Substantial New Client at Cobre
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.
13 March 2017
Strategic Minerals plc
("Strategic Minerals" or the "Company" or "SML")
Substantial New Client at Cobre
Strategic Minerals PLC (AIM: SML; USOTC; SMCDY), the diversified mineral production and development company, is pleased to announce that its subsidiary Southern Minerals Group ("SMG"), the operator of the Cobre magnetite stockpile, signed a contract on Friday 10 March with a private company, Galvin Investment Company ("GIC") for the sale of up to 350,000 tons of magnetite at a market based price over several years, subject to availability. Before the contract becomes effective, GIC must provide a US $100,000 Letter of Credit from an acceptable bank. The contract calls for a minimum purchase of 2,000 tons per month and logistics at the mine site would result in a maximum supply, above existing client demand, of 6,000 tons per month. This would effectively double annual sales from Cobre, which is likely to be achieved without affecting SMG's effective net profit margin of between 40% to 45% of sales revenue. The contract will terminate if, at any time, SMG loses access to the magnetite stockpile.
Commenting, John Peters, Managing Director of Strategic Minerals, said:
"While we are delighted with the prospect of undertaking this contract with Galvin Investment Company, the Board wishes to emphasise the need to temper expectations and for caution to be applied until the security Letter of Credit is provided and sales commence. This process may take up to 30 days before the contract would effectively commence. We will update the market as soon as the contract comes into effect."
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 3411 1880 |
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Yellow Jersey PR Financial PR Felicity Winkles Alistair de Kare-Silver Joe Burgess
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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, the UK and Australia. The Company is focused on acquiring and developing cash generative, high quality projects which 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 which it brought into production in 2012 and 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, gold and rare earths. In May 2016, an additional exploration asset was acquired when the company entered into an agreement with New Age Exploration Limited to acquire up to 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. This 50% acquisition has now been completed.
This information is provided by RNS
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