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.
7 March
2024
Strategic Minerals
plc
("Strategic Minerals" or the "Company")
Cobre 6-Year February Sales
High and Excavator Purchase
Strategic Minerals plc (AIM: SML;
USOTC: SMCDY), a profitable producing
mineral company, is pleased to announce
that the February sales tonnage recorded at Cobre was a 6-year high
for February sales and Southern Minerals Group LLC ("SMG"), the
Company's wholly owned subsidiary and operator of the Cobre
magnetite stockpile, is acquiring a Caterpillar Excavator (Trackhoe
320) to assist with expected volume increases.
Highlights
· February sales tonnage of
4,898 tons represents a 6 year high for February
sales
· February was also the highest
monthly sales tonnage since March 2021
· Current expectations are for
sales of circa 13,000 tons per quarter after March
2024
· Revenue from Cobre for 2024
expected to be circa US$3.5m
· Acquiring a Caterpillar
Excavator (Trackhoe 320) to assist year-round
operations
Cobre Sales
February 2024 saw the sale of 4,898
tons of magnetite which represented a 6 year high for February
sales. As a portion of SMG's clients are fertilizer
companies, who seasonally increase demand in February and March,
the 6 year high tonnage sales augurs well for the remainder of the
year. As shown in the following chart, the tonnage sales for
the past three years show how lean 2023 was and how the Company
believes that sales are now on track to be maintained at
significantly higher levels than over the past three
years.
Based on February 2024 sales and
expectations based on the major client's purchase order, the
Company anticipates sales tonnages of circa 13,000 tons per quarter
after March 2024. This is expected to result in 2024 revenues
of circa US$3.5m.
Cobre Equipment Purchase
In line with increases in sales, SMG
is acquiring a new Caterpillar 320 Trackhoe with delivery expected
in early March 2024. This equipment is being acquired to
ensure production, at these renewed higher levels, can continue
during difficult weather conditions, particularly around the
Winter/Spring period.
The purchase is being fully funded
by Caterpillar Finance on a four year loan facility at an interest
rate of 4.99% pa.
Commenting, John Peters, Managing
Director of Strategic Minerals, said:
"Encouraging sales in February 2024 and expectations of
returning to quarterly sales of circa 13,000 tons are providing a
robust cash flow outlook for the end of 2024, after resolving
creditor payments arising from 2023.
"Cobre's revamped management line up has risen to the
challenge and recently sought the addition of a Trackhoe 320 to
ensure continuation of higher volume operations in difficult
weather conditions. Not only was this sourced locally but the
acquisition was wholly financed, with repayments spread in line
with future cash flow expectations.
"Discussions continue with another potentially large client at
Cobre but, due to recent increases in activity, such discussions
are now focussed on future years supply.
"At present, we anticipate further news flow from projects
this month and beyond."
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. The access to this
stockpile has been extended until 31 March 2027 and is likely to be
rolled over again at that time.
In May 2016, the Company entered
into an agreement with New Age Exploration Limited and, in February
2017, acquired 50% of Cornwall Resources Limited (CRL) which holds
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 arrangements to acquire the balance
of CRL which was settled on 24 July 2019 by way of a vendor loan,
subsequently fully repaid on 26 September 2020. Since this
time, CRL has been progressing the development of the Redmoor
Tin/Tungsten project through its involvement in the EU funded Deep
Digital Cornwall exercise and the placement of Tin and Tungsten on
the Critical Minerals List of both the UK and USA.
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
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 late September 2022, an updated PEPR, addressing the conditions
associated with the July 2021 approval, was approved. The
Company continues seeking capital to commence
operations.