The company holds a 44% stake in the project through its shareholding in project owner Peruvian company Apurimac Ferrum, but has the potential to increase this to 100%.
Some of the options include construction of either a 10 or 15 million tonne per annum slurry pipeline, or transport to the coast by rail.
By the second half of the year the company should have a better idea on the development options.
A prefeasibility study (PFS) completed in July 2008 looked at development of a 20Mtpa mining operation with iron ore concentrate transported to the coast for shipment via a slurry pipeline and returned a capital cost of $US2.3 billion ($A2.58 billion).
The proposed operation was based on mining 26Mtpa of run of mine material grading 57.5% iron ore, with an average recovery of 70% which produced a 68.02-68.28% iron ore concentrate.
The PFS also confirmed average operating costs of around $14.50/tonne and a high quality product grading plus 68% iron ore, with low alumina, phosphorous and other impurities.
This follows a recent doubling of the resource on the property at the Opaban 1 and Opaban 3 concessions to 269.4Mt from 133.5Mt at 59.4% iron ore – 142.2Mt at 57.84% iron ore in the indicated category and 127.2Mt at 56.7% iron ore as inferred.
Previous thinking that the Opaban 1 deposit comprised several isolated pods of mineralisation has since been refuted through further work undertaken by SRK Consulting.
The group completed the resource estimate using 100m projections from known drill hole intersections, rather than the 25-70m projections used previously.
The net result was significant additional inferred resources at the deposit.
Contained within the resources at the deposit is a potential direct shipping grade (DSO) component of 198.7Mt, comprising a 104.48Mt indicated resource at 59.43% iron ore and a 94.2Mt inferred resource at 58.52% iron ore.
The balance of the iron ore in the resource requires minimal beneficiation to upgrade to a 68% iron ore concentrate.
The company is now planning a 19,000m reverse circulation drilling campaign at Opaban 1 and 3 concessions to try and upgrade the resource further.
It has set itself a target of 350-450Mt at both concessions, as well as from the Cristoforo and Pampachiri areas.
At Opaban 1, Strike will be targeting extensions at depth to follow up a number of previous holes that terminated in mineralisation.
A detailed assessment of potential iron ore mineralisation in the remaining 68 Apurimac concessions is also underway where surface sampling has shown high grade outcrops in numerous locations.
The company’s shares were trading 7.58% higher this morning at A71 cents.
