(Alliance News) - Strategic Minerals PLC on Tuesday reported a decline in annual sales due to an ongoing dispute with a customer.
Strategic Minerals in September last year began legal proceedings against an unnamed major customer after a "breakdown in negotiations". Strategic Minerals sells magnetite from tailings operations at the Cobre mine in New Mexico.
The company said on Tuesday a date for an arbitration meeting is set to be confirmed shortly. There is "continued improving demand" from existing Cobre customers, it noted.
Tonnages from Cobre fell 22% year-on-year in 2019 to 42,517 tonnes, with the figure around half that achieved in 2017. Sales in 2019 from Cobre were USD2.5 million, down 26% from 2018 and less than half of 2017.
The declines were due to the loss of purchases from the major client at Cobre, Strategic said.
However, Strategic did note that fourth-quarter sales rose 13% year-on-year to USD713,000, with tonnages up 12% to 12,202 tonnes.
"Stable sales volumes and continued organic growth at Cobre provides the company with a solid foundation from which the board can look to execute its strategy across the wider portfolio. Access to the magnetite stockpile is expected to automatically rollover at the end of February," commented Managing Director John Peters.
"The key focus in 2020 remains on developing a reliable second income stream from the Leigh Creek copper mine and Strategic is engaged in a number of active discussions with potential sources of financing to move its projects forward via a solution which is best for the company and its shareholders alike," he added.
As well as Cobre, Strategic owns the Leigh Creek copper mine in the North Flinders Ranges in South Australia and the Redmoor tin-tungsten project in Cornwall.
Shares were 11% lower on Tuesday morning in London at a price of 0.71 pence each.
By George Collard; georgecollard@alliancenews.com
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Strategic Minerals (SML)