26 October 2021

Strategic Minerals plc

("Strategic Minerals" or the "Company")

September Quarter 2021 Magnetite Sales and Cash Balances

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable producing mineral company, 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 30 September 2021.

Highlights

·   Strong annual Cobre sales continue at US$2.865m for the 12 Months to 30 September 2021

·   Group cash balance of US$0.564m as at 30 September 2021

Sales update: Cobre magnetite tailings operations

Annual Cobre sales for the year to 30 September 2021 continue to be maintained at just under US$3m. The moderate decline is considered to be mainly attributed to a spike in sales last year linked to an increased demand for reinforced concrete, for which magnetite is an input.

Sales comparisons on quarterly and annual periods to 30 September 2021, along with associated volume details, are shown in the table below:

* For comparison purposes, the US$0.75m of deposits forfeited by CV Investments LLC ("CV") has been excluded.

Since the June quarterly report, there has not been any significant news from the Receiver appointed by the US Securities Exchange Commission in relation to the previously notified US$21.9m arbitration claim by the Company's wholly owned subsidiary Southern Minerals Group LLC ("SMG") against CV Investments LLC ("CVI").

As noted previously, the Receiver has, to date, identified over US$8m in liquid assets relating to its receivership of CVI, although there can be no certainty of what proportion of this could be attributable to SMG if any at this time. The Company will update the market with details as and when they are provided by the Receiver. 

Financials and Operations

At 30 September 2021, the Group's non-restricted cash balance was US$0.564m (30 June 2021: US$0.734m).  

While after tax profitability from Cobre continues to cover corporate overheads and provide a small surplus of circa $0.2m p.a., costs associated with moving forward both the Leigh Creek Copper and Redmoor Tin Tungsten projects result in reducing cash balances. With the Leigh Creek Copper Mine ("LCCM") expected to move into production, and generate revenue, next year, subject to finance, it is expected that this may not be the case in 2022. 

To prudently ensure there is an adequate cash balance in the Company at all times and to move the projects forward until they become self-funding, the Company raised a further £400,000 (gross) in October which included participation by directors Peter Wale and John Peters.

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"Cobre sales remain strong and the Company continues to move its projects forward.

"The Company has had significant discussions associated with debt style funding for the LCCM project and believes the rising copper price will result in securing such funding to allow the commencement of production at Leigh Creek which, subject to finance, is expected to commence in the first quarter of 2022."

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.

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 which was settled on 24 July 2019 by way of a vendor loan which was fully repaid on 26 June 2020.

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. The project has been 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.