Strike signs second iron ore customer for Peruvian shipmentMatt...

Strike signs second iron ore customer for Peruvian shipment

Matt Birney

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Thu, 9 September 2021 6:14PM

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Strike’s high grade magnetite lump ore. Credit: File

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ASX-listed Strike Resources has found a second buyer of its high-grade Apurimac direct shipping ore within six shipping days of its Peruvian port.

The company’s second iron ore shipment will leave port in early October and Strike hopes the new South American based buyer will become a repeat customer. The savings from the shorter voyage will be significant, as the first shipment to China was a thirty-day voyage whereas the new buyer is only six shipping days away.

Strike’s premium grade iron ore is to be used by the buyer in an industrial trial for its steel manufacturing facility. According to Strike management, the buyer, who is not named, has a requirement for long term regular supplies of ore which could be potentially met by Strike from its high-grade Apurimac Project.

Strike has also reported that independent analysis taken during loading of its first shipment of ore bound for China confirmed the exceptionally high-grade nature and quality of its Apurimac premium lump magnetite ore, with an incredibly high average iron grade of 65.99 per cent FE and impurities of less than 4 per cent across the 35,000-tonne shipment.

Should this high grade hold up, Strike could be in for a hefty premium over the 62 per cent standard iron benchmark price currently clocking in at about US$160 a tonne.

The opportunity to sell our Apurimac Premium Lump DSO from Peru to a local South American steel mill offers significant benefits to Strike. In particular, the significantly shorter voyage time reduces shipping costs considerably and minimises pricing risk compared to sales to customers in China.

Strike Resources Managing Director, Will Johnson.

The unusually high-grade Apurimac magnetite deposit has a JORC compliant resource of 269.4 million tonnes, with 142.2Mt going 57.8 per cent iron in the indicated category and another 127.2Mt at 56.7 per cent iron inferred. Strike says the “exceptionally” high grade magnetite ore at Apurimac is almost twice as high as other magnetite deposits developed in Australia.

Management says the project also hosts untapped exploration potential as evidenced by highly encouraging drill results that include a broad 154 metre hit at an eye-catching 62 per cent iron.

Strike’s 7,500-hectare tenure in the Southern Highlands of Peru also hosts extensive gravity and magnetic anomalies that are yet to be drilled.

Historical work at Apurimac suggests the iron ore mineralisation has potential to take in as much as 700Mt at between 58 per cent and 62 per cent iron, according to the company.

To date, Strike has been mining a high-grade core within the deposit to front end the project’s cash flows. However, the company is evaluating the potential to develop Apurimac into a large-scale operation via on-going pre-feasibility work.

The pre-feasibility study is looking to build upon previous economic studies on Apurimac and will examine the potential for the project to host a 15 to 20Mt per annum operation using a slurry pipeline to transport a 68 per cent iron concentrate to the coast for export to China.

With a second potential long-term buyer lined up, Strike has joined an exclusive club of iron ore exporters and with plenty more ore in the ground and a potential premium price on offer for the high-grade core, Strike is now in real danger of making some money – and soon.

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Mate I know who I’d prefer to do business with….