LONDON (Alliance News) - Strategic Minerals PLC on Thursday said quarterly sales and production at its Cobre magnetite operations in the US were hurt by plant maintenance and issues with a major client.
In the three months to March 31, the battery materials miner posted sales of USD554,000 from Cobre, less than half its USD1.4 million sales the year before. For the 12 months to the end of March, sales were USD2.5 million versus USD6.2 million for the comparative period.
Strategic Minerals' Cobre sales volumes for the quarter came to 9,472 tonnes, again less than half of the 21,636 tonnes the year prior. Sales volumes for the 12 months to March 31 was 42,401 tonnes versus 92,351 tonnes for the 12 months to March 2018.
Clients undertaking plant maintenance over the winter proved a blow to sales volumes. In addition, the company amended its magnetite sales contract with an undisclosed major client back in June 2018 to suspend minimum monthly sales.
The client agreed to pay USD375,000 in quarterly prepayments against future deliveries, standing in place of its 4,000 tonnes per month sales requirement. This temporary arrangement and was due to end in March.
Net cash flow from the mine was USD296,000, hurt by the client having not made its USD375,000 payment due in the quarter.
A drone survey of the existing stockpile at Cobre indicated the presence of 711,000 short wet tonnes of material, giving a minimum mine life of at least seven years.
As at March 31, Strategic Minerals' non-restricted cash balance was USD1.2 million, down from USD1.8 million at then end of 2018.
Cobre expects sales volumes to return to normal in its next quarter.
Strategic Minerals Managing Director John Peters said: "The June quarter is expected to be another pivotal time for the company, with the expected resumption of copper production from the existing heaps at Leigh Creek and the acquisition of the other half of the Redmoor tin-tungsten project. Additionally, this period should see further progress in bringing Leigh Creek into production and providing [Strategic Minerals] with a second on-going income stream, in line with its 2020 target."
Shares in Strategic Minerals were down 2.4% at 1.61 pence on Thursday.
Strategic Minerals (SML)