TIDMSML
RNS Number : 9934P
Strategic Minerals PLC
16 October 2019
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.
16 October 2019
Strategic Minerals plc
("Strategic Minerals" or the "Company")
September 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
September 2019.
Highlights
-- Resumption of regular demand from existing Cobre clients (excluding the major client)
-- Underlying sales revenue in the September 2019 quarter 26.3%
higher than in the September 2018 quarter
-- Group cash balance of US$0.765m as at 30 September 2019
-- Arbitration meeting with the major client is being scheduled
Sales update: Cobre magnetite tailings operations
Underlying sales volumes at Cobre improved significantly during
the September quarter, reflecting the resumption of regular demand
from a number of clients affected by plant maintenance. Sales
revenue for the September quarter includes a recognition of
forfeiture of US$375,000, relating to deposits from the major Cobre
client. Disregarding this deposit, underlying sales revenue during
the quarter was 26.3% higher than the comparative quarter in 2018.
Sales revenue for the 12 month period ended 30 September 2019 was
weaker than in 2018 and 2017 due to the adverse impact caused by
Cobre's major client's diminished purchases. Sales revenue for the
12 month period to 30 September 2019 includes deposits totalling
US$750,000 from the major client which have now been forfeited. As
legal action has commenced in relation to this contract,
expectations on future sales are focused on those arising from the
other existing customers. The Company continues to look to grow
sales organically.
Sales comparisons on quarterly and 12 month periods to 30
September 2019, along with associated volume details, are shown in
the table below:
Tonnage Sales (US$'000)
--------------------------- ---------------- -------------
Year 3 months to 12 months to 3 months to 12 months to
Sept Sept Sept Sept
2019 12,704 41,246 1,130 3,158
2018 10,305 74,376 598 4,856
2017 25,532 63,681 1,744 4,032
A claim has been made under the contract with the major client
and, as per this contract, an arbitration meeting is being
scheduled.
Financials and Operations
At 30 September 2019, the Group's non-restricted cash balance
was US$0.760m (30 June 2019: US$0.319m).
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"Sales volumes at Cobre rebounded and this augurs well for sales
over the coming year.
"The progression of a formal claim against the major client at
Cobre has resulted in the Board having to reconsider the pace at
which it can progress planned projects. We also remain in various
funding and investment discussions. The Board intends updating the
market on these plans as they formalise."
For further information, please contact:
+61 (0) 414 727
Strategic Minerals plc 965
John Peters
Managing Director
Website: www.strategicminerals.net
Email: info@strategicminerals.net
Follow Strategic Minerals on:
Vox Markets: https://www.voxmarkets.co.uk/listings/LON/SML/
Twitter: @SML_Minerals
LinkedIn: https://www.linkedin.com/company/strategic-minerals-plc
Facebook: https://www.facebook.com/search/top/?q=strategic%20minerals%20plc
+44 (0) 20 3470
SP Angel Corporate Finance LLP 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 rns@lseg.com or visit www.rns.com.
END
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