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.

7 September 2017

Strategic Minerals plc

("Strategic Minerals" or the "Company" or "SML")

Encouraging Redmoor Phase 1 Drilling Results

Joint Venture Partners Commit to Phase 2

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), the diversified mineral production and development company, is pleased to announce the results from the first 10 holes of the Phase 1 diamond drilling programme at the Redmoor Tin-Tungsten Project being undertaken through its joint venture vehicle Cornwall Resources Limited ("CRL").

HIGHLIGHTS

· Successful high-grade tin and tungsten intersection in Johnson's Lode and in Kelly Bray Lode

· Great Southern Lode re-interpreted as a high-grade part of the Sheeted Vein System ("SVS")

· Encouraging results from discrete high-grade zones within the SVS mineralisation

· SVS high-grade zone widths and grades exceeding CRL's expectations. Exceptional intercepts include:

· Re-examination of historical (1980's) drilling results has identified 31 significant intercepts within SVS high-grade zones

· Phase 2 exploration re-focused on further defining the high-grade zones within the SVS as these are potentially an economically attractive target for underground mining

· CRL's joint venture partners, have committed a further £150,000 to continue the first three additional holes in Phase 2 and have committed to complete an additional 3 holes should they be required

· All drilling is expected to be completed and reported upon in Q4, with a Resource Update expected to be released in Q1 2018

· Ongoing positive community support with Cornwall Council extending drilling consent to 31 October 2017

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

"The initial 10 holes of the 2017 drill programme at Redmoor have shown encouraging results causing the joint venture to re-assess the most beneficial drilling targets for Phase 2. The results have caused a re-focus in our thinking that the high-grade zones within the sheeted vein system may prove a superior underground mining prospect when compared to the original, narrow, high-grade lodes.

"The team at Redmoor has done an outstanding job and has recommended a further three to six holes for Phase 2 exploration. This proposal has been agreed to by both joint venture parties and is now progressing.

"We look forward to bringing the market further news on the progress at Redmoor later this year and in the first quarter of 2018."

2017 Drilling Programme

On 21 March 2017, CRL began Phase 1 of a 13-hole diamond drilling programme aimed at increasing the tin-tungsten-copper resource at its Redmoor Project. The Phase 1 programme was funded by the farm-in payment made by Strategic Minerals in February 2017. As a result, SML and New Age Exploration ("NAE") became equal 50% joint venture partners in CRL and, therefore, the Redmoor Project.

Encouraging results in high-grade zones within the SVS mineralisation resulted in CRL's shareholders, in August 2017, extending the Phase 1 programme through the addition of two holes, with the joint venture partners equally funding a further £60,000.

Currently, 14 of the 15 Phase 1 holes have been completed and the last hole will be completed shortly. Laboratory results on the first 10 holes have been received to date.

On the basis of the results to date, CRL's shareholders have committed to jointly funding a further £150,000 for the completion of the first three holes of the Phase 2 drilling programme. The first of these Phase 2 holes commenced recently. Apart from these holes, up to three further holes may need to be equally funded by CRL's shareholders, should they be required.

The Phase 2 drilling programme will be focused on further definition of the SVS high-grade zones which are now considered to be, potentially, the most economically attractive underground mining target within CRL's mining rights.

Phase 2 drilling is expected to be completed by the end of October 2017. The remaiming Phase 1 and Phase 2 results (18-21 holes in total, including the first 10 Phase 1 holes reported here) are expected to be reported on in Q4 2017 with an updated Resource Estimate expected in Q1 2018. 

Drilling Results

The early holes in the 2017 programme, targeted the high-grade, but narrow, Johnson's, Great South and Kelly Bray Lodes. While drilling confirmed the existence of Johnson's Lode in some areas, these holes also constrained the strike extent to the east, limiting it compared to the extent assumed in the existing Mineral Resource and in developing the current Exploration Target. The Phase 1 drilling has also led CRL to believe that the Great Southern Lode is best interpreted as a high-grade zone within the SVS and not a discrete high-grade lode. The Kelly Bray Lode was intersected and remains, subject to further exploration, a viable high-grade lode target. 

