Strategic Minerals Regulatory News (SML)

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Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

8 October 2021

Strategic Minerals plc

("Strategic Minerals" or the "Company")

Leigh Creek Copper Mine

Funding and PEPR Update

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable producing mineral company, is pleased to provide the following update on the Company's progress in relation to funding of the Leigh Creek Copper Mine ("LCCM") project and progress on addressing the conditional elements of the project's Program for Environmental Protection and Rehabilitation ("PEPR").

Highlights

· Negotiations on the provision of a minimum US $10m loan facility to LCCM, guaranteed by the Company, are being progressed with a top global bank

· The bank has been undertaking due diligence, although, at this time, there is no guarantee of a loan being offered

· Constructive meetings held with the South Australian Department of Energy and Mines ("DEM")

· Issues identified by DEM relate to clarification and elaboration of comments in submitted PEPR

· DEM confirmed desire to make PEPR unconditional as soon as possible after information requested is provided

· Scope identified to reduce size of environmental security deposit, subject to LCCM's reasoned argument

· Updated Mine Plan provisionally shows an additional 600 tons of recovered copper (US $4.5m revenue) as increased copper prices allow scope to economically expand the open pit footprint

· Information requirements are being progressed and expected to be submitted to DEM by the end of the year with operations, subject to funding, now expected to commence during Q1 2022

Funding Update

The Company has been working with Aetas Capital and currently has a respected global bank undertaking due diligence for the provision of a minimum US $10m loan facility to LCCM, guaranteed by the Company. At the end of the due diligence process, the Company expects that a Letter of Offer will be issued, but this cannot be guaranteed. While discussions have occurred on the likely term, rates and fees, the decision on the provision of a facility and its final parameters will not be concluded until the end of the lender's due diligence. Aetas Capital continues to provide information to other potential funders should this facility not be forthcoming and the Board is confident funding will not further impact the revised timetable to production.

PEPR Update

In July 2021, LCCM received conditional approval for the PEPR associated with LCCM's Paltridge North ("PN") deposit and its treatment of material at the adjacent Mountain of Light ("MoL") processing facility (see RNS issued 12 July 2021). Since that time, the management of LCCM, and its consultants, have held a number of meetings with the DEM to clarify their information requirements and confirm that the work LCCM is undertaking will adequately meet the Department's needs.

At these meetings, it has been identified that some elements of the requested clarifications are already covered in the submitted PEPR but some additional details are being sought, particularly in explaining the intended management of Potentially Acid Forming material, the cover design and visual amenity associated with the Paltridge North waste rock dumps and heap leach pads.

Throughout the Company's meetings with the DEM, they have outlined their intention to assist making this approval unconditional and have;

· waived any re-submission fees; and

· will be reviewing only the newly submitted material.

The DEM has stressed that, while assisting as much as possible, this will be subject to ensuring the wider community is protected in any future mining operations.

During its meetings, LCCM raised the potential to gradually phase the amount of environmental security deposit held, in line with planned operations. This would have the effect of lowering the initial deposit currently required of AUD $3.7m and possibly reduce the absolute size of the deposit should LCCM undertake rehabilitation works as currently planned. The DEM indicated that they would consider such a proposition and encouraged LCCM to submit a fully reasoned request on the matter.

In commencing the initial work on the DEM resubmission, the project's mine manager, John Speck, has identified that, at current copper prices of in excess of US $4.00 lb (compared to US $2.40 lb when PEPR was submitted), it is economic to enlarge the open cut mine footprint which will potentially recover a further 600 tons of saleable copper. In line with the Company's existing offtake agreement, this could result in an additional US $4.5m of revenue. Given the expected operating margin of 50% and the fact that this would be recouped within two to three years, the Directors believe this is a meaningful boost to the project's inherent value.

As a result of the discussions with the DEM, and after contacting key consultants, LCCM has reviewed its expected timetable to production and taken into account potential issues that may arise given Covid-19 restrictions currently being applied in Australia. In light of these considerations, LCCM now considers that the information required by the DEM can be provided before the end of the year and that operations, subject to receipt of finance and DEM approval, can commence in the later part of the first quarter of 2022.

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"The Company is encouraged by the support shown by the Department of Energy and Mines for mining and processing the Paltridge North deposit.

"All efforts are being undertaken to get operations restarted as soon as possible at Mountain of Light, Leigh Creek. However, the need to meet additional DEM requirements and the impact of the pandemic have been contributing factors to progressing the recommencement of production.

"The Company expects that the due diligence being undertaken by a respected global bank will lead to a Letter of Offer for a minimum US $10m loan facility. Such funding, if concluded, would not only permit the Company to recommence mining operations at LCCM but, also, provide funds for exploration and expected ASX listing costs. We will, of course, immediately update the market should we receive a Letter of Offer."

Notes to Editors

Strategic Minerals plc is an AIM-quoted, profitable operating minerals company actively developing projects tailored to materials expected to benefit from strong demand in the future. It has an operation in the United States of America along with development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals likely to be highly demanded in the future.

In September 2011, Strategic Minerals acquired the distribution rights to the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects aimed at supplying the metals and minerals likely to be highly demanded in the future.

In May 2016, the Company entered into an agreement with New Age Exploration Limited and, in February 2017, acquired 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. The bulk of the funds from the Company's investment were utilised to complete a drilling programme that year. The drilling programme resulted in a significant upgrade of the resource. This was followed in 2018 with a 12-hole 2018 drilling programme has now been completed and the resource update that resulted was announced in February 2019. In March 2019, the Company entered into arrangements to acquire the balance of the Redmoor Tin/Tungsten project which was settled on 24 July 2019 by way of a vendor loan which was fully repaid on 26 June 2020.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and brought the project temporarily into production in April 2019. The project has been granted a conditional approval by the South Australian Government for a Program for Environmental Protection and Rehabilitation (PEPR) in relation to mining of its Paltridge North deposit and processing at the Mountain of Light installation.