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(Alliance News) - Mining firm Strategic Minerals PLC said Monday it sank to an interim loss on falling revenue and write-offs, but was continuing to invest in key projects being developed.
For the six months ended June, the mining firm sank to a pretax loss of USD1.0 million from a profit of USD2.7 million the year prior. This was after revenue fell by a third to USD1.4 million from USD2.1 million the year before.
Strategic Minerals also incurred at USD760,000 impairment charge as it potentially looks to exit its Central Australian Rare Earths Ltd gold tenements and those at Hanns Camp in Australia.
"The first half of 2019 has offered some challenges, with the major client at Cobre suspending payments, affecting cash reserves," Managing Director John Peters said. "However, the company has shown resilience and remains on track to deliver the board's strategy."
"During the period, significant investment has been made in restarting treatment of leach pads at Leigh Creek Copper Mine," Peters added. "This was critical in demonstrating the company's ability to resurrect operations ahead of expected government approval to mine the larger Paltridge North deposit. Additionally, funding which was originally allocated for exploration of the Hanns Camp site, that has not proved as prospective for nickel sulphide as expected, has now been redirected towards the development of Leigh Creek."
Peters added the firm was "mindful" of the "change in expected cash flow and has been putting into place strategies to provide for continuity of progress on the company's key projects."
"It is expected that the working capital position will be addressed in 2020 once regular sales commence at Leigh Creek," Peters added. In the meantime, the company will focus on watching expenditure closely.
Shares in Strategic Minerals were 2.1% lower at 0.71 pence in London on Tuesday.
By Ahren Lester; ahrenlester@alliancenews.com
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