TIDMSML
RNS Number : 4190O
Strategic Minerals PLC
08 October 2021
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.
8 October 2021
Strategic Minerals plc
("Strategic Minerals" or the "Company")
Leigh Creek Copper Mine
Funding and PEPR Update
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable
producing mineral company , is pleased to provide the following
update on the Company's progress in relation to funding of the
Leigh Creek Copper Mine ("LCCM") project and progress on addressing
the conditional elements of the project's Program for Environmental
Protection and Rehabilitation ("PEPR").
Highlights
-- Negotiations on the provision of a minimum US $10m loan
facility to LCCM, guaranteed by the Company, are being progressed
with a top global bank
-- The bank has been undertaking due diligence, although, at
this time, there is no guarantee of a loan being offered
-- Constructive meetings held with the South Australian Department of Energy and Mines ("DEM")
-- Issues identified by DEM relate to clarification and elaboration of comments in submitted PEPR
-- DEM confirmed desire to make PEPR unconditional as soon as
possible after information requested is provided
-- Scope identified to reduce size of environmental security
deposit, subject to LCCM's reasoned argument
-- Updated Mine Plan provisionally shows an additional 600 tons
of recovered copper (US $4.5m revenue) as increased copper prices
allow scope to economically expand the open pit footprint
-- Information requirements are being progressed and expected to
be submitted to DEM by the end of the year with operations, subject
to funding, now expected to commence during Q1 2022
Funding Update
The Company has been working with Aetas Capital and currently
has a respected global bank undertaking due diligence for the
provision of a minimum US $10m loan facility to LCCM, guaranteed by
the Company. At the end of the due diligence process, the Company
expects that a Letter of Offer will be issued, but this cannot be
guaranteed. While discussions have occurred on the likely term,
rates and fees, the decision on the provision of a facility and its
final parameters will not be concluded until the end of the
lender's due diligence. Aetas Capital continues to provide
information to other potential funders should this facility not be
forthcoming and the Board is confident funding will not further
impact the revised timetable to production.
PEPR Update
In July 2021, LCCM received conditional approval for the PEPR
associated with LCCM's Paltridge North ("PN") deposit and its
treatment of material at the adjacent Mountain of Light ("MoL")
processing facility (see RNS issued 12 July 2021). Since that time,
the management of LCCM, and its consultants, have held a number of
meetings with the DEM to clarify their information requirements and
confirm that the work LCCM is undertaking will adequately meet the
Department's needs.
At these meetings, it has been identified that some elements of
the requested clarifications are already covered in the submitted
PEPR but some additional details are being sought, particularly in
explaining the intended management of Potentially Acid Forming
material, the cover design and visual amenity associated with the
Paltridge North waste rock dumps and heap leach pads.
Throughout the Company's meetings with the DEM, they have
outlined their intention to assist making this approval
unconditional and have;
-- waived any re-submission fees; and
-- will be reviewing only the newly submitted material.
The DEM has stressed that, while assisting as much as possible,
this will be subject to ensuring the wider community is protected
in any future mining operations.
During its meetings, LCCM raised the potential to gradually
phase the amount of environmental security deposit held, in line
with planned operations. This would have the effect of lowering the
initial deposit currently required of AUD $3.7m and possibly reduce
the absolute size of the deposit should LCCM undertake
rehabilitation works as currently planned. The DEM indicated that
they would consider such a proposition and encouraged LCCM to
submit a fully reasoned request on the matter.
In commencing the initial work on the DEM resubmission, the
project's mine manager, John Speck, has identified that, at current
copper prices of in excess of US $4.00 lb (compared to US $2.40 lb
when PEPR was submitted), it is economic to enlarge the open cut
mine footprint which will potentially recover a further 600 tons of
saleable copper. In line with the Company's existing offtake
agreement, this could result in an additional US $4.5m of revenue.
Given the expected operating margin of 50% and the fact that this
would be recouped within two to three years, the Directors believe
this is a meaningful boost to the project's inherent value.
As a result of the discussions with the DEM, and after
contacting key consultants, LCCM has reviewed its expected
timetable to production and taken into account potential issues
that may arise given Covid-19 restrictions currently being applied
in Australia. In light of these considerations, LCCM now considers
that the information required by the DEM can be provided before the
end of the year and that operations, subject to receipt of finance
and DEM approval, can commence in the later part of the first
quarter of 2022.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"The Company is encouraged by the support shown by the
Department of Energy and Mines for mining and processing the
Paltridge North deposit.
"All efforts are being undertaken to get operations restarted as
soon as possible at Mountain of Light, Leigh Creek. However, the
need to meet additional DEM requirements and the impact of the
pandemic have been contributing factors to progressing the
recommencement of production.
"The Company expects that the due diligence being undertaken by
a respected global bank will lead to a Letter of Offer for a
minimum US $10m loan facility. Such funding, if concluded, would
not only permit the Company to recommence mining operations at LCCM
but, also, provide funds for exploration and expected ASX listing
costs. We will, of course, immediately update the market should we
receive a Letter of Offer. "
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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