(Alliance News) - Strategic Minerals PLC said that the client's return "augurs well for cash flow" in 2024, following a challenging period of absence.
Strategic Minerals shares were up 68% at 0.17 pence each in London at midday on Thursday.
The miner with projects in New Mexico, South Australia and the UK, announced the return of the unnamed client for the company's ore sales at its Cobre magnetite operation in New Mexico.
In 2023, the client's departure resulted in sales at Cobre dropping roughly 50% from the previous year, alongside a 35% drop in yearly revenue.
In mid-December, the client requested pricing on a "significant volume" of ore over the next 12 months. Strategic Minerals has now confirmed a purchase order for the provision of 30,000 tons of ore in 2024, with shipments having already begun on Tuesday.
Strategic Minerals also reported ongoing discussions with a potential client interested in "large volume shipments". The unnamed client has already purchased around 100 tonnes of ore to calibrate its machinery for the order's size, the company said. An update will be provided should a contract be signed.
As of December 31, Strategic Minerals had a cash balance of USD102,000, down from USD341,000 a year prior, which the company attributes to the now-returned client's absence. The company anticipates the return of the client, and the one-year order commitment, improving its cash position throughout the year.
Commenting on the recent development, Chief Executive Officer John Peters said: "The welcome return of Cobre's major client, bigger and better than before, augurs well for cash flow throughout 2024 and could ensure a group wide operational cash surplus in 2024. The potential of another major client would only further enhance the outlook for operational cash flow."
By Hugh Cameron, Alliance News reporter
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Strategic Minerals (SML)