TIDMSML
RNS Number : 1699Q
Strategic Minerals PLC
26 October 2021
26 October 2021
Strategic Minerals plc
("Strategic Minerals" or the "Company")
September Quarter 2021 Magnetite Sales and Cash Balances
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable
producing mineral company , is pleased to provide the following
update on the Company's cash position and ore sales at the Cobre
magnetite operation in New Mexico, USA ("Cobre") for the quarter
ended 30 September 2021.
Highlights
-- Strong annual Cobre sales continue at US$2.865m for the 12 Months to 30 September 2021
-- Group cash balance of US$0.564m as at 30 September 2021
Sales update: Cobre magnetite tailings operations
Annual Cobre sales for the year to 30 September 2021 continue to
be maintained at just under US$3m. The moderate decline is
considered to be mainly attributed to a spike in sales last year
linked to an increased demand for reinforced concrete, for which
magnetite is an input.
Sales comparisons on quarterly and annual periods to 30
September 2021, along with associated volume details, are shown in
the table below:
Tonnage Sales (US$'000)
---------------------------- -----------------------------
Year 3 months to 12 months to 3 months to 12 months to
Sept Sept Sept Sept
2021 10,259 48,237 607 2,865
2020 10,987 50,875* 632 2,991*
2019 12,704 41,246 755 2,408
* For comparison purposes, the US$0.75m of deposits forfeited by
CV Investments LLC ("CV") has been excluded.
Since the June quarterly report, there has not been any
significant news from the Receiver appointed by the US Securities
Exchange Commission in relation to the previously notified US$21.9m
arbitration claim by the Company's wholly owned subsidiary Southern
Minerals Group LLC ("SMG") against CV Investments LLC ("CVI").
As noted previously, the Receiver has, to date, identified over
US$8m in liquid assets relating to its receivership of CVI,
although there can be no certainty of what proportion of this could
be attributable to SMG if any at this time. The Company will update
the market with details as and when they are provided by the
Receiver.
Financials and Operations
At 30 September 2021, the Group's non-restricted cash balance
was US$0.564m (30 June 2021: US$0.734m).
While after tax profitability from Cobre continues to cover
corporate overheads and provide a small surplus of circa $0.2m
p.a., costs associated with moving forward both the Leigh Creek
Copper and Redmoor Tin Tungsten projects result in reducing cash
balances. With the Leigh Creek Copper Mine ("LCCM") expected to
move into production, and generate revenue, next year, subject to
finance, it is expected that this may not be the case in 2022.
To prudently ensure there is an adequate cash balance in the
Company at all times and to move the projects forward until they
become self-funding, the Company raised a further GBP 400,000
(gross) in October which included participation by directors Peter
Wale and John Peters.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"Cobre sales remain strong and the Company continues to move its
projects forward.
"The Company has had significant discussions associated with
debt style funding for the LCCM project and believes the rising
copper price will result in securing such funding to allow the
commencement of production at Leigh Creek which, subject to
finance, is expected to commence in the first quarter of 2022.
"
For further information, please contact:
+61 (0) 414 727
Strategic Minerals plc 965
John Peters
Managing Director
Website: www.strategicminerals.net
Email: info@strategicminerals.net
Follow Strategic Minerals on:
Vox Markets: https://www.voxmarkets.co.uk/company/SML/
Twitter: @SML_Minerals
LinkedIn: https://www.linkedin.com/company/strategic-minerals-plc
+44 (0) 20 3470
SP Angel Corporate Finance LLP 0470
Nominated Adviser and Broker
Matthew Johnson
Ewan Leggat
Charlie Bouverat
Notes to Editors
Strategic Minerals plc is an AIM-quoted, profitable operating
minerals company actively developing projects tailored to materials
expected to benefit from strong demand in the future. It has an
operation in the United States of America along with 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 likely to be highly demanded in the future.
In September 2011, Strategic Minerals acquired the distribution
rights to 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 aimed at supplying the
metals and minerals likely to be highly demanded in the future.
In May 2016, the Company entered into an agreement with New Age
Exploration Limited and, in February 2017, acquired 50% of the
Redmoor Tin/Tungsten project in Cornwall, UK. The bulk of the funds
from the Company's investment were utilised to complete a drilling
programme that year. The drilling programme resulted in a
significant upgrade of the resource. This was followed in 2018 with
a 12-hole 2018 drilling programme has now been completed and the
resource update that resulted was announced in February 2019. In
March 2019, the Company entered into arrangements to acquire the
balance of the Redmoor Tin/Tungsten project which was settled on 24
July 2019 by way of a vendor loan which was fully repaid on 26 June
2020.
In March 2018, the Company completed the acquisition of the
Leigh Creek Copper Mine situated in the copper rich belt of South
Austra lia and brought the project temporarily into production in
April 2019. The project has been granted a conditional approval by
the South Australian Government for a Program for Environmental
Protection and Rehabilitation (PEPR) in relation to mining of its
Paltridge North deposit and processing at the Mountain of Light
installation.
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