(44% with potential to increase to 100%)

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PRE-FEASIBILITY STUDY

Strike has completed a Pre-Feasibility Study (PFS) on its Apurimac Iron Ore Project, which focuses on the development of a 20 million tonnes per annum mining operation with iron ore concentrate transported by slurry pipeline to a new port at Tres Hermanas, near the town of San Juan.

Refer 23 July 2008 ASX market announcement entitled “Pre-Feasibility Results Confirm World Class Prospects for Apurimac Project in Peru”

The PFS has confirmed that the Apurimac Iron Ore Project has the potential to become a highly profitable iron ore operation, with:

• Average operating costs (OPEX) of approximately US$14.50 per tonne
• Total capital cost (CAPEX) of approximately US$2.3 billion
• High quality product grading +68% Fe, very low in alumina, phosphorous and other impurities

As a consequence of the recent settlement with D&C Group and MAPSA (Positive Settlement of Disputes in Peru), Strike Resources Limited is undertaking a review of its objectives, plans and timetable with respect to the exploration and development of the Apurimac and Cozco Iron Ore Projects.

JORC RESOURCE

The resource estimate completed as part of the PFS has provided a significant re-rating of the resource on two Apurimac concessions, from a JORC Inferred Iron Ore Resource of 172 million tonnes at 62.28% Fe to a JORC Indicated Resource of 133.5 million tonnes at 59.40% Fe:

RAILWAY TRANSPORTATION STUDY

Strike has received the results of a Railway Transportation Preliminary Engineering Study (as an alternative to the slurry pipeline central case under the PFS); the key findings are as follows:

• CAPEX for the railroad option is estimated at ~US$2.167 billion (excluding contingencies and Engineering, Procurement and Construction Management (EPCM) costs);
• The total length of the railway from Apurimac to the preferred port site at Tres Hermanas on the Pacific coast is estimated at 558 kilometres; and
• The slurry pipeline option therefore, is presently the most cost effective means of transporting iron ore from Apurimac to the coast. 

LUMP IRON ORE STUDY

Strike has also undertaken a preliminary and basic transportation study examining the feasibility of mining up to one million tonnes per annum of high grade lump iron ore from its Apurimac project area using road transport to the existing port of San Nicholas.  The study has indicated an estimated capital cost of approximately US$49 million and an estimated operating cost of US$76.31/tonne.

Having reviewed these figures and based upon current and projected prices for the proposed iron ore product relative to estimated operating costs, Strike does not believe road transport of lump iron ore from the Apurimac project area presently represents an economically viable proposition.  As such Strike does not believe it is appropriate to conduct any further work on a lump iron ore mining operation utilising road transport from the Apurimac Project area.

Refer 11 February 2009 ASX market announcement entitled “Completion of Peru Lump Iron Ore Transportation Studies”