged feasibility study for the initial 3.5-year venture will see it focus on the easily accessible high-grade, low strip ratio surface material.

The project will enable the company to retain a significant amount of capital by targeting the more economical material upfront, with a first-year forecast of as much as 400,000 tonnes of direct ship lump and fines product.

Lump quality product generally carries grades of around 62 per cent iron and given this is above the typical 59 per cent found in the fine material, it can fetch a higher price.

Importantly, Strike says metallurgical test work indicates over 75 per cent of its ore will be in lump form.

Remarkably, the company’s revised feasibility study forecasts a net cashflow of about A$138 million in the first 3.5 years of mine life and a net present value of about A$104 million, with an internal rate of return of 132 per cent based on an iron ore price of US$110 per tonne.

With per tonne spot prices of iron ore hovering around US$150, Strike’s timing looks to be exemplary – and its feasibility study is perhaps looking a little pale in light of the much higher market prices.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au

About brandsauthority

Check Also

Australia’s trade surplus dropped in August, marking second straight month of declines

Australia’s trade surplus dipped by $643 million in August to $8.3 billion, statistics show. Related

%d bloggers like this: