TIDMSML
RNS Number : 4601D
Strategic Minerals PLC
20 October 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has
been incorporated into UK law by the European Union (Withdrawal)
Act 2018.
20 October 2022
Strategic Minerals plc
("Strategic Minerals" or the "Company")
September Quarter 2022 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 2022.
Highlights
-- July price increases boost September quarter revenue to US$0.653m (2021: US$0.607m)
-- Annual sales to the end of September 2022 (US$2.475m) were
slightly weaker than in the previous year (US$2.85m) reflecting
lower revenues prior to agreed pricing increases
-- Elevated transportation costs continuing to restrict geographical sales expansion
-- Group cash balance of US$0.381m as at 30 September 2022
-- Discussions with both equity and debt funders for Leigh Creek Copper Mine continue
-- Tungsten and Tin named as Critical Minerals and encompassed
within the UK Government strategy, providing the potential for
government assistance in developing the Redmoor mine
Sales update: Cobre magnetite tailings operations
On 1 July 2022, prices for material from the Cobre magnetite
stockpile were increased and are now reflecting in sales revenues.
There appears to be no adverse effect on sales volumes from the
price increase.
While the extension of access to the stockpile until 31 March
2027 has provided a platform from which SMG hopes to increase
future sales revenues, the current increase in transportation costs
has moderated those expectations.
Sales comparisons on quarterly and annual periods to 30
September 2022, along with associated volume details, are shown in
the table below:
Tonnage Sales (US$'000)
----------------------------- ----------------------------
Year 3 months to 12 months to 3 months to 12 months to
Sept Sept Sept Sept
2022 9,322 37,884 653 2,475
2021 10,259 48,237 607 2,865
2020 10,987 50,875* 632 2,991*
* For comparison purposes, the US$0.75m of deposits forfeited by
CV Investments LLC, in October 2019, has been excluded.
With regards to the claim on CV Investments LLC ("CVI"), the
Receiver has not taken any action yet on the likely distribution of
assets from CVI and has yet to file their "Omnibus Motion for Order
Resolving Disputed Creditor Claims", which they indicated was the
next step in the last status report of 1 August 2022. While the
Company initially felt it would receive a meaningful payment from
the distribution, given its position as an established creditor, it
now appears that, as the assets in CVI arose from the proceeds of
crime, the Company's claim and rank may not be as strong as
originally anticipated. As previously noted, the Company is not
including funds from the Receiver in its cash flow projections.
Financials and Operations
As at 30 September 2022, the Company's cash balance was
US$0.381m (30 June 2022: US$0.430m). The marginal fall reflects
continuing activity at both the Leigh Creek and Redmoor
projects.
Leigh Creek Copper Mine ("LCCM")
After receiving final PEPR approval for the mining of copper
oxide at Paltridge North, the Company has continued discussions
with potential debt and equity funders. While copper prices have
fallen around 22% from earlier in the year (US$4-50 lb to US$3-50
lb) this has been partially offset by the fall in the A$/US$
exchange rate (0.7300 to 0.6300). Accordingly, the net drop in the
forecasted Australian dollar revenue has been only 10% from the
peak of earlier this year.
Initial preparatory work and maintenance is being undertaken
ahead of the anticipated restart of production at LCCM subject to
receipt of funding.
Cornwall Resources Limited ("CRL")
With the inclusion of Tungsten and Tin on the UK Government's
Critical Minerals list, CRL has focused attention on funding
programs associated with the UK Government's Critical Minerals
Strategy. It appears that the Redmoor project can, potentially,
benefit from Governmental funding given it:
-- Falls within the UK Government's Critical Minerals Strategy;
-- Is anticipated to result in many well-paid jobs for decades in East Cornwall; and
-- East Cornwall being an area likely to benefit from the UK Government's "Levelling Up" policy.
At present, CRL is following up on potential sources of
government funding for the Redmoor project. Current plans for
Redmoor have been built around the Company's previously disclosed
limited drill plans, although these may be rapidly expanded should
additional funding be forthcoming.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"Sales revenue levels continue to provide operational support,
despite price increases.
"Efforts continue to secure funding for the LCCM restart but, as
yet, no binding commitments have been made.
"We are studiously preparing submissions for possible government
funding of the Redmoor mine and believe that this project aligns
well with the UK Government's plans for the Critical Minerals
sector."
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
September 2020.
In March 2018, the Company completed the acquisition of the
Leigh Creek Copper Mine situated in the copper rich belt of South
Australia and brought the project temporarily into production in
April 2019. In July 2021, the project was 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. In late September 2022, an updated
PEPR, addressing the conditions associated with the July 2021
approval, was approved.
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