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.

18 November 2016

Strategic Minerals plc

("Strategic Minerals" or the "Company")

Update for the quarter to 30 September 2016

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), the diversified mineral development and production company, is pleased to provide the following update on the Company's operations for the three months to 30 September 2016.

Highlights:

· Strong sales growth at Cobre, New Mexico As previously reported, the management of Southern Minerals Group (SMG), the wholly owned subsidiary of the Company, secured a new key customer during the September quarter. Sales increased significantly from mid-August when shipments to the new customer commenced and have carried through for the remainder of the quarter and into the December quarter;

· Settlement of rail disputeIn July, the Company agreed to settle its claim against the rail provider to the Cobre mine for US$675,000 to be paid in instalments with the final payment being made by 30 June 2017;

· Nickel Sulphide intersected at Central Australian Rare Earth Pty Ltd ("CARE") Hanns Camp project in Western Australia;Analysis of Nickel Sulphide intersection were undertaken and negotiations entered into with joint venture partner to progress further exploration of the Hanns Camp and Mount Weld tenements;

· Investment in Cornwall tin/tungsten projectDuring the quarter, the Company, and its joint venture partner New Age Explorations Limited ("NAE"), re-negotiated the timing of planned share subscriptions in the joint venture vehicle to ensure the project had sufficient working capital to function during the Company's option period and to ensure that Strategic Minerals could access the bulk of the rail settlement claim to enable it to exercise its option over the project, thus minimising dilution to existing shareholders; and

· CashThe Company had cash of US$0.506m as at 30 September 2016.

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

"The Directors are pleased by the performance of the Company over the September quarter. The significant improvement in sales at the Cobre operation, combined with the Company's settlement of the rail dispute, has provided the Board with a positive outlook for the Company's financial performance in 2016. A capital raising was also undertaken subsequent to the September quarter, further strengthening the Company's financial position. Net proceeds from the placing are to be invested in improving the understanding of underlying assets through drill programmes, while cash flows at Cobre continue to underpin the Company's working capital requirements.

Over the December quarter, Management and the Board intend to continue to increase sales at Cobre; progress discussions to extend, if possible, the formal access period to the Cobre magnetite stockpile; co-ordinate funding of the Redmoor option and develop plans for the exploration of the CARE tenements, in particular the Hanns Camp and Mount Weld project areas."

Cobre magnetite tailings operations

In the September quarter of 2016, sales significantly improved on the previous year's performance. On an annual basis domestic sales are now starting to outperform our best previous levels. Comparative sales data is shown in the following table outlining sales and volume data:

___________Tonnage_____________ ____________Sales-_(US$'000)_________

Year 3 mths to Sept 12 mths to Sept 3 mths to Sept 12 mths to Sept

2016 7,686 23,477 $462 $1,530

2015 3,684 13,960 $250 $ 946

2014 2,825 18,242 $192 $1,221

The introduction of a large new customer has seen average sales prices reduced due to "bulk" discount pricing being applied. However, overall net profitability is expected to be maintained at the historical average level of 45% of sales.

As sales at Cobre are on an "on demand" basis, there is the potential for considerable variability in sales volumes period to period. However, sales in September were over 3,000 tons as was October. The Company's subsidiary, Southern Minerals Group ("SMG"), continues to work with other customers with a view to further increasing sales and the Board believes existing infrastructure can support a significant growth in sales volumes.

SMG continues to discuss the potential to extend the minimum access term at Cobre and believes it is making headway in this regard.

During the quarter, the President of SMG and the Managing Director of SML, met with representatives of the railroad in an attempt to mediate SMG's proposed legal claim. As previously announced, these negotiations resulted in SMG agreeing to receive a total of US$675,000 to be met under a payment plan with the last payment to be made in June 2017. Under accounting convention, the full amount of this payment, will be reported as income in the 2016 financial year.

Central Australian Rare Earth ("CARE") Exploration

In the September quarter, the Company took its ownership of CARE up to 50% and worked with Rarus Limited ("Rarus") (its joint venture partner in CARE) in reviewing the results of the Hanns Camp drilling program. This analysis was released to the market and the Board of CARE considers that the results are consistent with those initially received by the Rosie mine which operates in this area. Review of the results has led to the Company negotiating with Rarus on a "go forward" plan in relation to Hanns Camp and Mount Weld tenements. The Mount Weld tenement is considered prospective for rare earths and gold and is adjacent to the Lynas Mount Weld project. Subsequent to the period end, Strategic Minerals agreed, in conjunction with Rarus, to provide funding to CARE for further exploration drilling of both the Hanns Camp and Mount Weld tenements.