The results from the first 10 holes of the 2017 drilling programme have led CRL's team of geologists and directors to re-assess the most commercial approach to monetising the Redmoor mineralisation. The new interpretation has focused on defining high-grade zones within the overall SVS envelope. While these will comprise a considerably smaller tonnage than the current overall SVS resource of 11Mt, they have a superior thickness to the high-grade lode targets, considerably higher grades than the SVS as a whole and potentially represent more attractive underground mining targets.

Sheeted Vein System (SVS)

The SVS is a zone of numerous closely-spaced, sub-parallel narrow quartz veins carrying tin, tungsten and copper mineralisation. The SVS system strikes at approximately 70° and dips at approximately 70° to the north. The SVS has previously been demonstrated to be continuous along strike for a distance of over 650 m with a width of approximately 100 m and a down dip extent of approximately 300 m.

The drilling completed during 2017 has indicated that the mineralisation within the SVS is preferentially confined within discrete high-grade zones that have been interpreted to dip steeply to the north, sub-parallel with the overall SVS envelope, and with a plunge of approximately 25˚ to the west. It is this higher grade mineralisation that has now become the focus of the ongoing drilling.

SVS High-Grade Zone Significant Intercepts

To date, CRL's 2017 drilling results from within the SVS have been encouraging and have yielded more high-grade intersections than expected by CRL, albeit over shorter intersection thicknesses (see Appendix 1 - Table (a)). A summary of the significant intercepts includes:

The thicknesses quoted above, and all other thicknesses in this report are, unless otherwise stated, apparent thicknesses. Estimated true thicknesses are shown in Appendix 1. For convenience, intersections are also expressed in terms of a calculated tin equivalent value1 (SnEq). While the ideal orientation to drill the SVS is orthogonal to the dominant vein orientation, one hole (CRD007) was drilled to investigate the dip-extent of the zone, and returned comparable thickness and grade to that of nearby holes drilled perpendicular to the dominant vein.

These results have highlighted the occurrence of multiple high-grade zones within the SVS, which are understood to plunge to the west at around 25˚. This has been further confirmed by a review of South West Minerals' historical drill data.

Holes CRD008 and CRD006 tested for a western extension of GSL / SVS. Low-grade but anomalous mineralisation was intersected, which is interpreted evidence of continuity of the SVS mineralising system in this area. CRL's geologists believe that, due to a combination of 25˚ westward plunge and possible movements on cross-cutting NNW-SSE faults, the high-grade zones of the SVS are deeper at this distance to the west; it is possible that a deeper hole beneath the profile containing CRD008 and CRD006 might identify additional higher-grade mineralisation further to the west of that currently defined.

[1] Equivalent metal calculation notes; Sn(Eq)% = Sn%*1 + WO3%*1.43 + Cu%*0.40. Commodity price assumptions: WO3 US$ 33,000/t, Sn US$ 22,000/t, Cu US$ 7,000/t. Recovery assumptions: total WO3 recovery 72%, total Sn recovery 68% & total Cu recovery 85% and payability assumptions of 81%, 90% and 90% respectively.

South West Minerals Historical Drilling: SVS High-Grade Zone Significant Intercepts

A thorough review of historical (1980's) South West Minerals ("SWM") drilling results within the SVS has identified 31 significant intercepts which have been re-interpreted as high-grade zones within the SVS. These have thickness in the range of 2 to 22 m and grades in the range of 0.41-3.73 % SnEq with an average thickness of 6.4 m and average grade of 0.89 % SnEq (a more detailed representation of these thicknesses and grades can be found in Appendix 2 - Table a). Additionally, a more in depth technical document relating to the drilling programme is now available on our website www.strategicminerals.net under the Investors/Presentations tabs.

It should be noted that the SWM, SVS high-grade zone significant intercepts listed in Appendix 2 - Table (a) are not new assay data. All of these intercepts were used to derive the current mineral resource statement, some of these intercepts were previously assigned to Great South Lode or to Johnson's Lode (as indicated in Appendix 2 - Table (a)) with the balance of the intercepts being previously included in the SVS.

SVS High-Grade Zone Exploration Potential

The encouraging 2017 CRL drilling results, combined with the results of the historic SWM drilling, have provided confidence that multiple high-grade zones exist within the SVS.

Preliminary interpretation of specific individual high-grade zones within the SVS has been commenced by CRL's geologists, however this work has not yet been completed.

