cuzco announcement, page-8

I have had this info sent through to me from a broker. Not sure if it is good news or bad news?

Strike Resources (SRK) $1.73
Recommendation: BUY

Event
SRK has provided an update on its Cuzco Stage 1 DSO roject in Peru.
The Company completed test work on drill core and a 400kg pit sample.
The Cuzco deposit outcrops over an area of approximately 500m x 600m, with an estimated high-grade resource potential of between 1-1.5Mt per vertical metre.
Lump yield varied from 38.3% in the drill hole to 69.5% in the pit sample. SRK estimate that it is more likely to be somewhere between the two.

Impact
Prior to this update, our Stage 1 NPV was A$361m. Following the below adjustments our NPV has decreased to A$303m:
1) Decreased our resource estimate from 30Mt to 14Mt.
2) Increased our estimated lump grades from 62% to 66% Fe.
3) Decreased our estimated lump yield from 90% to 54%.
Overall we believe the reported results confirm the high-quality metallurgical characteristics of the Cuzco lump product.

A scoping study for Stage 1 is currently being completed and following this test work we now look forward to potential off-take agreements for this 2Mtpa DSO operation.

Importantly, this operation is not infrastructure constrained and first production is slated for mid-2009.
The above adjustments to our estimates trimmed 9cps off our valuation for the stock. Price target is $6.69/share, we retain a BUY.