Cobre Access Extended Until 31 March 2027
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.
28 March 2022
Strategic Minerals plc
("Strategic Minerals" or the "Company")
Cobre Access Extended Until 31 March 2027
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable, producing mineral company is pleased to inform the market of the successful extension of its access to the magnetite stockpile in New Mexico from the recently announced rollover to 31 March 2023 until 31 March 2027.
Cobre Update
From 2017, Clovis Hooper, the President of the Company's 100% owned subsidiary Southern Minerals Group LLC ("SMG"), and John Peters, Strategic Minerals plc's Managing Director, have repeatedly sought an exclusive, longer-term extension of access to the magnetite stockpile at Cobre. The certainty of access from an exclusive extension is desirable to SMG and the Company, as it not only provides long term cash flow for both but establishes a framework in which SMG can more aggressively seek additional sales, through its ability to provide long term certainty of supply.
Until now, the stockpile owner had been reticent to provide longer term access to allow for the possibility of reorganising its mining activities, conducted nearby the stockpile. However, the good will built up during the ten years of operations, combined with the impeccable work undertaken by the SMG team, ensuring contactless and safe operations throughout the pandemic, have resulted in this milestone extension.
Given that, historically, March and early April are the busiest times for operations at Cobre, a concerted marketing program is being planned for May of this year.
Sales at Cobre have recovered to previous levels after the dip experienced from October 2021 through to January 2022. The combination of the extension of access and the planned marketing programme is expected to reflect in sales growth in the second half of the year.
CV Investments LLC
In line with the court order obtained by the Receiver for CV Investments LLC on 22 February 2022, SMG expects to formally lodge its claim for US$21.9m, as per its recent arbitration, within the next two weeks, well ahead of the Bar Date of 25 April 2022. Management and the Board anticipate this may produce a financial result for SMG before the end of the year, although there is no guarantee as to timing or amount.
Commenting, John Peters, Managing Director of Strategic Minerals, said:
"While a long time in coming to fruition, the extension of access at Cobre to 31 March 2027 is a huge achievement by the excellent team at Cobre and especially by its President Clovis Hooper.
"This extension should underpin the Company's future profitability and provides scope to broaden Cobre's clientele, which is expected to lead to higher sales in the future. "
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For further information, please contact: |
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Strategic Minerals plc |
+61 (0) 414 727 965 |
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John Peters |
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Managing Director |
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SP Angel Corporate Finance LLP |
+44 (0) 20 3470 0470 |
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Nominated Adviser and Broker |
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Matthew Johnson |
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Ewan Leggat |
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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. 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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