Leigh Creek Copper Mine Project Update
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.
21 May 2020
Strategic Minerals plc
("Strategic Minerals" or the "Company")
Leigh Creek Copper Mine Project Update
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials , is pleased to announce that the Company's wholly owned subsidiary, Leigh Creek Copper Mine Pty Ltd ("LCCM" or "Leigh Creek") has today lodged a draft program for environment protection and rehabilitation ("PEPR") with the South Australian government.
The lodgement of the draft PEPR is an important step to full re-opening of operations and producing copper at Leigh Creek. The general regulatory process for a licence to operate is for companies to lodge a draft proposal which is circulated to relevant departments within the South Australian state government. This process normally takes around two months and feedback is then addressed/incorporated into a final PEPR lodgement. Generally, the process takes around three to four months from lodgement of the draft PEPR to the granting of the approval.
Once the regulatory approvals are complete LCCM can look at re-starting operations subject to financing. The directors believe that LCCM is ideally placed as a second income stream for the Company with a short development timeframe and low capital costs to first production.
While we are unsure whether approval timing will be impacted by Covid-19, the pandemic has negatively impacted copper prices. However, the fall in copper prices has largely been ameliorated by a concurrent drop in the USD/AUD exchange rate. These factors have been built into our on-going discussions with potential joint venture partners and the Board considers that the project is still very economically attractive. These joint venture discussions have slowed as a result of the disruption imposed by Covid-19 but continue to move forward.
Commenting, John Peters, Managing Director of Strategic Minerals, said:
"Whilst the Leigh Creek project is taking longer to progress than anticipated, the Board considers that LCCM, which has a book value of US$6.8m, is a key asset within its portfolio. The continued strength of the Cobre operation, which the board expects to produce circa US$3m in sales and US$1.5m in after tax cash in 2020, provides the Company adequate scope to locate and execute with a joint venture partner. Again, this emphasises that, subject to financing, a second income stream for the Group is relatively at hand. "
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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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Ewan Leggat |
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Notes to Editors
Strategic Minerals plc is an AIM-quoted, operating minerals company actively developing projects prospective for battery materials. It has an operation in the United States of America and Australia 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 being sought in the burgeoning electric vehicle/battery market.
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 orientated to supplying the burgeoning electric vehicle/battery market.
In January 2016, the portfolio was expanded with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia prospective for cobalt, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd. In September 2018, the Company entered contracts for the sale of certain CARE tenements identified as gold targets.
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. This was completed on 24 July 2019.
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 into production in April 2019.
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.
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