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LONDON (Alliance News) - Strategic Minerals PLC on Tuesday said its profit fell in 2018 due to reduced domestic sales from its Cobre magnetite operations in the US.
The minerals company posted a USD1.9 million pretax profit, down 14% from USD2.2 million in 2017. Revenue dropped 39% to USD3.4 million from USD5.6 million.
This difficulty was caused by a reduction in magnetite sales at Cobre to 55,565 short wet tons from 84,980 short wet tons. This was caused by a major client's inability to "physically receive its minimum 4,000 tons per month", as was specified in the client contract.
This contract was altered so that, until March 2019, the client made payments of USD375,000 per quarter as a non-refundable deposit.
"In working with the client, the company was able to secure a series of advance payments on expected future product deliveries, which is reflected as deferred revenue," said Strategic Minerals Chair Alan Broome.
"If this series of payments were taken into consideration, they would add a further USD900,000 to sales for the year," Broome added.
Looking ahead, the company intends to restart production at its Leigh Creek copper mine in SOuth Australia in 2019, as well as expanding Cobre's domestic sales. The company also seeks to complete its acquisition of the other 50% of Cornwall Resources Ltd, owner of the Redmoor tin and tungsten project in Cornwall, which was announced on Monday this week.
Shares in Strategic Minerals were down 0.3% at 1.62 pence on Tuesday.