The preliminary interpretation of the SVS high-grade zones indicates that the presence of these zones extends over a strike length of over 650 m and remain open along strike to the west.

High-Grade Lodes

Johnson's Lode

Johnson's Lode is a narrow, high-grade tin-tungsten lode which outcrops to the north of the SVS and dips to the south at approximately 80o and has been historically partially mined over a length of over 200 m and to a depth of approximately 250 m.

Only one significant intercept within Johnson's Lode has been drilled to date in the 2017 drilling programme. This was CRD002, detailed in Appendix 1 (b) which showed an intercept in Johsons Lode for 2.7 m @ 1.11% SnEq from 297.1 m.

A number of the historic SWM significant intercepts previously interpreted as Johnson's Lode have now been re-classified as SVS high-grade zones where they have sufficient thickness and grade, which these intercepts better represent. This has resulted in Johnson's Lode now being limited to a shorter strike length than included in the existing Mineral Resource and in the previous Exploration Target.

A list of the SWM historic drilling significant intercepts that remain classified as Johnson's Lode are detailed in Appendix 2 (b).

Two holes from the 2017 drilling programme, CRD005 and CRD007, targeted Johnson's Lode. CRD005 aimed to locate the down-dip extension of Johnson's Lode beneath the existing stopes, however the hole finished at 459 m without hitting the lode. A subsequent reinterpretation of Johnson's Lode suggests it may be steeper in this area than the previous exploration model had suggested. CRD007 had the dual aims of investigating the down dip extent of the SVS and to intersect Johnson's Lode in between the existing stopes and some of SWM's confirmed Johnson's Lode intersections further east (e.g. RM80_15). Johnson's Lode was not clearly intersected in CRD007 indicating that Johnson's Lode may occur more as discrete lenses, rather than continuous mineralisation along a tabular body.

Two further holes from the 2017 drilling programme, CRD008 and CRD010, were designed to target SVS and Great South Lode, and also to intersect Johnson's Lode at a low angle (drilling to south). CRD008 was drilled west of the Great Western Cross Course (fault) and failed to intercept either lode. CRD010 was drilled at the eastern end of the Johnson's Lode Inferred Resource and failed to intercept Johnson's Lode although it did intersect a one metre wide un-expected void at the depth that Johnson's Lode was anticipated (not interpreted as Johnson's Lode at this time).

Great South Lode

Great South Lode is a narrow, high-grade lode which outcrops south of the SVS and which dips to the north and is believed to have been historically mined over only a limited extent.

None of the 2017 drilling programme holes to date have conclusively intersected Great South Lode.

All but one of the historic SWM significant intercepts previously interpreted as Great South Lode have now been re-classified as SVS high-grade zones where they have sufficient thickness and grade, which these intercepts better represent. Great South Lode was previously modelled dipping to the north, strongly overlapping with the base of the SVS.

The one significant intercept from the SWM historic drilling that remains classified as Great South Lode is detailed in Appendix 2 (c).

Kelly Bray Lode

Kelly Bray Lode is a narrow high-grade lode which outcrops further to the north of Johnson's Lode and which dips to the south and has been historically mined over a length of over 400 m and to a depth of approximately 300 m.

Only one significant intercept within Kelly Bray Lode has been drilled so far in the 2017 drilling programme. This was CRD004, detailed in Appendix 1 (b), which showed an intercept of the Kelly Brade Lode for 0.6 m @ 0.95 % SnEq from 212.3 m.

Hole CRD003 which targeted Kelly Bray Lode did not intersect it due to drilling a NNW-SSE oriented late quartz-filled fault zone (cross-course) in the location of the target.

Community

CRL has maintained a close working relationship with the local community and local and county councils. No complaints have been received to date regarding the drilling and support activities or any other matter, and, where possible, local employment has been created. There are now two local community members working for the drilling company and CRL has employed a local geologist and a local mining engineer. CRL's Community Advisor is also locally based.

CRL has also entered into collaboration arrangements with local and regional universities; master's student research projects have been set up at with the Camborne School of Mines and the University of Portsmouth. Another project is in the planning stage with Plymouth University. A recent master's graduate who lives in Kelly Bray was provided with an informal internship during August.

