QUARTERLY REPORT
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COMPANY DETAILS ABN: 94 088 488 724
PRINCIPAL AND REGISTERED OFFICE
Level 2
23 Ventnor Avenue West Perth WA 6005
T (08) 9214 9700
F (08) 9214 9701
W www.strikeresources.com.au
E [email protected]
ASX CODE
SRK
SECURITIES ON ISSUE
145,334,268 listed shares
6,500,000 unlisted options
BOARD OF DIRECTORS
Farooq Khan
(Chairman)
William Johnson
(Managing Director)
Malcolm Richmond
(Non-Executive Director)
Matthew Hammond
(Non-Executive Director)
Victor Ho
(Director)
COMPANY SECRETARY
Victor Ho
[email protected]
FOR FURTHER INFORMATION
William Johnson
Managing Director [email protected]
29 July 2016
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QUARTERLY ACTIVITIES
Strike Resources Limited (Strike or Company) presents its Quarterly Report for the period ended 30 June 2016
As at 30 June 2016, Strike had net assets of ~$6.973 million (comprising ~$6.97 million gross cash less provisions/accruals/trade creditors of ~$0.003 million).
Update on Company Strategy
During the quarter, Strike continued to examine a range of strategies for the Company in light of the on-going poor outlook for the iron ore sector. In this regard:
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Strike has and is reviewing a number of resource opportunities in sectors (in Australia and overseas) where the Company believes that the current market conditions may present good buying opportunities or where there exists positive market sentiment;
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Further to the above, Strike has applied for a number exploration mineral concessions in Western Australia and Chile and are in discussions with a number of potential parties for Strike to acquire a joint venture interest in and or farm-in to existing mineral projects in Australia and overseas; and
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Whilst Strike has investigated a number of technology related ventures which could form the foundation for a new strategy for the Company, market sentiment in this sector has waned of late and Strike is now focusing more on the resource sector (as noted above).
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Strike renewed (on an annual basis) its 14 Peruvian iron-ore mineral concessions at a cost of ~$214k; and
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Strike commenced preliminary/conceptual desk-top studies to investigate a potential alternative value-add strategy in relation to the development of the Apurimac Project - this is consistent with Strike's recognition of the project as a potentially strategic asset in Peru which may, when market conditions improve, provide opportunity for the Company to recover value.
Update on Iron Ore Projects in Peru
During the quarter:
About Strike Resources Limited (ASX:SRK)
Strike Resources is an ASX listed resource company, owner of the high grade ApurimacMagnetite Iron Ore Project and Cusco Magnetite Iron Ore Project in Peru. Strike retains significant cash reserves and is presently reviewing alternative options with regard to utilisation of these funds.
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PROJECTS
Apurimac Iron Ore Project
Between 2006 and 2014, Strike's primary focus was on the development of its Apurimac magnetite project in Peru, recognised as one of the highest grade, large scale magnetite projects in the world with the potential to support the establishment of a significant iron ore operation.
Current adverse market conditions however have led the Company to suspend all development activities on this and its other iron ore projects in Peru.1
Nevertheless, the nature of the Apurimac deposit and the development work undertaken to- date define this project as a potentially strategic asset in Peru which may, when market conditions improve, provide opportunity for the Company to recover value.
The exceptionally high grade 57% Fe is almost twice as high as magnetite deposits developed in Australia; ore bodies are coarse grained and relatively soft, resulting in potentially cheaper processing costs once in production.
A prefeasibility study completed in 20082and updated in 20103on the Apurimac Project indicated clear potential for development of a world class iron ore project:
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JORC Indicated and Inferred Mineral Resource at the main Opaban I/III concessions of 269Mt of iron ore at 57.3% Fe (142 Mt Indicated Resource at 57.84% Fe and 127 Mt Inferred Resource at 56.7% Fe). Of this, potentially 67Mt of Direct Shipping Ore (DSO) at an average grade of 61.5% Fe has been identified.
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Mineralisation predominantly high-grade, coarse-grained magnetite providing comparatively high mass recoveries (>60%) at coarse grind size (>500 microns).
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Excellent exploration potential within current concessions with several targets containing ironstones grading >60% Fe in similar geological settings to the main Opaban concessions.
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Base case of 20Mtpa of concentrate produced by open pit mining and processing 20 - 27Mtpa of ore with transport of the high grade (>66% Fe) product to the coast via a slurry pipeline for drying and shipment to customers.
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Attractive life-of-mine operating expenses (2010) of US$17 - 20 per tonne of product.
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Estimated capital expenditure (2010) of US$2.6 - 2.9 billion, competitive with other major iron ore projects at the time.
Cusco Iron Ore Project
The Cusco project lies approximately 150km to the south - east of Apurimac and forms a potential secondary development target for the Company in Peru with an initial inferred resource estimate of 104Mt at 32.6% Fe.
Like Apurimac, iron ore mineralisation at the project is coarse grained and dominated by magnetite, with high grades recorded. Preliminary metallurgical tests indicate a concentrate grade of >65% Fe could be produced from this ore using conventional grinding and magnetic separation processes.
