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.
10 April
2024
Strategic Minerals
plc
("Strategic Minerals" or the "Company")
Cobre Quarterly Sales Update
and Issue of Warrants
Strategic Minerals plc (AIM: SML;
USOTC: SMCDY), a profitable producing
mineral company, is pleased to provide the
following update on quarterly Cobre sales and the issue of warrants
associated with short term funding.
Highlights
· March quarter sales revenue
of US $0.841m, up over 100% on March quarter 2023.
· New client, with expected
volume of circa 5,000-7,000 tons pa, confirmed.
· Trackhoe acquired and
operating minimising weather disruptions to truck loading.
· Sales in line with
expectations that 2024 full year revenues will exceed US $3.5m.
· Additional small short-term
working capital funding facility agreed with
warrants.
Cobre Sales
The return of Cobre's major client
and the addition of a new client, expected to take between 5,000 to
7,000 tons pa, have resulted in a strong March quarter performance.
Not unexpectedly, this is an impressive 103% increase on the March
2023 quarter when Cobre's major client was not purchasing
magnetite. However, this is also an impressive 27% increase on
March 2022 sales, when the major client was active.
March
Quarter
Sales
Annual
Sales
Quarter
$'000
Volume
$000
Volume
2024
841
12,393
2,002
25,625
2023
415
4,733
2,198
30,405
2022
663
10,610
2,502
40,244
To ensure minimal weather disruptions during
the US winter and early spring seasonal weather, the Company
acquired a Trackhoe as shown below, which came into operation in
March.
Pictured from left to right;
Kyle Drye (Pit Manager), Nick Contor (Office Manager) and Tim
Klumker (President)
The March
quarter results have reinforced the Company's view that the 2024
Cobre full year sales volumes will exceed 50,000 tons (17,965 tons
in 2023) with revenues expected to exceed US $3.5m (US $1.6m in
2023).
Cash Management and Issue of Warrants
Given the substantial reduction in
sales during 2023, the Company maintained operations, including
project development, through creditor management and from the
Board's election to take substantially lower cash
payments.
Considering future sales volumes,
and the Company's historical creditor balances, the Company has
augmented its previous AUD $100,000 short-term financing
facilities, from an individual investor, with a further six-month
AUD $50,000 funding, from another individual investor. This funding
is at an interest rate of 12% per annum and has attached 10,000,000
warrants, which have the same warrant terms as those previously
agreed (exercise price 0.5p and maturity 31 December 2025). Again,
these unsecured loans have been undertaken through the Company's
100% owned subsidiary Ebony Iron Pty Ltd.
The additional 10,000,000 warrants,
over new ordinary shares of 0.1 pence each in the Company with an
exercise price of 0.5p maturing 31 December 2025, have now been
issued (along with those previously notified to the market on 8
February 2024). No funds raised under these facilities will be
applied to balances outstanding to the Directors or CFO and,
currently, it is not envisaged that additional short-term funding
will be required.
Commenting, John Peters, Managing
Director of Strategic Minerals, said:
"The quarter's sales have confirmed our expectations for a
strong performance at Cobre in 2024 and a likely annual result
exceeding US $3.5m. The team at our New Mexico, USA operations have
managed the resurgence in demand and rebuilt the team after having
to contract operations during the 2023 downturn. New, fully
externally funded, equipment has assisted to ensure smooth
operation during inclement weather.
"Management remains focused on short term cash flow and
believes that the Company remains committed to avoiding the need
for a dilutive capital raise, which the Board and Management,
currently, considers will be unnecessary. With after tax cash flow
in 2024 being applied to normalising creditor balances, built up
during the sales downturn in 2023, the Company expects 2025 will
see after tax balances accruing."
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.