Agreement to progress Gold, Rare Earths
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.
14 November 2016
Strategic Minerals plc
("Strategic Minerals" or the "Company")
Agreement to progress Gold, Rare Earths and Nickel Sulphide exploration
Strategic Minerals PLC (AIM: SML; USOTC; SMCDY), the multi-minerals production, exploration and development company, is pleased to announce that it has today agreed, in conjunction with its joint venture partner Rarus Limited ("Rarus"), to provide funding to Central Australia Rare Earths Pty Ltd ("CARE"). This funding (AUD $250,000) is for both drilling of CARE's Mount Weld tenement (considered prospective for Gold and Rare Earths) and for the continuation of exploration works at CARE's Hanns Camp Nickel Sulphide project in Western Australia.
CARE's Mount Weld tenement abuts Lynas Corporation's Mount Weld Rare Earth mine and is in an established gold region of Western Australia. Based on a historical review of past exploration, the Company has identified three discreet areas of gold anomalism at the Mount Weld tenement that warrants further investigation. With this in mind, the Company has agreed to provide funding (as detailed later in this announcement) for a drill programme to examine the resource potential of the tenement.
In line with its successful drill programme at the Hanns Camp project earlier this year, CARE has established a programme of electromagnetic surveys and a review of the material derived from the first drill programme to examine its potential for platinum group elements. The initial results from the programme exhibit evidence of a potential Nickel Sulphide deposit and are not dissimilar to initial findings associated with the Rosie Nickel Sulphide mine located to the North West of Hanns Camp.
As Nickel Sulphide accumulates in a lenticular deposit, it is highly unlikely to discover the deposit in the first drill programme and CARE's initial drill programme at the Hanns Camp project was the commencement of a process to establish the deposit's size and position.
CARE's planned exploration works have been specified as:
1) Mount Weld - Data compilation and targeting of a 1,200m RC drilling programme
2) Hanns Camp - Ground electromagnetic surveys to assist the drilling programme to define the
Nickel Sulphide target and re-assay of the Platinum and Palladium anomalous zones for
other Platinum Group Elements (Iridium, Osmium, Rhodium and Ruthenium).
Funding Agreement
Strategic Minerals has agreed to provide the following funding to progress CARE's exploration plans:
1) Strategic Minerals will provide an AUD $75,000 interest free loan maturing on 31 March 2017
2) At 31 March 2017, unless funds of at least AUD $150,000 are available within CARE, Rarus and Strategic Minerals will subscribe AUD $75,000 each for shares in CARE and commit to a further subscription of shares in CARE of AUD $50,000 each at 30 September 2017.
3) Should Rarus or Strategic Minerals not be able to fund their subscription requirements at 31 March 2017, the other party can undertake their commitment for the remainder of the subscriptions and will be allocated 25% of CARE's final shares for the subscription of the AUD $250,000.
4) Funds provided under 2 and/or 3 above, will be applied to tenement maintenance and the exploration program outlined above.
5) A minimum equity carry of 10% is to be maintained throughout the joint venture. In the event that dilution to either Rarus or Strategic Minerals results in either party having a 10% equity carry, any additional funds required to progress projects will be supplied by way of a loan at the rate of 10% pa charged monthly.
Commenting, Strategic Mineral's Managing Director, John Peters, said:
"The agreement on an appropriate approach for the continued exploration of the CARE tenements opens up an exciting new phase in the rejuvenation of the Company, especially in light of the recent escalation in Nickel prices, which have risen by approximately 40% since early June. This establishes a blueprint for the further development of the CARE tenements on a fair and equitable basis while ensuring that progress does occur.
We anticipate the work on the review of previous drilling material to begin shortly and expect the Mount Weld drilling and Hanns Camp overground electromagnetic survey to be completed in the first half of 2017.
The funding of these arrangements is to be undertaken internally and has been factored into our overall cash flow budgeting, taking into account our recent equity raising, cash flows from Cobre, the completion of the option on the Redmoor Tin/Tungsten project and the expenditure required here.
We look forward to updating the market on the progress of these works."
For further information, please contact:
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Strategic Minerals plc John Peters Managing Director
Follow Strategic Minerals on:
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+61 (0) 414 727 965 |
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SP Angel Corporate Finance LLP Nominated Adviser and Joint Broker Ewan Leggat Laura Harrison |
+44 (0)20 3470 0470 |
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Optiva Securities Limited Joint Broker Graeme Dickson
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+44 (0)20 34111880 |
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Yellow Jersey PR Financial PR Dominic Barretto Alistair de Kare-Silver
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+44 (0) 7825 916 715 |
Notes to Editors:
Strategic Minerals Plc is an AIM-quoted, diversified mineral development and production company with projects in the United States of America and Australia. The Company's focus is on acquiring and developing cash generative, high quality projects that meet local market demand for commodities and utilising this cash flow to undertake value added exploration.
In September 2011, Strategic Minerals purchased its first cash-generating asset, the Cobre magnetite tailings dam project in New Mexico, USA, brought into production in 2012, which continues to provide a revenue stream for the Company. The portfolio was expanded in January 2016 with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for nickel sulphides, platinum and rare earths. Strategic Minerals has completed drill-testing the highest priority nickel sulphide targets within the tenements and has successfully intersected nickel sulphide and platinum. In May 2016, the Company also entered arrangements to buy up to 50% of the Redmoor tin/tungsten exploration project in Cornwall, UK.
This information is provided by RNS
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