TIDMSML
RNS Number : 9670I
Strategic Minerals PLC
22 April 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.
22 April 2022
Strategic Minerals plc
("Strategic Minerals" or the "Company")
March 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 31 March 2022.
Highlights
-- Sales to Cobre's largest client, returned to normal levels in February and March
-- March quarter and annual sales (US$0.7m and US$2.5m) impacted by weaker January sales
-- Improved prospects for future sales due to 5-year extension
of access to magnetite stockpile until March 2027
-- Formal submission of claim to CV Investments LLC ("CVI") Receiver lodged
-- Group cash balance of US$0.615m as at 31 March 2022
-- Awaiting formal correspondence from South Australian
Government on the Leigh Creek Copper Mine ("LCCM") Programme for
Environmental Planning and Rehabilitation ("PEPR") conditions
-- Redmoor Exploration Licence extended to 2037
Sales update: Cobre magnetite tailings operations
February and March sales saw the reversal of the significant
fall in Cobre sales sustained during the December quarter of 2021,
which extended into January 2022. This reduction in sales was due
to a significant drop in demand from the Company's largest
client.
The subsequent rebound in sales appears consistent with the
major client's indication that they wished to rundown a significant
magnetite stockpile, established at their plant. This client's
demand resumed during February and March 2022 with purchases being
in line with previous years' demand for this period.
The Company considers that the recently announced 5-year
extension of access to the Cobre magnetite stockpile, until 31
March 2027, will provide a platform from which the Company's wholly
owned subsidiary, Southern Minerals Group ("SMG") hopes to use to
increase sales revenues.
Sales comparisons on quarterly and annual periods to 31 March
2022, along with associated volume details, are shown in the table
following:
Tonnage Sales (US$'000)
----------------------------- ----------------------------
Year 3 months to 12 months to 3 months to 12 months to
Mar Mar Mar Mar
2022 10,609 40,244 663 2,502
2021 13,002 51,567 771 3,032
2020 12,953 45,998 764 2,698*
* For comparison purposes, the US$0.75m of deposits forfeited by
CV Investments LLC ("CVI"), in October 2019, has been excluded.
In line with CVI's Receiver having established, through the
courts, a Bar Date of 25 April 2022 by which claims on CVI must be
made, SMG has now, formally, lodged its US$21.9m arbitrated claim.
It is anticipated that this process will lead to the Receiver
making a recommendation for the distribution of the assets, shortly
after the Bar Date. At this point, there can be no certainty of any
payment to SMG, but the Management and Board expect there will be
some distribution later this year.
Financials and Operations
At 31 March 2022, the Company's non-restricted cash balance was
US$0.615m (31 December 2021: US$0.611m).
Leigh Creek Copper Mine
The Company continues its dialogue with the South Australian
Department of Energy and Mines ("DEM"), and, at this point, the
Company is unaware of anything that will stop the removal of
current conditions associated with the PEPR granted in July 2021.
However, contrary to the Company's announcement on 5 January 2022,
the timeframe in which the DEM must respond is a guideline not a
statutory requirement, although the Board believe this response
should be received soon. Subject to receipt of required project
funding and DEM approval, Leigh Creek is expected to move into
production this year. Discussions with potential funders continue
and include a recent site visit. Management considers that the
removal of conditions currently associated with the PEPR will act
as a catalyst in determining the funding arrangements for the
project.
Cornwall Resources Limited
During the quarter, the Company's wholly owned subsidiary,
Cornwall Resources Limited ("CRL"), continued to receive grant
funding from prior claims related to the Deep Digital Cornwall
project. The claim cycle is ongoing, as work continues on lab
analysis of soil samples. Work is also progressing on the
interpretation and modelling of the gravity survey and CRL
continues to progress a General Permitted Development Order
planning authorisation from Cornwall Council for a potential drill
programme at Redmoor, to the west of the current resource, aimed at
near surface tin.
During the quarter, the CRL team successfully negotiated a 10
year extension to the Redmoor exploration licences, with maturity
now in 2037. This clearly establishes the Company's footprint in
the Cornish mineralisation region, which has recently been the
focus of increasing investor interest.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"The resumption of demand from the largest Cobre client combined
with the long-awaited formal extension of access for five years,
has placed the Company on a solid cash flow footing for the years
ahead.
"With an expectation of recommencement of operations at Leigh
Creek this year and ever greater focus on mining in Cornwall
combining with our licence extension, the Board and Management are
looking forward to a promising future for the Company in 2022."
For further information, please contact:
+61 (0) 414
Strategic Minerals plc 727 965
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
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 early January 2022, an updated
PEPR, addressing the conditions associated with the July 2021
approval, was lodged.
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