Future Work Programme

CRL now considers the high-grade zones within the SVS to represent a potentially attractive underground mining target. A Phase 2 programme of three to six holes is now being undertaken immediately following completion of the extended 15-hole Phase 1 programme. Phase 2, will be targeted at high-grade zones within the SVS, and is scheduled to be completed by Q4 2017. Phase 2 has the objective of defining a high-grade resource within the SVS of sufficient size to potentially support an underground mining operation.

A total of 18-21 holes, including the 10 reported upon here, are expected to be drilled by the end of the Phase 2 programme. Assay results for all Phase 1 and Phase 2 holes are expected be available by Q4 2017.

The General Permitted Development Order (GPDO) planning authorisation from Cornwall Council has been successfully extended to 31 October in preparation for Phase 2 drilling, again highlighting the community relationships actively being fostered by CRL.

Subject to the results of the current and planned drilling, a resource update will be undertaken, results for which should be available in Q1 2018.

COMPETENT PERSON'S STATEMENT

The information in this report that relates to Exploration Results is based on information compiled and reviewed by Dr Mike Armitage, who is a Principal Geologist of SRK Consulting (UK) Ltd, a Member of the Institute of Materials, Minerals and Mining (MIMMM), a Fellow of the Geological Society of London (FGS), a Chartered Geologist of the Geological Society of London (CGeol) and a Chartered Engineer, UK (CEng). Dr Armitage has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Dr. Armitage is also a Competent Person "as defined in the Note for Mining and Oil & Gas Companies which form part of the AIM Rules for Companies". This will further tailor the statement towards the AIM market. Dr Armitage has consented to the inclusion in the report of the matters based on his information in the form and context in which it appears.

FORWARD LOOKING STATEMENTS

This report contains "forward-looking information" that is based on the Company's expectations, estimates and forecasts as of the date on which the statements were made. This forward-looking information includes, among other things, statements with respect to the Company's business strategy, plans, objectives, performance, outlook, growth, cash flow, earnings per share and shareholder value, projections, targets and expectations, mineral reserves and resources, results of exploration and related expenses, property acquisitions, mine development, mine operations, drilling activity, sampling and other data, grade and recovery levels, future production, capital costs, expenditures for environmental matters, life of mine, completion dates, commodity prices and demand, and currency exchange rates. Generally, this forward-looking information can be identified by the use of forward-looking terminology such as "outlook", "anticipate", "project", "target", "likely", "believe", "estimate", "expect", "intend", "may", "would", "could", "should", "scheduled", "will", "plan", "forecast" and similar expressions. The forward looking information is not factual but rather represents only expectations, estimates and/or forecasts about the future and therefore need to be read bearing in mind the risks and uncertainties concerning future events generally.

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Notes to Editors

Strategic Minerals Plc is an AIM-quoted, diversified mineral development and production company with projects in the United States of America, the UK and Australia. The Company is focused on acquiring and developing cash generative, high quality projects which meet local market demand for commodities and utilising this cash flow to undertake value added exploration. 

In September 2011, Strategic Minerals purchased its first cash generating asset; the Cobre magnetite tailings dam project in New Mexico, USA which it brought into production in 2012 and which continues to provide a revenue stream for the Company. The portfolio was expanded in January 2016 with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earths. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd. In May 2016, an additional exploration asset was acquired when the company entered into an agreement with New Age Exploration Limited to acquire up to 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. This 50% acquisition has now been completed and drilling at the project has commenced.

APPENDIX 1

CRL 2017 Drilling significant intercepts 

(a) Sheeted Vein System High-Grade Zone Intercepts

(b) High-Grade Lode Intercepts

APPENDIX 2

Significant Intercepts From Historic Drilling 

(a) Sheeted Vein System High-Grade Zone Intercepts

(b) Johnson's Lode Intercepts after reclassification of some intervals to high-grade zones within the SVS

Note: All other previously reported Johnson's Lode significant intercepts have been reclassified as SVS high-grade zone intercepts where these are of sufficient thickness and grade.

(c) Great South Lode intercepts after reclassification of some intervals to high-grade zones within the SVS

Note: All other previously reported Great South Lode significant intercepts have been reclassified as SVS high-grade zone intercepts where these are of sufficient thickness and grade.