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Strategic Minerals (SML)

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Tuesday 14 January, 2020

Strategic Minerals

Q4 Cobre Magnetite Sales and Cash Balance Update

RNS Number : 6543Z
Strategic Minerals PLC
14 January 2020
 

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 January 2020

Strategic Minerals plc

("Strategic Minerals" or the "Company")

December Quarter 2019 Magnetite Sales and Cash Balances

 

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to provide the following update on the Company's cash position and ore sales at the Cobre magnetite operation in New Mexico, USA ("Cobre") for the quarter ended December 2019.

 

Highlights

·   Continued improving demand from existing Cobre clients

·   Underlying sales revenue in the December 2019 quarter 12.5% higher than December 2018 quarter

·   Group cash balance of US$0.520m as at 31 December 2019

·   Arbitrator for dispute with major client appointed and arbitration meeting expected to be scheduled shortly

Sales update: Cobre magnetite tailings operations

Underlying sales volumes at Cobre continued to improve during the December quarter.  Sales revenue during the quarter was 12.5% higher than the comparative quarter in 2018.  Sales revenue for the year ended 31 December 2019 was weaker than in 2018 and 2017 due to the adverse impact caused by Cobre's major client's diminished purchases.  Sales revenue shown here for the annual period to 31 December 2019 excludes deposits from the major client received, over a year ago, which the client has now forfeited.  As legal action has commenced in relation to this client, expectations on future sales are focused on those arising from other existing customers.  The Company continues to look to grow sales organically and source potential new customers.

Sales comparisons on quarterly and annual periods to 31 December 2019, along with associated volume details, are shown in the table below:


Tonnage


Sales (US$'000)

 

Year

3 months to Dec

12 months to Dec


3 months to Dec

12 months to Dec

2019

12,202

42,517


713

2,488

2018

10,931

54,565


633

3,350

2017

30,730

84,979


2,139

5,637

 

A claim has been made under the contract with the major client and, as per this contract, an arbitration meeting is being scheduled. An arbitrator has been appointed and the Company expects that an arbitration date will be established soon.

 

 

Financials and Operations

At 31 December 2019, the Group's non-restricted cash balance was US$0.520m (30 September 2019: US$0.760m).

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"Stable sales volumes and continued organic growth at Cobre provides the Company with a solid foundation from which the Board can look to execute its strategy across the wider portfolio.  Access to the magnetite stockpile is expected to automatically rollover at the end of February.

"The key focus in 2020 remains on developing a reliable second income stream from LCCM and SML is engaged in a number of active discussions with potential sources of financing to move its projects forward via a solution which is best for the Company and its shareholders alike."

 

For further information, please contact:




Strategic Minerals plc

+61 (0) 414 727 965

John Peters


Managing Director


Website:

www.strategicminerals.net

Email:

[email protected]



Follow Strategic Minerals on:


Vox Markets:

https://www.voxmarkets.co.uk/company/SML/

Twitter:

@SML_Minerals

LinkedIn:

https://www.linkedin.com/company/strategic-minerals-plc

Facebook:

https://www.facebook.com/search/top/?q=strategic%20minerals%20plc



SP Angel Corporate Finance LLP

+44 (0) 20 3470 0470

Nominated Adviser and Broker

 

Ewan Leggat

 

Stephen Wong

 

 

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 Australia 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 [email protected] or visit www.rns.com.
 
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