Strategic Minerals Regulatory News (SML)

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14 January 2021

Strategic Minerals plc

("Strategic Minerals" or the "Company")

December Quarter 2020 Magnetite Sales and Cash Balances

Strong Cobre Sales Continue

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable producing mineral company, is pleased to provide the following update on the Company's cash position and ore sales at the Cobre magnetite operation in New Mexico, USA ("Cobre") for the quarter ended 31 December 2020. 

Highlights

· Cobre annual sales exceed US$3m

· Revenue growth of over 20% year on year at Cobre

· The Leigh Creek Copper Mine ("LCCM") approval process for mining the Paltridge North deposit continues, indicating the potential to recommence operations in 2021, subject to finance

· Cornwall Resources team continues working with NRG Capital on progressing the Redmoor Project

· Appointment of Karen Williams as Chief Financial Officer (Non-board position)

· Group cash balance of US$0.833m as at 31 December 2020

Sales update: Cobre magnetite tailings operations

The December quarter 2020 saw sales at Cobre continue to grow, up by over 20% year on year. Sales remained robust and the positive annual growth highlights the strength of demand being maintained despite the Covid-19 pandemic.

Sales comparisons on quarterly and annual periods to 31 December 2020, along with associated volume details, are shown in the table below:

* For comparison purposes, all sales in these periods to CV Investments LLC ("CV") have been excluded including the US$0.75m forfeited by CV.

Despite the continued suspension of mining activities at the adjacent copper mine due to the Covid-19 pandemic, activities at Cobre continue to operate under protocols established to ensure contactless sales and have been successful, safeguarding both Company employees and clients.

The Company's wholly owned subsidiary, Southern Minerals Group ("SMG"), continues to remain in contact with the receiver appointed by the US Securities Exchange Commission in relation to the previously notified US$21.9m arbitration claim against CV Investments LLC and the Company will update the market with details as and when they are provided by the Receiver.

Financials and Operations

At 31 December 2020, the Group's non-restricted cash balance was US$0.833m (30 September 2020: US$0.264m). The increase in the cash balance reflected the net proceeds raised in the Company's December capital raise and continued profitable trading at Cobre.

During the quarter, the Company continued, in conjunction with NRG Capital, to promote the Redmoor tungsten and tin project ("Redmoor" or the "Redmoor Project") to a number of entities with a view to progressing Redmoor. This process remains ongoing with the Cornwall Resources team still engaging with counterparties.

The process for the Leigh Creek Copper Mine ("LCCM") Program for Environmental Protection and Rehabilitation ("PEPR"), for planned copper mining at the Paltridge North deposit, continues to progress as expected. In late December 2020, the Company received official feedback from the South Australian government in relation to the PEPR application for the deposit and the Company is currently preparing a response, and expects to submit this to the South Australian government during the quarter ended 31 March. At present, and subject to the receipt of funding, the Company does not believe that any issues identified will prevent planned mining and processing occurring at Leigh Creek in 2021.

Following the announcement of the improved LCCM project economics on 9 November 2020, the Company continues discussions with a number of parties that have expressed an interest in investing in the Leigh Creek project and expects to be able to ultimately conclude an agreement once the PEPR for the Paltridge North deposit has been issued. The strong copper price, together with the potential upside associated with producing copper sulphate at Lynda/Lorna Doone, continue to enhance the appeal of LCCM to potential investors.

Ms Karen Williams has assumed the non-board position of Chief Financial Officer for the Company, replacing Mr Julien McInally. Ms Williams has been heavily involved with the Company's financial control for several years and understudied Mr McInally for much of this time. Mr McInally's departure reflects his desire to follow alternative employment opportunities and during his time at the Company he has made a significant contribution to its turnaround/performance from mid-2014.

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

"Continued strong sales at Cobre, combined with the December capital raise, have placed the Company in a solid position to move forward in 2021 with a goal of commencing a second income stream from copper production at Leigh Creek, subject to finance. Concurrently, we continue our endeavours to progress the Redmoor Project.

"On behalf of the Board, I would like to thank our outgoing Chief Financial Officer, Julien McInally, for his numerous contributions to the Company's operations and wish him well in his future employ. At the same time, I would like to welcome the Company's new Chief Financial Officer Karen Williams, who has already demonstrated her capacity to be a key member of the management team and provide strategic support to the Board."

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 orientated to supplying the burgeoning electric vehicle/battery market.

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 currently awaits clearance from the South Australian Government of its lodged Program for Environmental Protection and Rehabilitation (PEPR).