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LONDON (Alliance News) - Strategic Minerals PLC Wednesday said its pretax loss narrowed in 2014, mainly due to much lower impairments and as it cut its overheads, although it swung to a gross loss after it reacted to the drop in iron ore prices by halting exports from its Cobre mine in New Mexico.
The mineral developer and producer reported a pretax loss of USD6.1 million for 2014, compared with a loss of USD29.0 million in 2013 when it had reported a much bigger impairment.
However, it made a gross loss of USD629,000, compared with a profit of USD2.0 million in 2013, as revenue to USD6.1 million from USD37.2 million. This was due to its decision to halt exports from its Cobre Magnetite tailings operations in New Mexico in February in response to the drop in iron ore prices. Export sales fell to 64,000 dry metric tonnes, from 423,000 tonnes in 2013.
The company early this year as been shifting its operations in an attempt to offset the drop in iron ore prices and drive more meaningful cash flow. It has relinquished the Jotanooka tenements in Australia it owned and is currently reviewing the Iron Glen tenements. It bought the Tatu coal project in New Zealand for NZD255,000 in cash and a royalty of up to USD2 per tonne of product sold and is also assessing the underlying resource at the Wanbao Metallurgical Coal Mine in China with the aim of buying up to 49% of the mine.
This is giving Chairman John Peters more confidence.
"The company is confident it now has low overheads, an existing cash flow stream form Cobre and the potential near term cash flow opportunity from Tatu. Further it anticipates possible growth opportunities through the Wanbao Project in China and potential expansion of the Tatu Project to surrounding areas," he said.
Strategic Minerals said it had cut its overheads by just over half to USD1.7 million in 2014.
Strategic Minerals shares were down 0.8% at 0.660 pence Wednesday morning.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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