TIDMSML
RNS Number : 3290U
Strategic Minerals PLC
17 January 2017
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.
17 January 2017
Strategic Minerals plc
("Strategic Minerals" or the "Company" or "SML")
Cobre Magnetite Mine Update
Record Magnetite Sales up 24% in 2016 and US$400,000 Settlement
Payment Received
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), the diversified
mineral development and production company, is pleased to provide
the following positive update on the Company's operations at the
Cobre magnetite mine in New Mexico, USA ("Cobre").
Highlights:
-- Record Sales: Domestic sales of magnetite for 2016 of
$1,551,930 (25,385 short tons) set a new record at Cobre and
reflected a 24% increase in sales over 2015.
-- Settlement Payment Received: The Company confirms that its
wholly owned subsidiary Southern Minerals Group ("SMG") has
received US$400,000 due under the terms of its settlement with the
rail provider at the Cobre mine. It is the Company's intention that
these funds, in addition to the Company's existing cash resources,
will enable it to exercise its option to take its holding in the
Redmoor Tin/Tungsten project in Cornwall, England up to 50% and
fund the 2017 drilling programme focused on increasing the
high-grade resource at Redmoor.
Cobre Magnetite Sales
In the three months to December 2016, sales of magnetite
significantly improved on the previous year's performance. On an
annual basis, domestic sales have now exceeded our previous
best-recorded levels. Comparative sales and volume data is shown in
the following table:
Tonnage Sales (US $'000)
-------------------- --------------------
Year 3 mths to 12 mths 3 mths to 12 mths
Dec to Dec Dec to Dec
2016 9,431 25,385 $533 $1,552
2015 7,524 18,454 $513 $1,252
2014 3,030 18,780 $208 $1,266
The introduction of a large new customer, in mid-August 2016,
has seen average sales prices reduced due to "bulk" discount
pricing being applied. Overall, net per ton profitability has
reduced in line with this discounting to around 40% but total
profits have risen 70%.
Rail Settlement Payment Received
SML confirms that SMG has received a payment of US$400,000 in
relation to the settlement agreement it entered into for its rail
claim. The Directors, not wishing to dilute shareholders
unnecessarily, took this expected payment into consideration when
it limited the number of shares issued in the placing which raised
GBP600,000 as announced in October 2016.
Commenting, John Peters, Managing Director of Strategic
Minerals, said:
"We are delighted to report that during 2016 we achieved record
sales at our Cobre magnetite mine and, based on unaudited
management accounts, we expect the Company will be in a position to
report a maiden profit for the 12 months ended 31 December
2016.
"The payment received from the rail claim, in conjunction with
existing cash resources, provides us with sufficient funds to
enable us to take our holding in the Redmoor Tin/Tungsten project
in Cornwall up to 50% and fund the proposed 2017 drilling programme
focused on increasing the high-grade resource. We look forward to
making a further announcement when progress is made on the exercise
of the Redmoor option.
"We are also progressing discussions with the Cobre mine owners
and have increased the likelihood of longer-term access to the
Cobre stockpile. Our intention is to continue these discussions and
focus on increasing sales and profitability at Cobre.
"With active development programmes underway across our three
core projects, Cobre magnetite in New Mexico, CARE nickel in
Australia and Redmoor Tin/Tungsten project in Cornwall, the Board
is pleased with the recent progress made by the Company and is
confident about its prospects for 2017."
For further information, please contact:
Strategic Minerals plc
John Peters
Managing Director
www.strategicminerals.net
Follow Strategic Minerals on:
Twitter: @SML_Minerals
LinkedIn: www.linkedin.com/company/strategic-minerals-plc +61 (0) 414 727 965
SP Angel Corporate Finance LLP
Nominated Adviser and Joint
Broker
Ewan Leggat
Laura Harrison +44 (0)20 3470 0470
Optiva Securities Limited
Joint Broker
Graeme Dickson +44 (0)20 3411 1880
Yellow Jersey PR
Financial PR
Felicity Winkles
Alistair de Kare-Silver
Joe Burgess +44 (0)7825 916 715
Notes to Editors
Strategic Minerals Plc is an AIM-quoted, diversified mineral
development and production company with projects in the United
States of America, the UK and Australia. The Company is focused on
acquiring and developing cash generative, high quality projects
which meet local market demand for commodities and utilising this
cash flow to undertake value added exploration.
In September 2011, Strategic Minerals purchased its first cash
generating asset; the Cobre magnetite tailings dam project in New
Mexico, USA which it brought into production in 2012 and which
continues to provide a revenue stream for the Company. The
portfolio was expanded in January 2016 with the acquisition of
shares in Central Australian Rare Earths Pty Ltd, which holds
tenements in Western Australia and the Northern Territory that are
prospective for nickel sulphides, gold and rare earths. In May
2016, an additional exploration asset was acquired when the company
entered into an agreement with New Age Exploration Limited to
acquire up to 50% of the Redmoor Tin/Tungsten project in Cornwall,
UK.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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