TIDMSML
RNS Number : 5647J
Strategic Minerals PLC
15 April 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.
15 April 2020
Strategic Minerals plc
("Strategic Minerals" or the "Company")
March Quarter 2020 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 March
2020.
Highlights
-- Magnetite sales maintained with organic growth
-- Underlying sales revenue growth of 8.8% year on year
-- Sales activity continuing during copper mine suspension
-- Protocols have been established to ensure effective zero
contact between on-site personnel and trucks arriving at the
site
-- Arbitration verdict for dispute with major client expected no later than 30 May 2020
-- Group cash balance of US $0.351m as at 31 March 2020
Sales update: Cobre magnetite tailings operations
Sales volumes at Cobre continued to improve during the quarter
to March 31 2020. Due to the factory maintenance undertaken by two
of Cobre's clients in the quarter to March 31 2019, the 2020 March
quarterly sales performance is exaggerated when compared to the
March quarter 2019. However, the 8.8% increase in annual sales
highlights the solid organic growth being generated at Cobre. This
is a credit to its President, Clovis Hooper, and his tight- knit
team. As noted, sales revenue shown here for the annual period to
31 March 2020 excludes deposits received and forfeited by the major
Cobre client. As legal action has commenced in relation to this
client, expectations for future sales growth are focused on those
arising from new customers and other existing customers
Sales comparisons on quarterly and annual periods to 31 March
2020, along with associated volume details, are shown in the table
below:
Tonnage Sales (US$'000)
---------------------------- -----------------------------
Year 3 months to 12 months to 3 months to 12 months to
March March March March
2020 12,953 45,998* 764 2,698*
2019 9,471 42,401 554 2,480
2018 21,646 92,351 1,423 6,228
* For comparison purposes, US $0.75m forfeited by the major
Cobre client has been excluded from sales figures.
On Sunday 12 April 2020, the copper mine, where the magnetite
stockpile operates from, temporarily suspended operations as a few
employees tested positive for Covid-19. While the incidence of the
virus has not been considered widespread, the mine operator deemed
it appropriate to undertake a temporary suspension of its
operations. However, because of the early introduction of social
distancing at the magnetite stockpile, operations have been
permitted to continue and protocols have been adopted to,
effectively, operate with a zero contact both between on-site
employees and with trucks arriving at the site. This is being
achieved through arrangements, established by the Office Manager
Stan Brown, for contactless provision of load dockets, forgoing of
cleanliness inspections and communication with truck drivers
through CB radios .
In this manner Southern Minerals Group LLC personnel and their
clients can effectively ensure zero contact and responsible social
distancing. Sales post 31 March continue in line with Company
expectations.
Arbitration in relation to our claim under the contract with the
major client continues to follow the timetable disclosed in the
Company's Update released on 2 March 2020 with a result expected by
30 May 2020.
Financials and Operations
At 31 March 2020, the Group's non-restricted cash balance was
US$0.351m (31 December 2019: US$0.520m). During the three months to
31 March 2020, the Company made payments of interest and a
scheduled capital reduction payment of AUD 0.3m (circa USD 0.2m)
which related to the purchase of the balance of Cornwall Resources
Limited.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"During this period, the Company greatly appreciates both the
continuity of activity at Cobre, due to its identification as an
essential service provider, and the organic growth seen in sales
over the past year. We expect this growth trend to continue in 2020
despite the unusual market conditions. Operations at Cobre have
always provided the highest level of safety for employees and these
efforts have been lifted again to ensure all employees are safe in
this work environment.
Our arbitration process remains on track and we expect a
favourable outcome for the Company to be confirmed later in
May.
Efforts continue to move our projects forward and, whilst the
current environment has slowed the pace of some engagements, the
Board and Management remain confident of future progress."
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/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
+44 (0) 20 3470
SP Angel Corporate Finance LLP 0470
Nominated Adviser and Broker
Ewan Leggat
Charlie Bouverat
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
Austra lia and brought the project into production in April
2019.
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END
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