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Refer Strike's ASX Announcements dated 28 February 2014: Legal Injunction and Suspension of Operations in Peru, 13 March 2014 Lifting of Injunction and Strategic Review and14 April 2014: Exit from Peru
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Refer Strike's ASX Announcement dated 23 July 2008: Prefeasibility Results Confirm W orld Class Prospects in Peru
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Refer Strike's ASX Announcement dated 23 November 2010: Apurimac Project Update and Strike's December 2010 Quarterly Report
JORC MINERAL RESOURCES
The following JORC Code compliant (2004 and 2012) Mineral Resources estimates are as at the end of the quarter and currently:
Apurimac Iron Ore Project (Peru) (Strike - 100%)
The Apurimac Project has a JORC Code (2012 Edition) compliant Mineral Resource of 269.4 Mt, consisting of:
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Category
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Concession
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Density t/m3
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Mt
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Fe%
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SiO2%
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Al2O3%
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P%
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S%
|
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Indicated
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Opaban 1
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4
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133.71
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57.57
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9.46
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2.54
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0.04
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0.12
|
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Indicated
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Opaban 3
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4
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8.53
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62.08
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4.58
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1.37
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0.07
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0.25
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Inferred
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Opaban 1
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4
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127.19
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56.7
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9.66
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2.7
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0.04
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0.2
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Total Indicated and Inferred
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269.4
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57.3
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9.4
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2.56
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0.04
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0.16
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The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in Strike's ASX announcement dated 11 February 2010: Peruvian Apurimac Iron Ore Project Resource Increased to 269 Million Tonnes) and has subsequently been upgraded to comply with the 2012 JORC Code and disclosed in Strike's ASX Announcement dated 19 January 2015: Apurimac Mineral Resources Updated to JORC 2012 Standard.
Cusco Iron Ore Project (Peru) (Strike - 100%)
The Cusco Project has a JORC Code (2004 Edition) compliant Mineral Resource of 104.4 Mt Inferred Mineral Resource at 32.62% Fe.
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Category
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Concession
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Density t/m3
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Mt*
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Fe%
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SiO2%
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Al2O3%
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P%
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S%
|
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Inferred
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Santo Tomas
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4
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104.4
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32.62
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0.53
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3.19
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0.035
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0.53
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The information in this JORC Resource table was prepared and first disclosed under the 2004 JORC Code (in Strike's ASX announcement dated 17 June 2011: Cusco Project - Resource Estimate). It has not been updated since to comply with the 2012 JORC Code on the basis that the information has not materially changed since it was last reported.
LIST OF MINERAL CONCESSIONS
The following mineral concessions were held as at the end of the quarter and currently:
Apurimac Iron Ore Project (Peru) (Strike - 100%)
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Name
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Area (Ha)
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Province
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Code
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Title
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File No
|
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(1) Opaban I
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999
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Andahuaylas
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5006349X01
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No 8625-94/RPM Dec 16, 1994
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20001465
|
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(2) Opaban III
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990
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Andahuaylas
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5006351X01
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No 8623-94/RPM Dec 16, 1994
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20001464
|
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(3) Ferrum 1
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965
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Andahuaylas
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010298304
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No 00228-2005-INACC/J Jan 19, 2005
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11053798
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(4) Ferrum 4
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1,000
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Andahuaylas/ Aymaraes
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010298604
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No 00230-2005-INACC/J Jan 19, 2005
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11053810
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(5) Ferrum 8
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900
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Andahuaylas
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010299004
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No 00232-2005-INACC/J Jan 19, 2005
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11053827
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(6) Cristoforo 22
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379
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Andahuaylas
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010165602
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RP2849-2007-INGEMMET/PCD/PM Dec 13, 2007
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11067786
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(7) Ferrum 31
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327
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Andahuaylas
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010552807
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RP 1266-2008-INGEMMET/PCD/PM May 12, 2008
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11076509
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(8) Ferrum 37
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695
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Andahuaylas
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010621507
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RP 1164-2008-INGEMMET/PCD/PM May 12, 2008
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11076534
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(9) Wanka 01
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100
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Andahuaylas
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010208110
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RP 3445-2010-INGEMMET/PCD/PM Oct 18,2010
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11102187
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(10) Sillaccassa 1
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700
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Andahuaylas
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010212508
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RP 5088-2008-INGEMMET/PCD/PM Nov 19, 2008
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11084877
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(11) Sillaccasa 2
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400
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Andahuaylas
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010212608
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RP 3183-2008-INGEMMET/PCD/PM Sept 8, 2008
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11081449
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Cusco Iron Ore Project (Peru) (Strike - 100%)
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Name
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Area (Ha)
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Province
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Code
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Title
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File No.
|
|
(1) Flor de María
|
907
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Chumbivilcas
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05006521X01
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No 7078-95-RPM Dec 29, 1995
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20001742
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(2) Delia Esperanza
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1,000
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Chumbivilcas
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05006522X01
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No 0686-95-RPM Mar 31, 1995
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20001743
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(3) El Pacífico II
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1,000
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Chumbivilcas
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05006524X01
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No 7886-94/RPM Nov 25, 1994
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20001746
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Paulsens East Iron-Ore Project (Western Australia) (Strike - 100%)
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Tenement No
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Status
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Grant Date
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Expiry Date
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Area (blocks/Ha)
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Area (km²)
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Retention Licence RL 47/7
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Granted
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4/12/14
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4/12/19
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~381 Ha
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~3.81
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Other matters:
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The Strike Group applied for a number of exploration mineral concessions in Western Australia and Chile during the quarter.
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No mineral concessions were acquired or lapsed during the quarter.
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The Strike Group did not enter into any joint venture or farm-in or farm-out agreements (in relation to mineral resource projects) during the quarter.