Resource companies can report profits from Investment accounting rather than operations. Strike Resources Limited (ASX:SRK) published its report for the year ended 30 June 2026 on 21 September 2026.

Company overview

Strike Resources Limited (ASX:SRK) is a Perth-based resource company, listed since 2000, whose principal activities are developing the Apurimac Iron Ore Project in Peru and investigating investment opportunities.

FY26 result

Total Revenue was A$11.28 million (A$255,590 a year earlier), and profit after tax was A$8.58 million compared with a loss of A$2.87 million. Cash fell to A$1.12 million from A$3.83 million, and net Assets were A$12.04 million. Strike carries a 27.7% investment in LE Minerals (ASX:LEL) as an associate worth A$10.79 million, using the Equity method, and LE Minerals reported a net profit of A$48.17 million.

Apurimac stake sale

On 16 March 2026, Strike agreed to sell a further 28.52% indirect interest in Apurimac Ferrum to JE United Ltd for A$5.5 million cash, less A$100,000 for legal costs, by selling Strike Finance, which holds 48.52% of Apurimac Ferrum. A A$200,000 deposit has been paid. Completion is subject to A$7 million of Capital contributions and an iron ore Marketing agreement, and JE United would make available a US$5 million Credit Facility with exclusive marketing rights until repaid.

Balance sheet and accounting treatment

The consolidated Balance Sheet at 30 June 2026 showed cash of A$1.12 million, an investment in the associate of A$10.79 million, exploration and evaluation expenditure of A$295,730 and liabilities of A$507,235, giving net assets of A$12.04 million compared with A$3.78 million a year earlier. Total expenses were A$2.70 million compared with A$3.13 million.

Because Strike holds 27.7% of LE Minerals and accounts for it as an associate, it recognises its share of that company’s profit or loss, which in this year was a large profit. This is a non-cash recognition and differs from cash generated by Strike’s own operations.

Terms of the Apurimac transaction

The sale is structured as a sale of Strike Finance, which holds 48.52% of Apurimac Ferrum, to JE United Ltd, taking JE United’s indirect holding to 48.52% when combined with its existing 20% beneficial interest. Strike will receive A$5.5 million including the deposit, less A$100,000 applied to JE United’s legal expenses.

JE United would also make available a US$5 million credit facility to Apurimac Ferrum after A$7 million of capital contributions and execution of an iron ore marketing agreement. Until the facility is repaid, JE United would have exclusive marketing rights for the project’s iron ore.

Sector backdrop

Peruvian iron ore development depends on permitting, logistics and financing, and marketing agreements can tie sales to a funder.

Iron ore projects in Peru depend on road and port logistics and on marketing arrangements with buyers, and smaller projects often rely on partners or traders for funding. Marketing agreements that tie sales to a financier can secure funding but limit flexibility.

Companies with associate holdings can report profits and losses that reflect changes in those investments’ results, so the headline result may differ from operating performance.

Risks shareholders should weigh

Profit mainly reflects the equity-accounted share of an associate rather than operating cash flow, and cash declined during the year.

The Apurimac sale is conditional, and the credit facility and marketing agreement terms were being finalised.

Selling interests reduces Strike’s share of project upside.

Strike’s cash balance fell during the year, and the company will need new funding or sale proceeds to support activities.

The Apurimac sale has conditions and the final terms of the credit facility and marketing agreement were still being finalised at reporting.

What’s next

Strike will work toward completing the Apurimac sale and conditions. Shareholders may wish to watch for completion and funding.

Completion of the Apurimac sale and the investigation of other resource opportunities are the main items for shareholders to watch.