TIDMSML
RNS Number : 3593P
Strategic Minerals PLC
09 February 2023
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.
9 February 2023
Strategic Minerals plc
("Strategic Minerals" or the "Company")
December 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 December 2022.
Highlights
-- December quarter revenue of US$0.464m (2021: US$0.493m)
reflected the 20% July price increase passed on to customers
-- Reduced demand from some customers, associated with the dip
in US economic growth, has impacted sales volumes for this
quarter
-- Group cash balance was US$0.341m as at 31 December 2022 (US$0.381m as at 30 September 2022)
-- Negotiations on planned funding for the restart of production
at the Leigh Creek Copper Mine ("LCCM") are at an advanced stage
with a party which has substantially completed its due diligence
and visited the LCCM site
-- In December, Cornwall Resources Limited (CRL) lodged an
application for grant funds in relation to the Redmoor project
Sales update: Cobre magnetite tailings operations
The current dip in US economic growth has impacted demand for
the magnetite product provided at Cobre in New Mexico, USA. While
sales to our "fertilizer" customers appear unaffected, sales to our
"cement" customers have been notably impacted with our largest
client having currently suspended purchases whilst it runs down its
existing stockpile.
The reduction in demand has been partially offset by the 20%
price increase in July 2022.
Sales comparisons on quarterly and annual periods to 31 December
2022, along with associated volume details, are shown in the table
below:
Tonnage Sales (US$'000)
----------------------------- ----------------------------
Year 3 months to 12 months to 3 months to 12 months to
Dec Dec Dec Dec
2022 5,638 36,281 464 2,446
2021 7,245 42,637 493 2,611
2020 12,845 51,518 747 3,045
During the quarter, there has not been any further update on
distributions from the CV Investments LLC ("CVI") receivership.
Accordingly, the Company has not included any potential receipt of
funds from the Receiver in its cash flow projections.
Financials and Operations
As at 31 December 2022, the Company's cash balance was US$0.341m
(30 September 2022: US$0.381m). The marginal reduction is
consistent with Cobre operations in the December quarter and
reflects continuing activity at both the Leigh Creek and Redmoor
projects.
The quarter also saw the replacement of existing auditors BDO
with Gravita, which incorporates the Company's original auditors,
Jeffreys Henry. This was driven by economic considerations.
Leigh Creek Copper Mine ("LCCM")
The Company is pleased to provide the following updates
regarding the LCCM:
1. In December 2022, the Company lodged a Programme for
Environmental Protection and Rehabilitation (PEPR) with South
Australia's Department of Energy and Mining (DEM) for the handling
of transitional ore (from copper oxide to copper sulphide) at
Paltridge North; and
2. a specialist resource focused investor has continued its due
diligence for the provision of funding for the restart of the LCCM.
The potential investor has undertaken in depth external due
diligence on the project, which is currently progressing, and
updating of the Company's previous costings are underway with a
view to entering into a binding funding agreement.
Cornwall Resources Limited ("CRL")
In December, CRL submitted an application to Cornwall and Isle
of Scilly Council ("CIS") for grant funds from CIS's Shared
Prosperity Fund to undertake the planned development of the Redmoor
Tungsten and Tin project. The Company considers that, whether it is
successful with this application or not, at some stage the project
is likely to 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.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"Whilst it is disappointing to see the impact of the dip in US
economic growth resulting in lower sales volumes at Cobre, the
Company is reassured by the fact that Cobre is expected to continue
to contribute substantial revenues to cover the Company's overall
costs in 2023.
"The recommencement of operations at Mountain of Light, Leigh
Creek, subject to confirmation of the intended financing, should
place the Company in a strong position for the remainder of the
year.
"With a potential LCCM funding pathway identified, the Company
now awaits the outcome of its grant application to assess the scope
of its operations at Redmoor in 2023."
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. In December 2022, the Company signed a Term
Sheet for funding of operations at Leigh Creek and is progressing
documentation.
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