(Alliance News) - Strategic Minerals PLC on Friday said it has yet to reach an agreement for the funding needed to resume sales at the Leigh Creek copper mine in South Australia but is confident of a "successful outcome".
Shares in Strategic Minerals were down 8.3% at 0.62 pence in London in afternoon trading.
Managging Director John Peters said: "The company's development of the Leigh Creek copper mine has been undertaken carefully to identify all the key risks associated with this project, and especially those that impacted previous options. The feasibility study and associated documentation is ready to be submitted for permitting and soon thereafter, subject to regulatory approval and financing, recommencement of operations with a very short lead time. The company has been focussed on ensuring this project is on the surest footing for both the company and for prospective partners and investors.
"Throughout this de-risking process, the company has been in talks with various parties to secure adequate funding to recommence sales at LCCM. Advanced discussions are ongoing and whilst no agreement has yet been reached, the board remains confident that there will be a successful outcome to move LCCM forward."
The company posted results from its completed feasibility study on the first stage of development for its Paltridge North deposit at LCCM and an updated feasibility study on the Lynda and Lorna Doone deposits. These showed a USD30 million combined pretax cash surplus from the three deposits.
Looking ahead, the company will commence full-scale production with its lower risk Paltridge North deposit.
In addition, Strategic Minerals said it has identified a need to increase capacity at the Mountain of Light plant to 300 tonnes of saleable copper per month.
A three-stage development plan for LCCM includes restarting the existing Mountain of Light plant and de-bottlenecking the plans so as to take monthly production to the 300 tonnes per month figure.
Stage two involves expanding the existing resources via exploration of existing leases and tenements and stage three consists of developing a regional scale strategy to generate economic value from all of the copper in the North Flinders Ranges, including projects not already owned by LCCM with the goal of extended the mine life to over 15 years.
By Anna Farley; annafarley@alliancenews.com
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Strategic Minerals (SML)