Strike Resources (ASX:SRK) has been exploring the wider region around its Paulsens East iron ore project in Australia, where it has recently completed a scoping study, outlining a 4 year mine life with an average annual production rate of 1.5 million tonnes of direct shipping ore per year from the current 9.6 million tonnes resource.

Following up on the historical drill holes that had been completed in 2006 and 2008, Strike now also discovered high-grade iron ore zones about 1.6 kilometers to the southeast of the currently known high-grade iron ore outcrop. The new outcrop was sampled and returned a grade of 63.55% Fe while one drill hole intersected mineralization with an average grade of 60.8% Fe at a depth of 35 meters (unfortunately the thickness of the encountered mineralization was not published.

Strike will embark on a 2,000 meter drill program in 2020 to figure out how wide-spread the additional high-grade iron ore mineralization is, and what role it could play in the development of Paulsens East which is quite cheap to develop (with an estimated initial capex of just A$12M, resulting in outsized economic returns).

Disclosure: The author has no position in Strike Resources.

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