Strategic Minerals Regulatory News (SML)

1 February 2016

Strategic Minerals plc

("Strategic Minerals" or the "Company")

TENEMENT POSITION IN EMERGING NICKEL SULPHIDE PROVINCE

IN WESTERN AUSTRALIA SECURED

The Board of Strategic Minerals plc (AIM: SML; USOTC: SMCDY) announces that it has executed an agreement to acquire up to a 50% interest in Central Australian Rare Earths Pty Ltd ('CARE'), a subsidiary of Australian private company Rarus Limited ('Rarus'), which holds or has an agreement to acquire tenements with nickel sulphide and rare earth element ('REE') exploration potential in Western Australia and the Northern Territory of Australia.

Strategic Minerals has the right to acquire up to 50% of CARE for AUD 380,000 (approximately USD 270,000 or £190,000) with an initial subscription of 25.5% acquired for AUD 130,000, which will be used to repay third party loans made to CARE to fund tenement fees. Strategic Minerals has the right to acquire up to an additional 24.5% over a 12 month period for AUD 250,000 (the "Second Subscription") with each subscription for shares to be a minimum of AUD 50,000. After Strategic Minerals has subscribed for AUD 380,000 worth of shares in CARE it will own 50% and Rarus will own 50%. Each party will fund its 50% of costs for future work or either party can be diluted.

The AUD 250,000 from the Second Subscription will be used to fund a nickel sulphide exploration drilling programme at the highly prospective Hanns Camp Prospect located within CARE's Laverton Project. The Laverton Project is a farm-in joint venture with ASX-listed Focus Minerals Limited ('Focus') that grants CARE the right to explore twelve of Focus' tenements near the Western Australian Goldfields town of Laverton for, and 90% ownership of, nickel and other commodities discovered in the tenements excluding gold, copper (where it is the dominant commodity present) and silver to which Focus maintains 100% ownership rights.

The Laverton Project is located in the emerging 'Eastern Yilgarn Craton Nickel Sulphide Province' in Western Australia that is most notable for hosting the Mount Windarra and South Windarra nickel sulphide deposits located 12km west of the Laverton Project, which together produced 8.1 million metric tonnes at 1.51% nickel (Ni) between 1974 and 1992.1 Other occurrences located distally north and south along strike of the Laverton Project include (i) Duketon Mining's Rosie Deposit that has a Mineral Resource estimate of 1.74 million metric tonnes at 1.7% Ni including a best intercept of 5.2 metres at 9.13% Ni, 1.09% copper (Cu) and [2.22] grams/ [metric] tonne platinum (Pt) from 599.71 metres down hole2 (ii) Rox Resources' Fisher East Project (Mineral Resource 3.6 million metric tonnes at 2.0% Ni)3 ; and (iii) Impact Minerals' Mulga Tank Project which returned a best intercept of 0.25 metres at 3.8% Ni and 0.7% Cu from 212.6 metres down hole4.

Geological consulting group Burke Geoscience evaluated the nickel exploration potential of the Laverton Project in 2013. It identified three high-priority nickel sulphide targets at the Hanns Camp Prospect as defined by high-conductance (up to 180,000 Siemens)5 conductivity anomalies co-incident with magnetic highs and anomalous nickel and copper in regolith overlying a komatitic channel-facies geological setting considered extremely prospective for massive nickel-sulphide mineralisation. In order of priority, these newly identified targets are called 'Forrest', 'Stirling' and 'Canning' and Burke Geoscience recommended all three targets be drill-tested in order of priority at the earliest opportunity. Forrest is considered particularly prospective due to its location at the base of the Hanns Camp Ultramafic Belt's main lava channel pathway.6

In comparison to other recent discoveries in the Eastern Yilgarn Craton Nickel Sulphide Province such as Fisher East and Rosie which are extremely remote, the directors of Strategic Minerals believe a discovery at the Laverton Project would be more likely to be commercially viable due to its close proximity to Laverton, its airport, electrical infrastructure and sealed highway access to Glencore's Murrin Murrin lateritic nickel processing plant (that can also process nickel sulphide ore and concentrate) and the Malcolm railway siding located 75km and 120km away respectively.

In addition, CARE holds 100% of a number of tenements in the Northern Territory and Western Australia that are prospective for rare earths including properties adjoining Lynas Corporation's Mount Weld REE Mine.

Rarus has over the past three years secured and developed plans to explore the tenements held in CARE and has expended over USD 1 million to date in the process. A proposal to drill-test the targets at Hanns Camp has already been prepared by Burke Geoscience and both Rarus and Strategic Minerals are reviewing and updating the proposal to reflect current costings with a view to carrying out the drilling programme in Q2 2016.

Shareholders are advised that Strategic Minerals Chairman, Alan Broome, is also a Non-Executive Director of Rarus and that, after making the Board of Strategic Minerals aware of the CARE opportunity, he excused himself from any further dealings with the acquisition. He will become a Director of CARE and represent Strategic Mineral's interests.

Strategic Mineral's Managing Director, John Peters, said: "The Company has been looking for an opportunity to diversify its commodity portfolio from the bulk materials sectors of coal and iron ore. We believe that nickel and rare earths have good medium to long-term market fundamentals and this bottom of the market acquisition broadens the Company's exposure at the right time in the commodity cycle. In addition, we believe that the CARE tenements represent an immediate, highly prospective mineral exploration opportunity in an emerging nickel sulphide province that could potentially result in a significant increase in company value if exploration success is achieved."

More information on CARE's Laverton Project, including the Hanns Camp drilling proposal, maps and previous drilling results, will be available on the Strategic Minerals website later this week.

For further information, please contact:

Notes to Editors

Strategic Minerals Plc is an AIM-quoted, diversified mineral development and production company with projects in the United States of America and New Zealand. The Company is focused on acquiring and developing cash generative, high quality projects which meet local market demand for commodities. 

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 nickel sulphides and rare earths. Strategic Minerals is preparing to drill-test the highest priority nickel sulphide targets within the tenements during Q2 2016.

Qualified Person's Statement

Burke Geoscience consultant geologist Stephen Burke, who is a Member of the Australian Institute of Geoscientists, has reviewed and verified the information contained in this announcement. He is a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the 'JORC Code') and a qualified person as defined in the AIM Note for Mining and Oil & Gas Companies dated June 2009.

References

1Poseidon Nickel Limited (ASX:POS), 2013. The Windarra Nickel Project Feasibility Study Overview. Company Report.

2Independence Group (ASX:IGO), 2012. Duketon Joint Venture, Rosie Deposit Initial Ni-Cu-PGE Mineral Resource Estimate. 25/01/2012 ASX announcement retrieved from www.asx.com.au.

3Rox Resources Limited (ASX:RXL), 2014. Rox Increases Nickel Sulphide Resources over 100%. 04/09/2014 ASX announcement retrieved from www.asx.com.au.

4Impact Minerals Limited (ASX:IPT), 2014. Assay Results Confirm Extensive Nickel at Mulga Tank. 29/01/2014 ASX announcement retrieved from www.asx.com.au.

5Speyers, G. & Cooper, M., 2012. Hanns Camp MLTEM Memorandum. Consultant Report. Core Geophysics. Perth.

6Burke, S., 2013. Laveton Project, Hanns Camp Prospect Drilling Proposal, July 2013, Laverton, Western Australia. Consultant Report. Burke Geoscience. Perth.