PERTH (miningweekly.com) – ASX-listed Strike Resources has completed a A$5-million capital raise to fund work on its Apurimac iron-ore project, in Peru, and at its Paulsens East iron-ore mine, in Western Australia.
Strike would issue more than 22.8-million shares, at a price of 22c each, to raise the capital, with the placement completed within the company’s existing placement capacity.
The funds would mainly be used to ramp up activities in Peru, where Strike is advancing the production of direct shipping ore (DSO) from its Apurimac operation. Strike has also increased its annual sales target from this operation from 125 000 t to 250 000 t, given the current strong demand and premium prices for high-grade lump iron-ore.
Strike told shareholders that the increase in production would require further investment in site infrastructure, additional working capital to expand the mining operations, and potentially the acquisition of a dedicated crushing plant to speed up processing and reduce operating costs.
More than 30 000 t of high grade DSO has been mined at the project, and crushed at two local crushing plants, however, Strike noted that with the planned increase in mining production, the company has started crushing at a third, higher capacity plant located closer to the Pisco port. With the third plant now operating, the company is targeting first shipment of some 30 000 t to 35 000 t of DSO in July this year, at an estimated free-on-board cost of $70/t to $80/t.
Meanwhile, the funds raised would also go towards work at the Paulsens project, which is due for a final investment decision in the third quarter of this year.