PERTH (miningweekly.com) – ASX-listed Strike Resources has inked a binding offtake agreement with iron-ore trading firm Good Importing International for all of the iron-ore being mined from the Apurimac iron-ore project, in Peru.
The offtake agreement would stretch for an initial two-year term, and incorporates a $2-million prepayment facility to fund first iron-ore on ship, and to allow Strike to accelerate plans to expand iron-ore sales to capitalise on the current strong demand and prices for high-grade lump iron-ore.
The prepayment facility is payable in three tranches, with an initial A$100 000 payable on the execution of the offtake agreement, and further $1-million on Strike’s confirmation of a 15 000 t stockpile of crushed ore at the mine site. The balance of the prepayment facility will become payable on a 20 000 t stockpile being delivered to the Port at Pisco.
“With the execution of the offtake agreement, Strike has secured both a long-term purchaser for the iron-ore being produced from its 100%-owned Apurimac project, as well as having received a financing source that lowers capital allocation towards its Peruvian operations,” said Strike MD William Johnson.
“It is a significant milestone for the company as it moves towards revenue generation in an environment of high demand and prices for premium iron-ore producers such as Strike.”
The company was expecting first ore on ship to occur in May or June this year, with an initial shipment of at least 30 000 t of Apurimac premium lump direct shipping ore, with an average grade of around 65% with low impurities.
Strike is targeting annual sales of some 125 000 t of iron-ore from specific portions of concessions comprising the Apurimac project, with potential existing to significantly expand sales through ore from multiple sites within the project, once steady state operations have been achieved.