TIDMSML
RNS Number : 6208W
Strategic Minerals PLC
23 December 2021
The information contained within this announcement is deemed by
the Company to constitute inside information pursuant to Article 7
of EU Regulation 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) Act 2018 as amended.
23 December 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" or the "Project") and progress on
addressing the conditional elements of the Project's Program for
Environmental Protection and Rehabilitation ("PEPR").
Highlights
-- Focus of funding sought, while still expected at the LCCM
level, has moved to a convertible note/joint venture basis after
debt negotiations with a top global bank ceased
-- Company seeking US$10m at the LCCM level - approximately
US$6m for resumption of production and US$4m for copper oxide and
sulphide exploration
-- LCCM level funding is still expected within the project's
critical development path and is not considered likely to delay
expected 2022 resumption of production
-- Negotiations have been based on the Company's internal
forecasts of the Project's expected EBITDA of US$68m, reflecting a
US$4-25 lb copper price and an AUD/USD exchange rate of 0.7500
-- LCCM has applied for a South Australian government grant to assist planned drilling in 2022
-- Resubmission of PEPR details to the South Australian
Department of Energy and Mines ("DEM") almost complete and is
expected to be submitted to DEM in January 2022
-- Company is confident that, on the basis of work completed for
the PEPR resubmission, the Environmental Bond required is likely to
be reduced by a significant amount, although there can be no
assurances of this as the decision rests solely with DEM
Funding Update
As announced on 8 October 2021, the Company had been in
negotiations for a substantial debt facility from a respected
global bank. Ultimately, as a result of the high costs of a large
approved undrawn facility and the Company's current low market
capitalisation, these negotiations have now ceased. The advanced
nature of these discussions and a belief, at the time, that an
offer was imminent were announced by the Company to ensure all
potential investors had the same information regarding the LCCM
funding situation ahead of the equity raise in October.
As attempts to raise pure debt-based funding for LCCM have not
been successful thus far, the Company has shifted its emphasis to
funding involving an equity component. Accordingly, marketing has
refocused on a proposed US$10m convertible note facility at the
subsidiary level.
Marketing to potential investors is based on current market
conditions utilising a copper price assumption of US$4-25 lb and an
AUD/USD exchange rate of 0.7500. This produces an expected project
EBITDA of US$68m according to the Company's internal forecasts.
Initial marketing feedback has indicated that, in order to
ensure broader appeal, a minimum funding size of US$10m needs to be
sought and, with some investors, a planned liquidity event is
preferred. Accordingly, LCCM is currently seeking US$10m by either
a convertible note or equity investment and plans to apply such
funding to recommence production (approximately US$6m) and for
exploration costs (approximately US$4m).
The US$6m earmarked to recommence production, prior to receipt
of revenues, is made up of approximately:
Capital items including new leach pads US$1.0m
Mining prior to revenue commencement including pre-strip (4 months) US$2.5m
Environmental bond US$2.5m
The provision of additional funds will provide LCCM with the
ability to bring forward planned exploration drilling.
Drilling is expected to focus on two areas, namely:
a) Copper Oxide confirmatory drilling around the Mount Coffin
mineralisation, within LCCM's tenements. While there has been
historical assessment of the mineralisation, such drilling does not
qualify the mineralisation to the JORC (2012) standards. Twinning
of existing known holes will assist with the definition of a JORC
(2012) compliant resource which could extend the life of the oxide
operating project. The Directors believe this additional resource
could increase expected project EBITDA by up to US$40m.
b) Copper Sulphide exploratory drilling around a significant
intersection in a Bridge Minerals Pty Ltd's 1974 historical drill
hole PDH38. The drill hole, close to the Paltridge North ("PN")
deposit, was drilled to 183m and showed a high-grade copper
sulphide intersection from 137.2m to 144.8m with a 15-20% sulphide
component and copper grade of 1.34% (a PDF of the drill hole
results can be viewed at
https://www.strategicminerals.net/investors/presentations.html).
While exploration for additional copper resources within the
Adelaide Geosyncline in the northern Flinders Ranges has always
been a key strategy for LCCM, the current expected funding package
will provide the opportunity to undertake a staged exploration
programme more quickly.
Discussions with potential LCCM convertible note/equity
investors, to date, has made Management confident that funding is
likely to be achieved prior to final clearance of the PEPR for PN.
However, timing of the commencement of production and exploration
will be dependent on both regulatory approvals and sourcing
funding.
In anticipation of proposed drilling programmes at Mount Coffin
and around PN, LCCM has lodged applications with the South
Australian government for grant payments under its Accelerated
Development Initiative ("ADI") programme. If approved, LCCM could
receive grant payments of up to 50% of the drilling costs.
PEPR Update
Since July 2021, when LCCM received conditional approval for the
PEPR associated with LCCM's PN deposit and its treatment of
material at the adjacent Mountain of Light ("MoL") processing
facility, considerable work has been undertaken to satisfy the
conditions that DEM applied and LCCM anticipates that it will
resubmit the requested information in January 2022.
The work undertaken for this resubmission, through updating the
pit design, has seen the Project's expected profitability increase
through higher copper prices making more of the PN deposit
economically viable. Further, from both work undertaken and
consultation with members of DEM, it is the Company's strong belief
that the amount of the Environmental Bond, currently A$3.5m, can be
significantly reduced.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"The Company is confident that 2022 will see the recommencement
of production at Leigh Creek.
"Whilst it was felt that funding on a pure debt basis would have
produced the best result for our shareholders, the market was not
prepared to debt fund the Project at this time. Accordingly,
discussions involving equity linked funding, at the LCCM level,
have now commenced and considerable interest has been received to
date. It is for this reason that we feel that these funding
arrangements will be completed before the Project is "shovel
ready".
"Given that the response to the conditions of the July PEPR is
being lodged shortly with the DEM, it is considered that the
earliest LCCM will be in a position to recommence production is
March 2022 and this would be subject to all regulatory clearances
and funding being secured.
"Strategic Minerals is excited by the prospect of undertaking
drilling in 2022. Planned drilling at Mount Coffin is expected to
lead to an increase in LCCM's reported copper oxide JORC resource
and commence its long-term strategy to use cash flows from copper
oxide production to locate a substantial copper sulphide deposit in
this copper rich province. "
Competent Person's Statement
The expected exploration results in this announcement are based
on information compiled by Mr. David Larsen, who is a Member of the
Australian Institute of Geoscientists. Mr Larsen is the Principal
of D&J Larsen Consulting Pty Ltd and is a consultant to the
Company. He has sufficient experience relevant to the style of
mineralisation and type of deposit under consideration and to the
activity he is undertaking to qualify as a Competent Person, as
defined in the 2012 Edition of the Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves and a
qualified person as defined in the AIM Note for Mining and Oil
& Gas Companies dated June 2009. Mr Larsen has over 35 years'
Australia and international experience in exploration, mining
geology and resource estimation for gold, base metals and iron ore
deposits.
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 drilling programme 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
UPDZZMZZRFKGMZG
(END) Dow Jones Newswires
December 23, 2021 03:27 ET (08:27 GMT)
Strategic Minerals (LSE:SML)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Strategic Minerals (LSE:SML)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
