June Quarter Magnetite Sales and Cash Balances

RNS Number : 3641U

Strategic Minerals PLC

12 July 2018

 

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12 July 2018

 Strategic Minerals plc

("Strategic Minerals" or the "Company")

June Quarter Magnetite Sales and Cash Balances

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to provide the following update on magnetite ore sales at the Company's Cobre magnetite operations in New Mexico, USA for the three months to June 2018, and to inform the market of cash available at the end of quarter. 

Sales update: Cobre magnetite tailings operations

Underlying sales volumes, excluding the reported suspension of a major client's contract, have been maintained and improved at Cobre with June 2018 quarter sales of US $0.696m (11,694 tons) compared to the June 2017 quarter (sales $0.602m, 10,446 tons).

The impact of the current suspension of sales by a major client is expected to be reflected in the September quarter comparisons. However, recent arrangements, agreed with this client, will see a net minimal impact on cash flow. Full year figures reflect the additional sales arising from the major client during the September and December 2017 quarters.

Sales comparisons on comparable quarters and annual periods to June 2018, along with associated volume details, are as below:

	Tonnage			Sales (US $'000)
Year	3 months to June	12 months to June		3 months to June	12 months to June
2018	11,694	89,599		695	6,001
2017	10,446	41,828		602	2,430
2016	4,839	19,474		329	1,320

Financials and Operations

At 30 June 2018, cash balances were US $2.088m (31 March 2018 US $3.110m). While, during the quarter, profits and cash were generated by Southern Minerals Group's ("SMG") Cobre operations, these were reinvested into works conducted by Central Australian Rare Earths Pty Ltd, Leigh Creek Copper Mine Pty Ltd and Cornwall Resources Limited, as well as covering corporate overheads. The decrease in net cash of US $1.022m principally reflected payments of US $0.978m to US tax authorities in relation to 2017 income tax and 2018 quarterly instalments.

In early July, SMG received a US $0.375m payment due from a major client as part of their suspension of sales. This reinforces the Company's expectation it will fund its 2018 development expansion plans from internally generated funds and, currently, expects to have surplus funds at the year end.

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"Underlying Cobre sales continue to underpin the Company's operations and existing resources are being reinvested to progress the Company's other exploration and development projects, most notably the reinstating of the Leigh Creek Copper Mine which is expected to return to production and deliver substantial cash flows for the Company in the second half of 2019.

"The Board maintains its expectation for this activity to be fully funded from internal cash flows."

For further information, please contact: Strategic Minerals plc		[phone]
John Peters
Managing Director
www.strategicminerals.net
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Notes to Editors

Strategic Minerals Plc is an AIM-quoted, operating minerals company actively developing projects prospective for battery materials. It has an operation in the United States of America and development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals being sought in the burgeoning electric vehicle/battery market.

In September 2011, Strategic Minerals acquired the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects orientated to supplying the burgeoning electric vehicle/battery market.

In January 2016, the portfolio was expanded with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd.

In May 2016, an additional exploration asset was acquired when the Company entered into an agreement with New Age Exploration Limited to acquire up to 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. This 50% acquisition was completed in February 2017 and a drilling programme completed in 2017 resulted in a significant upgrade of the resource.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 2019.

 

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