Q3 Cobre Magnetite Sales and Cash Balance Update

RNS Number : 4320D

Strategic Minerals PLC

09 October 2018

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

9 October 2018

 Strategic Minerals plc

("Strategic Minerals" or the "Company")

September 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 30 September 2018, and to inform the market of cash available at the end of quarter. 

Sales update: Cobre magnetite tailings operations

Sales volumes at Cobre continue to remain strong, despite the suspension of minimum monthly sales associated with a major client's contract, as announced on 7 June 2018. Due to the strong sales and the arrangements put in place with Cobre's major client, the cash flow for the Cobre operation remained strong during the quarter with US$927,000 in cash generated from the assets. The sales figures for the quarter are above comparative historical sales figures that exclude Cobre's major customer as demonstrated in the comparison of current quarter sales of 10,304 tons as opposed to September 2016 sales of 7,686 tons.

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

	Tonnage			Sales (US $'000)
Year	3 months to Sept	12 months to Sept		3 months to Sept	12 months to Sept
2018	10,304	74,364		598	4,856
2017	25,539	57,279		1,744	3,707
2016	7,686	23,477		462	1,533

Financials and Operations

At 30 September 2018, the Group's non-restricted cash balance was US $1.773m (30 June 2018 US $1.988m). While, during the quarter, profits and cash were generated by Southern Minerals Group's 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 (totalling approximately $800,000), as well as covering corporate overheads (approximately $340,000).

Currently, the Company expects it will fund the remainder of its 2018 development expansion plans from internally generated funds and have significant surplus funds at the year end.

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

"The management of sales at Cobre has continued to provide the Company with significant after tax
cash which it has reinvested into progressing the Company's three other projects. This reflects the Board's desire to organically grow the Company, as much as possible, while progressing projects to points where markets can begin to fully appreciate their potential value. 

"With production expected to be re-started at Leigh Creek Copper Mine next year and work expected
to commence on a Pre-Feasibility Study for Redmoor, the Board feels confident that recognition of this underlying value is near-at-hand.

"The Board maintains its expectation for these activities to be fully funded from internal cash flows in 2018 and for there to be a healthy cash balance as at year end."

For further information, please contact:
Strategic Minerals plc		[phone]
John Peters
Managing Director
www.strategicminerals.net
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SP Angel Corporate Finance LLP		[phone]
Nominated Adviser and Broker
Ewan Leggat
Laura Harrison

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 September 2018, the Company entered contracts for the sale of certain CARE tenements that have been identified as gold targets.

In May 2016, the Company entered into an agreement with New Age Exploration Limited ("NAE") and, in February 2017, acquired 50% of Cornwall Resources Limited ("CRL"), the joint venture vehicle which owns the Redmoor Tin/Tungsten project in Cornwall, UK. In June 2018, CRL began its 2018 Phase 1 drilling programme aimed at further increasing the tonnage and grade of the high-grade tin-tungsten-copper resource, which presently stands at an Inferred resource of 4.5Mt @ 1.0% SnEq (as reported in the announcement "Redmoor 2018 Resource Update" dated 20 March 2018). Based on the encouraging Phase 1 results to date, SML and NAE, have approved additional drilling to further expand the size of the resource and upgrade a portion of it to an indicated, as opposed to inferred, status. These are prerequisites to commencing an investment quality pre-feasibility study in 2019. 

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.

 

END

 

 

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