Strategic Minerals Regulatory News (SML)

For immediate release

Strategic Minerals Plc

("Strategic Minerals" or the "Company")

Issue of Convertible Loan Note Instrument and Loan Refinancing

Strategic Minerals Plc (AIM: SML), the magnetite focused iron ore producer and exploration company, announces that it has agreed the terms of a £950,670 loan ( the "Loan") under a convertible loan note instrument dated 20 February 2012 (the "Loan Note Instrument"). The majority of the Loan replaces AUD1.2 million of the AUD1.8 million loan announced by the Company on 21 September 2011, which was due for repayment on 31 December 2011. The balance of that loan (AUD0.6 million) has been refinanced on similar terms as before but with a repayment date of 30 June 2012 (the "June 2012 Loan").  The funding will enable the Company to continue construction of the rail upgrade to allow commencement of operations at its Cobre mine and provides additional working capital.

Under the terms of the Loan Note Instrument, which is effective from 1 January 2012, the amount outstanding under the Loan, plus any accrued interest, is capable of conversion into new ordinary shares of 0.1p each in the Company ("Ordinary Shares") at a conversion price of £0.15 per Ordinary Share. The Loan will attract interest at 10 per cent. per annum, payable annually in arrears. Any unpaid interest due will attract a default interest rate of 14 per cent. per annum. The repayment date of the Loan is 31 December 2014.

The Loan is convertible only at the discretion of the Company, which is entitled to pre-pay any or the entire principal of the Loan at any time without the prior approval of the lenders by way of either conversion at £0.15 per Ordinary Share (together with interest accrued up to the date of conversion) or redemption by the Company at par (together with interest accrued up to the date of redemption). The Loan will automatically convert into new Ordinary Shares, to the extent not already done so or repaid, on the final repayment date of 31 December 2014 unless the Company elects to redeem any outstanding principal and interest at par.

If the principal of the Loan is converted in full, it would result in 6,337,801 new Ordinary Shares being issued, which would represent approximately 1.6 per cent. of the as enlarged issued share capital of the Company. Each lender has undertaken to give an undertaking to the Company's broker not to dispose of their Ordinary Shares for a period of 12 months from their admission to trading on AIM, except in certain limited circumstances.

The Loan becomes immediately repayable, at the option of a lender, at par together with all accrued interest up to the date of redemption on the occurrence of certain events, including a person acquiring more than 50 per cent. of the Company's issued share capital.

Damon Capital Funds Pty Ltd ("Damon Capital"), a Company owned and controlled by John and Lydia Peters, has provided £790,670 of the Loan and Walter Doyle, an approximately 46.78 per cent shareholder in the Company, has provided £160,000 of the Loan. In addition, Damon Capital has provided the June 2012 Loan.

As John Peters has been a director of subsidiaries of Strategic Minerals during the past year and Walter Doyle is a substantial shareholder of the Company (as defined in the AIM Rules for Companies), the entering into of the June 2012 Loan and the Loan Note Instrument constitute related party transactions under the AIM Rules for Companies. The directors of Strategic Minerals consider, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the Loan Note Instrument and the June 2012 Loan are fair and reasonable insofar as the shareholders of Strategic Minerals are concerned.

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About Strategic Minerals

Strategic Minerals plc (AIM: SML) is developing a portfolio of projects that provide near term production along with those that potentially offer longer term capital gains. Strategic Minerals currently holds iron ore stockpile assets in North America and exploration properties in Australia.

www.strategicminerals.net.