Strategic Minerals Regulatory News (SML)

Market Abuse Regulation (MAR) Disclosure

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.

15 December 2017

Strategic Minerals plc

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

Terms renegotiated to acquire Leigh Creek Copper Mine outright for AUD $3m

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a diversified mineral production and development company, announces that after the successful completion of technical and financial due diligence on Leigh Creek Copper Mine Pty Ltd ("LCCM"), the owner of the exploration and mining rights and associated copper processing assets at Leigh Creek Copper Mine in South Australia (the "Project"), it has agreed to continue with the acquisition on renegotiated terms.

In its RNS dated 16 October 2017, Strategic Minerals outlined that it intended to pay a total consideration of AUD 5,000,000 (approximately GBP 2,850,000) predominantly by way of royalties in combination with cash, shares and assumption of debt.

Upon completion of due diligence, SML has renegotiated terms for the acquisition of LCCM through an equal mixture of cash and equity totalling AUD 3,000,000 (approximately GBP1,710,000), subject to documentation.

Transaction Details

Subject to finalising legal documentation and receiving legal due diligence sign off (expected to be received by the end of 2017), SML has agreed to purchase LCCM from Resilience Mining Australia Pty Ltd ("RMA") on 16 January 2018 for a total consideration of AUD $3,000,000 (approximately GBP 1,710,000) to be paid by way of AUD $1,500,000 (approximately GBP 855,000) in cash, payable at settlement, and AUD $1,500,000 (approximately GBP 855,000) paid by way of the issue of new ordinary shares of SML ("Shares") in the first week of April 2018, based on the volume weighted average share price ("VWAP") for the month of March 2018.

Shares issued will be subject to a voluntary escrow, with one third being escrowed for three months after issue, and another third being escrowed for six months after issue. Should SML fail to deliver RMA the Shares by the end of April 2018, RMA will have the right to reacquire LCCM for AUD $1.

Mr John Peters, Managing Director of Strategic Minerals, commented:

"The outright acquisition of Leigh Creek Copper Mine for an up-front payment of AUD $3m is a significant step forward for the Company. The renegotiated sale terms reflect the confidence we derived from our due diligence and the vendor's acceptance of payment certainty. We are delighted to add copper exposure to our portfolio of strategic projects. We believe that demand and supply factors for copper over the next five years will lead to price increases going forward, which in turn will add substantial shareholder value to SML.

The outright acquisition, as opposed to the previous arrangement involving a substantial portion of the consideration being paid by way of royalties, provides the Company with flexibility to maximise the potential from the tenements, as well as the freedom to progress the Project at its own pace. The new capital expenditure structure will allow us to minimise risks, notably extraction risk."

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, 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 earth elements. 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. The Company is also currently in the process of the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia.