Strategic Minerals Regulatory News (SML)

08 June 2011

Strategic Minerals Plc

("SM" or "the Company")

Admission to Trading on AIM

Fund Raising of £750,000 on IPO

Highlights

·; Admission to AIM with a market capitalisation of approximately £14.8 million 

·; Placing of new ordinary shares at 5p per share, raising £750,000 before expenses for the Company

·; Proceeds to be used to fund the next phase of exploration, for the Company'smagnetite iron ore exploration project in Northeast Queensland, Australia and for working capital

·; Exploration permit for an area of 2,100 hectares at Company's flagship project, the "Tenement"

Strategic Minerals ("SM" or "the Company"), an iron ore focused exploration company with assets in North Eastern Australia, today announces the successful completion of a placing (the "Placing") raising £750,000 for the Company, before expenses. Admission of the entire issued share capital of the Company to trading on AIM is expected to commence at 8.00am today ("Admission"). Allenby Capital act as Nomad and broker to the Company.

Pursuant to the Placing, the Company has issued 15million new shares at 5p each (the "Placing Price"). Based on the Placing Price, the market capitalisation of Strategic Minerals immediately following Admission will be approximately £14.8 million.  

Overview of Strategic Minerals

Strategic Minerals is a Queensland-based company incorporated in the UK on 1 June 2010. The Company's wholly owned subsidiary, Iron Glen Pty Ltd, has title to the Tenement, which is located approximately 40 kilometers southwest of Townsville, Queensland. The Tenement, which covers an area of 2,100 hectares, is an exploration permit for minerals and was granted on 24 May 2007.

The Tenement and surrounding area are located on a rich belt of deposits. Historic production on the Tenement was carried out by North Australian Cement Limited ("NACL") in an area known as the Iron Glen Pit. NACL used the magnetite mined in this pit in the production of cement and with the closing of the cement operation ceased operations in 1969. The Tenement covers a known area of magnetite, although, to date, the area has received only superficial investigation. Strategic Minerals is looking to build on previous geological surveys and investigate further the potential of the tenement.

Use of Proceeds and Reason for Placing and Admission

The Directors have taken the decision to apply for admission to trading on AIM as they believe that the Company will benefit from the market recognition of the value attributable to its exploration operations in Queensland, Australia. On Admission to AIM, Strategic Minerals intends to utilize the UK equity and debt markets to develop its magnetite iron ore exploration project in Queensland, Australia. Located in a region with substantial existing infrastructure for transportation of bulk materials to the major shipping lanes off the Eastern Coast, the Board believes that a new iron production hub can be rapidly developed to serve steel markets in Asia.

The Company will also seek to build value from other precious and base metals projects in the region to provide near term value for shareholders.

Strategy

The Directors intend to follow the recommendations contained in the Competent Persons Report and carry out a detailed geological mapping and sampling programme on the Tenement with follow-up drilling and coring beginning in July of this year.

In the event that favourable results are reported from this work programme, the Directors intend to commission a calculation of the reserve base of available magnetite. If sufficient tonnage is available, and the quality remains as indicated in the preliminary drilling programme and no deleterious contaminants become obvious, then the Directors anticipate conducting a feasibility study to include a metallurgical investigation using a bulk sample to determine the type of beneficiation system required to meet anticipated product specifications.

The Company intends to continue its evaluation of the Tenement and will use the net proceeds of the funds raised on the Australian Small Scale Offerings Board Limited of AUS$2.18m (approximately GBP £1.4m) and the net funds of £730,000 raised on Admission to continue its exploration programme and to provide working capital. The major part of the expenditure comprises controllable drilling and exploration costs.

On a more long-term basis, the Directors are aware of the prospects for expansion by acquisition and will investigate any suitable potential opportunities as and when they arise. In particular, the Directors believe that there are potential opportunities throughout Queensland, Australia and beyond.

Steven Sanders, Chairman of Strategic Minerals, commented:

"Previous ground magnetic and soil geochemical surveys as well as preliminary drilling carried out in and around the Tenement indicates an economical magnetite deposit. Several factors, including having a highly experienced management team in place and the close proximity of the Tenement to a deep water port give us optimism that this will be a highly productive and valuable project.

The funds raised in connection with today's admission to AIM will enable continued and systematic exploration of the current licence area as well as provide the funds to explore other areas of mineralisation."

For further information, please contact:

Further Information

Further information about the Company, including the Admission Document and all of the information required to be disclosed pursuant to AIM Rule 26, is available on the Company's website, www.strategicminerals.co.uk.

The Company has made an application to the London Stock Exchange for the entire issued share capital of the Company, comprising 296,380,539 ordinary shares of 0.1p each, to be admitted to trading on AIM today.

The Company's shares are traded on the AIM market of the London Stock Exchange under the ticker SML.

Directors

Steven Andrew Sanders (Chairman)

Patrick Griffiths (CEO and CFO)

Matthew David Bonthrone (Executive Director)

Michael Alexander Borrelli (Independent Non-Executive Director)