Temporary Amendment to Cobre Sales Contract
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.
7 June 2018
Strategic Minerals plc
("Strategic Minerals" or the "Company")
Temporary Amendment to Cobre Sales Contract
Ensures minimum payment of $1.125m over nine months
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, announces that it has, in conjunction with its subsidiary Southern Minerals Group ("SMG"), amended its contract (the "Contract") with SMG's major client (the "Client") at the Cobre magnetite stockpile in New Mexico, USA. The amended Contract provides the Client sufficient time to put in place the necessary environmental approvals and operating procedures to resume the offtake of magnetite material, while at the same time ensuring that SMG is in a similar after-tax cash position as per the previous contract.
SMG has agreed the following arrangements in relation to the Contract:
· The Client is to pay, quarterly in advance, a non-refundable prepayment of US $375,000 against future deliveries (payments are due in June, September and December 2018)
· The minimum 4,000 tons per month sales requirement, currently stipulated in the Contract, will be suspended until 1 March 2019, offset by the US $375,000 quarterly prepayment
· A maximum of US $125,000 can be applied to sales in any month provided a minimum of 4,000 tons is taken during that month
· Should the material not be collected by the Client within 12 months from the prepayment invoice date any prepayment amount, relating to this invoice, will be forfeited
Commenting, John Peters, Managing Director of Strategic Minerals, said:
"We consider this arrangement to be mutually beneficial for both the Company and our Client. The amendments to the Contract have been agreed to support our Client whilst it seeks the necessary approvals. This will reduce the impact on their cash flow, and ensure that, from a cash perspective, the SML group will be unaffected.
"The underwriting of these cash flows reinforces our expectations that we will be in a position to internally fund current exploration and development programmes across SML's portfolio of projects."
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For further information, please contact:
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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Laura Harrison |
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Yellow Jersey PR |
+44 (0)20 3735 8825 |
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Financial PR |
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Charles Goodwin |
+44 (0)7747 788 221 |
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Joe Burgess |
+44 (0)7769 325 254 |
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Henry Wilkinson |
+44 (0)7951 402 336 |
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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 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 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 and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd.
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 was completed in February 2017 and a drilling programme completed in 2017 resulted in a significant upgrade of the resource.
In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 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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