Strike Resources delivered an A$8.58 million full-year profit, but the result was driven largely by its equity-accounted investment in LE Minerals rather than operating cash generation. The company is also relying on a conditional A$5.5 million Apurimac stake sale to strengthen its funding position in Peru.
- A$8.58 million profit after tax, versus A$2.87 million loss
- A$10.99 million contribution from 27.7% LE Minerals stake
- Cash fell to A$1.12 million after A$3.13 million operating outflow
- Conditional A$5.5 million sale of further Apurimac interest
- US$5 million proposed project credit facility remains subject to conditions
Profit surge rests on LE Minerals investment
Strike Resources Limited (ASX:SRK) swung to an A$8.58 million profit after tax for the year ended 30 June 2026, reversing a A$2.87 million loss a year earlier. The headline improvement, however, came principally from accounting for Strike’s 27.7% holding in LE Minerals Limited (ASX:LEL), rather than from revenue generated by the Apurimac iron ore project.
Strike recognised A$10.99 million as its share of LE Minerals’ profit, after LE Minerals reported a A$48.17 million net profit for the year. That accounting contribution lifted Strike’s investment in the associate to A$10.79 million and helped take net assets to A$12.04 million, from A$3.78 million previously. It is an important balance-sheet gain, but it does not represent cash received by Strike.
Cash position remains the sharper test
Cash moved in the opposite direction to profit. Strike ended the year with A$1.12 million, down from A$3.83 million, after an operating cash outflow of A$3.13 million. Exploration and evaluation spending increased the draw, while the company declared no dividend.
The contrast leaves Strike’s reported earnings heavily dependent on the value and performance of its LE Minerals holding, while its own Peru-focused operations continue to consume cash. The directors said the company remains a going concern, pointing to its cash position, discretionary project spending, the LE Minerals stake and the expected proceeds from the Apurimac transaction.
Apurimac sale offers funding, but completion is pending
Strike has agreed to sell a further 28.52% indirect interest in Apurimac Ferrum to JE United Ltd for A$5.5 million, leaving JE United with an indirect 48.52% interest in the project once the deal completes. Strike expects to receive about A$5.4 million net, including a A$200,000 deposit already paid, after the specified deduction for legal costs.
The transaction is not yet banked. Conditions must be satisfied or waived by 16 March 2027, subject to extension by agreement, and the company has identified completion risk as a material uncertainty. The proposed structure also contemplates JE United making a US$5 million credit facility available to Apurimac, but only after A$7 million of capital contributions are made to the project and an iron ore marketing agreement is executed. Final terms for both the facility and marketing agreement are still being negotiated.
Exploration and export plans remain early-stage
During and after the financial year, Strike completed geological mapping, surface sampling, LiDAR, magnetometry and gravity surveys at Apurimac. It is preparing for a possible return to small-scale direct-shipping ore production targeting more than 60,000 tonnes a month, while continuing discussions on offtake, community access and the transfer of REINFO permits.
Strike is also considering a larger-scale mining permit, which would require an environmental impact assessment and mining study. A non-binding memorandum with Naviera Petral covers potential port services at San Nicolas, while discussions continue around the proposed Andahuaylas-Marcona railway. Those plans could improve the project’s export pathway, but they remain dependent on technical work, approvals, community arrangements, infrastructure and future funding.
Bottom Line?
The profit improves Strike’s reported balance sheet, but the next decisive events are cash-based: completion of the Apurimac sale, finalisation of the proposed credit facility and evidence that project funding can translate into production.
Questions in the middle?
- Will the A$5.5 million Apurimac sale satisfy its conditions before the 16 March 2027 deadline?
- Can the proposed US$5 million facility and A$7 million contribution requirement be converted into funded project activity?
- How will changes in LE Minerals’ value and asset-sale outcomes affect Strike’s liquidity and financial results?