Strike Resources holds concessions approximating 70,000 hectares in Peru, in an iron ore province which has seen only minimal exploration to date. The concessions are in two key project areas – the Cuzco Project, which lies 80km south of the historic city of Cuzco, and the Apurimac Project, which lies 16km northwest of the town of Andahuaylas.

Strike is advancing a three-phase development strategy for its Peruvian iron ore assets:

STAGE 1:  2 Million Tonnes per annum from Cuzco 2009

The first phase involves a 2mtpa iron ore lump production operation from the Cuzco Project, which is scheduled to commence in 2009. 

Initial development at Cuzco will centre on surface mining of high grade (+60% Fe) hematite from outcrops and scree down to approximately 10m depth.  Resource delineation for this near-surface mineralisation is currently underway.

Ore will be trucked 275 kilometres through to a railhead near the town of Imata.  From there it will be loaded onto trains and railed 312 kilometres through to the existing port of Matarani.

STAGE 2:  20  Million Tonnes per annum from Apurimac 2012

Stage 2 will involve a 20mtpa concentrate/sinter operation from the Apurimac Project, which is scheduled to commence production in 2012.  A Pre-Feasibility Study for Stage 2 was completed in July 2008, which confirmed that the Project has the potential to become a highly profitable world class iron ore operation, with:

Ore mined from the Apurimac Project will be crushed, mixed with water and fed into a ~360km slurry pipeline and, on reaching the coast, will be dewatered and shipped to Asia/China in +150,000 tonne vessels.

Strike has identified a preferred port site, Tres Hemanas, for shipping the Apurimac iron ore concentrate/sinter.

Stage 3: Potential expansion to 40mtpa, adding 20mtpa from Cuzco in 2015

The third phase will see a ramp up in concentrate/ sinter production to 40mtpa through the development of a second mine at Cuzco. This phase is contingent on future drilling and resource expansion.

If sufficient resources are identified at Cuzco, it is envisaged that Strike will build a second slurry pipeline to join the Apurimac pipeline corridor; the operation will utilise the same port infrastructure as for Stage 2 of the Apurimac Project.

 Peruvian Exploration

Historical work in the Apurimac and Cuzco regions has principally focused on known iron ore outcrops, with little or no geophysical work conducted to determine the existence of sub-surface deposits.

Strike Resources believes that the Cuzco and Apurimac deposits are not isolated instances of large iron ore deposits and that significant potential exists for additional large iron ore bodies to occur under cover.

Accordingly, in the second half of 2007, Strike developed a geological model for the formation of large skarn based iron ore deposits in the Apurimac region, which led to Strike’s decision to more than double its concession holding to a total of ~70,000 hectares.

As a preliminary means of determining the extent of iron ore mineralisation in these concession areas, the Company undertook a reconnaissance mapping and sampling programme across eight concessions. This programme is ongoing and will upon completion provide a detailed surface outline of concessions in the Apurimac Project area.

In addition, in order to expedite the Company’s understanding of the regional geology, a 2,105 line kilometre helicopter-borne aeromagnetic survey was conducted in June 2008, with the aim of identifying one or more large bodies of iron mineralisation under cover.

Strike controls ~85 concession holdings in Peru, either directly or in Joint Venture through Apurimac Ferrum S.A, with a combined surface area of 70,967 hectares.