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.
18th March 2019
Strategic Minerals plc
("Strategic Minerals", "SML" or the "Company")
Strategic Minerals to Acquire Balance of Redmoor
Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to announce that it has entered into arrangements with New Age Exploration Limited ("NAE") to acquire its entire 50% shareholding in Cornwall Resources Limited ("CRL"), the joint venture vehicle developing the Redmoor Tin/Tungsten project in Cornwall ("Redmoor"), for a total capped purchase price of £2.66 million (approximately A$5.00 million) (the "Acquisition"). The Acquisition is subject to approval by NAE shareholders at a general meeting and upon completion of the Acquisition, CRL will be 100% owned by SML. The purchase price has been structured to reflect expected future SML cash flows and a significant component of the purchase price will be determined by future production revenues.
Highlights
· SML acquires full control of Redmoor, subject to ratification of NAE shareholders at a general meeting.
· Purchase price for 50% of CRL set at a maximum of £2.66m (A$5.00m) payable in three stages as follows:
i. £1.06m (A$2.00m) in cash within 30 days of approval by NAE shareholders
ii. £0.54m (A$1.00m) SML promissory note payable 180 days after settlement
iii. A royalty stream of 1.5% of Net Smelter Revenue from Redmoor production capped at £1.06m (A$2.00m)
Commenting, John Peters, Managing Director, Strategic Minerals, said:
"The recent resource upgrade has highlighted the potential world class nature of the Redmoor Tin/Tungsten project and has given the Board confidence to consolidate control. To date, SML has progressed Redmoor in conjunction with its joint venture partner, NAE, and is delighted that this opportunity has arisen to acquire total control of the project. Whilst the Acquisition is subject to approval by NAE shareholders at a general meeting, we consider this will be forthcoming within around a month, and SML will then have a further 30 days to settle the Acquisition.
"SML has valued working with NAE in developing Redmoor and is pleased to have agreed a fair and mutually beneficial transaction.
"As a UK listed company with full ownership of a flagship UK based project, SML is proud to play a significant role in the renaissance of the Cornish mining industry.
"Whilst the Company has sufficient cash resources to fund the acquisition of NAE's interest in Redmoor, it is exploring non-dilutive funding alternatives with a select group of potential investors, at both a holding company and project level. Taking full control of Redmoor provides a significant benefit to the Company as it allows it to, solely, set the timing of project developments and, hence, the potential need for cash flow.
"The Company considers this Acquisition to be an exciting opportunity and, in conjunction with our team and local stakeholders, looks forward to the next phase of development for CRL. SML believes, such development will further demonstrate the potential size and scope of the project and its position in a global context."
Shareholders are advised that Strategic Minerals' Chairman, Alan Broome, is also the Chairman of NAE and that, after making the Board of Strategic Minerals aware of the Redmoor opportunity, he recused himself from any further dealings with the Acquisition including any voting at Board level in both the Company and NAE.
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 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 and the Northern Territory that are prospective for cobalt, gold, 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 that have been 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. The 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 in Cornwall, UK.
In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 2019.