Investment in Redmoor Tin/Tungsten project

During the September quarter, the Company re-negotiated its option arrangements in connection with the Redmoor tin/tungsten project so as to ensure;

1. The Redmoor joint venture had sufficient working capital to undertake preparation works needed for a scheduled commencement of drilling in the first half of 2017; and

2. That the option exercise period was extended past the time when the Company would receive the bulk of the rail settlement proceeds, thus minimising dilution to shareholders associated with this investment.

During the quarter the Company subscribed for a total of 38,849 shares in the joint venture vehicle at a cost of c.US171,200 £131,700) taking the Company's stake in the joint venture to 16.4%. The Company has a further option to increase its stake to 50% by paying a further £846,648.96. As a result of the oversubscribed equity raise completed at the end of October 2016, the Directors are confident of completing the balance of the option before its maturity date of 15 February 2017.

The appointment of a Redmoor Community Liaison Adviser and the recent attention the area has been attracting, associated with Wolf Mineral Limited's Drakelands operations and Strongbow Exploration Inc.'s plans to resurrect South Crofty, place the Company in a good position to maximise value depending on the results of the 2017 drilling program.

As the Redmoor project is a "brownfield" site, the drill program is designed to confirm the existing deposits and, hopefully, extend the resource size, most notably the size of the high grade deposits.

Financials

Over the period, the Company continued to maintain a tight control of overheads in line with its corporate strategy to maintain this within the operating profits from its Cobre operations.

In preparation of exercising its option in the Redmoor project, and for additional exploration of the CARE tenements, the Company raised £600,000 in a placing in October 2016. This funding, when combined with the expected proceeds from the rail dispute settlement and improved Cobre revenue, places the Company in a good position to;

· Record a maiden profit;

· Fully exercise its option taking its share in the Redmoor project to 50%; and

· Undertake further drilling/exploration within the CARE tenements.

At the end of the September 2016, the Company had US$506,399 in cash compared to US$837,814 as at the end of June 2016. This is after investing c.US$323,200 in projects during the quarter being c.US$152,000 (AU$200,000) in CARE and c.US$171,200 (£131,700) in Redmoor (US$39,000 funded by issue of the Company's shares). Also, in the quarter, the Company received US$100,000 from the rail settlement and paid out c.US$73,000 in legal fees.

The Directors believe that cash flows from Cobre's operations, the capital raising in October, proceeds from the rail dispute expected in January 2017 and the continued tight corporate overhead structure should ensure that adequate reserves exist to progress the Company's existing operations.

Near term objectives

Over the near term, the Directors of Strategic Minerals plan to:

· Progress sales opportunities and tenure at the Cobre operation;

· Agree and undertake further drilling and exploration of CARE tenements, in particular Hanns Camp and Mount Weld;

· Organise for exercise and settlement, in the new year, of the Company's option to take up its stake in the Redmoor Tin/Tungsten project to 50%; and

· Monitor and control corporate overheads in line with operating profits.

The Company looks forward to providing further updates in due course.

For further information, please contact:

Forward Looking Statements

This release includes forward looking statements. Often, but not always, forward looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "intend", "plan", "estimate", "anticipate", "continue", and "guidance", or other similar words and may include, without limitation statements regarding plans, strategies and objectives of management, anticipated production or construction commencement dates and expected costs or production outputs. Forward looking statements in this release include, but are not limited to, the capital and operating cost estimates and economic analyses from the Study.

Forward looking statements inherently involve known and unknown risks, uncertainties and other factors that may cause the Company's actual results, performance and achievements to differ materially from any future results, performance or achievements. Relevant factors may include, but are not limited to, changes in commodity prices, foreign exchange fluctuations and general economic conditions, increased costs and demand for production inputs, the speculative nature of exploration and project development, including the risks of obtaining necessary licences and permits and diminishing quantities or grades of resources or reserves, political and social risks, changes to the regulatory framework within which the company operates or may in the future operate, environmental conditions including extreme weather conditions, recruitment and retention of personnel, industrial relations issues and litigation.

Forward looking statements are based on the Company and its management's good faith assumptions relating to the financial, market, regulatory and other relevant environments that will exist and affect the Company's business and operations in the future. The Company does not give any assurance that the assumptions on which forward looking statements are based will prove to be correct, or that the Company's business or operations will not be affected in any material manner by these or other factors not foreseen or foreseeable by the Company or management or beyond the Company's control.

Although the Company attempts to identify factors that would cause actual actions, events or results to differ materially from those disclosed in forward looking statements, there may be other factors that could cause actual results, performance, achievements or events not to be anticipated, estimated or intended, and many events are beyond the reasonable control of the Company. Accordingly, readers are cautioned not to place undue reliance on forward looking statements.

Forward looking statements in this release are given as at the date of issue only. Subject to any continuing obligations under applicable law or any relevant AIM Rules for Companies, in providing this information the company does not undertake any obligation to publicly update or revise any of the forward looking statements or to advise of any change in events, conditions or circumstances on which any such statement is based.