Strike Resources swung to an $8.58 million FY2026 profit, largely through its stake in LE Minerals rather than iron ore operations. The company is also relying on a conditional Apurimac sale for cash while withdrawing its previously reported mineral resource estimate.
- $8.58 million profit after tax, versus a $2.87 million loss
- $10.99 million equity-accounted contribution from 27.7% LE Minerals stake
- Cash fell to $1.12 million after $3.13 million operating outflow
- Conditional $5.5 million sale would reduce Apurimac ownership to 51.48%
- Previous JORC mineral resource estimate withdrawn pending review and potential update
Profit swing masks continuing cash burn
Strike Resources Limited (ASX:SRK) has reported a sharp swing to profit, but the headline number owes more to accounting for an investment than to iron ore sales. The Perth-based company recorded an $8.58 million profit after tax for the year ended 30 June 2026, compared with a $2.87 million loss a year earlier, while operating cash flow remained negative at $3.13 million.
The main contributor was a $10.99 million equity-accounted share of profit from Strike’s 27.7% holding in LE Minerals Limited (ASX:LEL). LE Minerals reported a $48.17 million net profit for the year, although its financial statements also show a loss from continuing operations and a substantial contribution from discontinued operations. Strike’s result therefore does not represent cash generated by Apurimac iron ore production.
Cash fell to $1.12 million at year-end from $3.83 million, despite the reported profit. Net assets rose to $12.04 million from $3.78 million, largely reflecting the $10.79 million carrying value assigned to the LE Minerals investment. No dividend was declared.
Apurimac sale remains central to funding
Strike is counting on a conditional transaction with JE United Ltd to replenish its balance sheet. Under the agreement, Strike is selling a further 28.52% indirect interest in Apurimac Ferrum, the Peruvian company holding the Apurimac concessions, for $5.5 million. Completion would leave Strike with a 51.48% interest and provide about $5.4 million after the stated deduction for legal costs.
The transaction, first announced in the Apurimac stake sale, must satisfy or waive conditions by 16 March 2027, subject to agreement between the parties. JE United has paid a $200,000 deposit, but the remaining proceeds are not yet available to Strike.
Subject to completion, $7 million of capital contributions first being made to Apurimac and an iron ore marketing agreement being signed, JE United proposes to make a US$5 million credit facility available to the project. The proposed facility would support development, stockpiling and price hedging, while JE United would receive exclusive marketing rights until the facility and interest were repaid. The final facility and marketing documents were still being negotiated at reporting date.
Published mineral resource estimate withdrawn
The most consequential technical disclosure is less upbeat: Strike has decided not to publish a JORC-compliant mineral resource estimate in this year’s report. The previous estimate, announced in 2015, was not carried forward because the relevant Competent Person retired and the company no longer considered it appropriate to rely on that consent.
Strike also said artisanal miners may have extracted iron ore from parts of the concessions under Peru’s REINFO regime, and that it cannot assess the full extent of those workings. The company intends to review and potentially update the estimate as Apurimac advances. Until that work is done, the project’s current resource base is not stated in the annual report, leaving an important gap for investors assessing scale and mine economics.
Exploration and export plans move ahead
Strike completed geological mapping, surface sampling, LiDAR, magnetometry and gravity surveys across priority areas, with the stated aim of expanding resources and identifying near-surface mineralisation suitable for shorter-term production. It is preparing for a possible restart of small-scale mining targeting more than 60,000 tonnes of direct-shipping ore per month, but that remains a target rather than reported production.
Its non-binding San Nicolas port MOU, which was covered in the San Nicolas port MOU, provides a proposed export route with Naviera Petral. A definitive commercial agreement, technical studies and regulatory and community approvals are still required. Strike is also engaging with Peruvian authorities over the proposed Andahuaylas-Marcona railway, a process the company says has experienced delays amid political change.
Funding runway meets project uncertainty
The directors said the going-concern assumption remains appropriate, pointing to the LE Minerals holding, discretionary project spending and expected net proceeds from the Apurimac sale. That assessment is plainly sensitive to the transaction completing: at 30 June, Strike had only $1.12 million in cash and continued to spend on exploration and evaluation.
The next valuation question is therefore not simply whether Strike can report another accounting profit. It is whether the Apurimac sale completes, whether the proposed facility becomes binding, and what a refreshed resource estimate says after accounting for artisanal extraction. Until those pieces arrive, the company has a funding plan in prospect, but not yet a demonstrated operating base.
Bottom Line?
Strike’s profit improves the balance sheet on paper, but Apurimac’s funding and valuation still depend on a conditional sale, proposed debt and a replacement resource estimate.
Questions in the middle?
- Will the JE United transaction complete by 16 March 2027 and deliver the expected $5.4 million net proceeds?
- Will the proposed US$5 million facility and exclusive marketing arrangement become binding on acceptable terms?
- What mineral resource will Strike report after reviewing artisanal extraction and appointing a new Competent Person?