Strike says that a comprehensive settlement has been reached with its partners in Peru, through which all legal disputes regarding the Company’s interest in Peruvian company Apurimac Ferrum S.A. (AF) have been fully resolved.

Key details of the settlement are as follows: • All legal proceedings between the parties will be terminated. • Strike emerges from the settlement with a direct 44% equity interest in AF, an option to move to 63% for US$21.1 million and potentially to 100% through a ‘shootout offer’ mechanism which can be initiated at Strike’s election. • Strike’s liabilities to its partners D&C and MAPSA, totalling approximately US$24.25 million have been cancelled. Strike may instead, at its election, lend AF up to US$20 million over the next 3 years to progress development of AF’s iron ore concessions, secured with a first registered mortgage over AF’s mining concessions.

Strike Chairman Dr. John Stephenson said: “This is a very positive outcome for Strike. It concludes a frustrating episode for the Company during which partner disputes have delayed the advancement of an iron ore mine with world-class potential.

“With this settlement we have resolved our differences with our partners and can now move this project forward. The independent Pre-Feasibility Studies completed last year have shown that this project has the potential to become one of the world’s lowest cost producers of iron ore, with operating costs of ~US$16.50 per tonne of product.

“The settlement has removed a US$24 million liability from Strike’s balance sheet, established an agreed funding mechanism for AF with Strike holding sole security over AF’s valuable mining concessions and a mechanism to move to potentially 100% ownership of AF.”

Tags: Strike Resources Limited