Strategic Minerals Regulatory News (SML)

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR') which has been incorporated into UK law by the European Union (Withdrawal) Act 2018.

26 January 2022

Strategic Minerals plc

("Strategic Minerals" or the "Company")

December Quarter 2021 Magnetite Sales and Cash Balances

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 2021.

Highlights

· The 2021 annual sales revenue from Cobre was US$2.611m (2020: US$3.025m)

· CV Investments LLC ("CVI") Receiver has formally requested all trade creditors and investors to again submit their claims to the Receiver, indicating an intention to distribute

· After tax profit expected in 2021, subject to audit

· Group cash balance of US$0.609m as at 31 December 2021

· Commencement of operations at Leigh Creek Copper Mine expected first half of 2022 subject to receipt of required funding

Sales update: Cobre magnetite tailings operations

2021 saw a gentle decline in sales over the first three quarters and a significant fall in the December quarter of 2021. While initial declines had been thought to reflect increased demand in 2020 associated with the wall between the USA and Mexico, the last quarter has seen a significant drop in demand from the Company's largest client.

The major client has indicated that they wish to rundown a significant magnetite stockpile, established at their plant. As this point, it is not clear when previous demand levels will be restored. To some degree, this fall in demand has been mitigated by the change in the associated sales price mix and additional demand from existing clients. Overall, sales volumes were in line with 2019 and changes in pricing mixes have resulted in a higher sales revenue than the underlying 2019 adjusted performance.

Despite the reduction in sales at Cobre, it is expected that, subject to audit, the Company will report an after-tax profit in 2021.

Sales comparisons on quarterly and annual periods to 31 December 2021, along with associated volume details, are shown in the table below:

* For comparison purposes, the US$0.75m of deposits forfeited by CV Investments LLC ("CV") has been excluded.

The Company's wholly owned subsidiary, Southern Minerals Group ("SMG") has received correspondence from CVI's Receiver formally requesting all trade creditors and investors to submit their claims to the Receiver. Thus, the Receiver has filed a motion with the court to establish the procedures and the U.S. Securities and Exchange Commission (SEC) did not object to the motion. Assuming the Court approves the Receiver's proposed process, from there, the Receiver may accept or reject those claims, subject to appeal. The Receiver will then make a recommendation for the distribution of the assets, which is still being determined.

While it still remains uncertain as to how the Receiver intends treating SMG's valid arbitrated claim on CVI, this development indicates that this matter may be resolved this year. Given SMG's US$21.9m claim and its understanding that other claims total circa US$70m, the Board considers it not unreasonable to expect that SMG may receive a reasonable portion of the over US$7m in cash the Receiver is now holding on behalf of CVI.

Financials and Operations

At 31 December 2021, the Company's non-restricted cash balance was US$0.609m (30 September 2021: US$0.564m).

The Company raised a further £400,000 (gross) in October 2021, inclusive of participation by Directors (Peter Wale and John Peters). While after-tax profitability from Cobre continues to cover corporate overheads and, as previously, provided a small surplus, costs associated with developing both the Leigh Creek Copper Mine ("Leigh Creek") and the Redmoor Tin Tungsten project, ("Redmoor") result in reducing cash balances. Subject to receipt of the required project funding the Board believes this pressure on cash balances will be removed this year through the planned commencement of operations at Leigh Creek and anticipated involvement of third parties at Redmoor. The SML Board has reaffirmed its commitment to ensuring that overheads will be kept below after-tax income derived from operations in 2022 and beyond.

Subject to receipt of required project funding, Leigh Creek is expected to shift into production, and generate revenue, this year and the Board believes this will materially impact expected future cash balances. The Company has lodged an updated Programme for Environmental Protection and Rehabilitation ("PEPR") with the Department of Energy and Mining of South Australia and is confident that regulatory approvals will allow for commencement of operations, subject to finance, late in the first quarter/early in the second quarter 2022. Discussions with potential funders continue and site inspection(s) in February are currently expected, subject to travel being possible.

Additionally, the Company has continued discussions with parties concerning its Redmoor project. On the basis of these discussions, the Company feels confident that it will not need to support operational overheads for the full year and further exploration will be undertaken during the year.

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

"While Cobre sales have reduced over 2021, the expectation of revenue from Leigh Creek in 2022 subject to receipt of project funding, places the Company in a strong position to realise its promise to develop a second income stream and significantly improve after-tax operational profits.

"Copper and tin prices continue to favour both the Leigh Creek and Redmoor operations and the Board believes 2022 will see exploration for both projects, in conjunction with external partners.

"The Company is looking forward to a positive resolution on the CV Investments claim this year."

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. In July 2021, the project was 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. In early January 2022, an updated PEPR, addressing the conditions associated with the July 2021 approval, was lodged.