Strategic Minerals

Primary ticker: AIM:SML
Stage of development: Development, Production
Commodity: Battery Materials
Project to promote: Leigh Creek Copper Mine and Redmoor Tin and Tungsten Mine
Project location: Australia, England, USA
Company presentation: Click here

Live financials

Cash: USD$0.351M
Debt: USD$1.12M

Major shareholders:
Manners Family – 5.35%
Peter Wale (Executive Director) – 3.95%
John Peters (Managing Director) – 3.88%
Chisholm Family – 3.06%
Management Ownership – 8.37%

4 projects

Cobre Magnetite stockpile, NM, USA – supplies Magnetite to customers (fertilizer, concrete). Profitable operation, cash flow cornerstone. Stockpile >700,000 tons, operations use 50,000pa.

Leigh Creek Copper Mine, South Australia, 24,900 tonnes JORC compliant copper metal, uses heap leaching producing copper cement and has offtake arrangement for output. Successfully tested existing plant in 2019 and expected full restart late in 2020.

Redmoor Tin and Tungsten mine, Cornwall, England. world class tin and tungsten project with an inferred resource of 11.7mt at a tin equivalent (SnEq) of 1.17%, arguably identifying as the 5th largest global tin resource.

CARE exploration tenements in Western Australia with cobalt, nickel sulphide, rare earth elements and gold potential.

Management Profile

John Peters, MD, FCPA, FFINSIA

John Peters MD FCPA, FFINSIA, over 30 years corporate finance experience at senior levels, expertise crosses a number of industries including natural resources. Has managed over £7bn mutual funds and is experienced in acquisition strategies, mining project evaluation, commercial arrangements, statutory and management reporting and compliance and governance obligations of public companies.

Jon Reynolds BASc (Geol)

Jon Reynolds BASc (Geol) highly respected operations and exploration geologist with over 30 years’ experience. Undertaken exploration for, and processing of, a number of minerals including Nickel, Copper, Uranium, Gold and Tin. A first-class mining business development manager and has successfully project managed a number of exploration programmes and processing operations.

What is your rationale for attending 121 Mining Investment?

Connect to investors/funders at both the listed company level and as well as potential joint venture partners at a project level.

What recent news would you like to highlight to investors attending?

Continued operation of our magnetite sales business despite Convid-19, arbitration decision due end May and submission of government application to restart Leigh Creek Copper Mine.

What are your key goals for the next 3, 6 and 12 months?

3 Months:

Submission of government application to restart Leigh Creek Copper Mine, move against Cobre client in respect of arbitration decision and repay loan used to acquire the remaining 50% of the Redmoor Tin and Tungsten project.

6 Months:

Source funding to commence the Leigh Creek Copper Mine project.

12 Months:

Commence operations at Leigh Creek thus establishing a second income stream for the company. Commence further drilling and work to move Redmoor Tin and Tungsten project to a Pre-Feasibility stage to be followed by moving to a Bankable Feasibility.

What do you see as the key risks and challenges facing your company at the moment and how are you overcoming these?

Key risk is refinancing/paying off/renegotiating loan due end June, raising funds to complete Leigh Creek Copper Mine (circa US $5m).

What do you think makes your company such a compelling investment?

Producing company that covers overheads and that has a near term cash flow project and a world class Tin and Tungsten project, all in stable political environments.

Analyst Insight – provided by Independent Investment Research

Strategic Minerals is an AIM-listed minerals production and development company. The company’s strategy is to utilise cash flow from existing operations to fund overheads and thereby provide a base from which to build a diversified portfolio of cash-generating, high-quality strategic minerals operations and near-term mining projects.

During 2018, the company acquired the Leigh Creek Copper Mine, situated in the North Flinders Ranges of South Australia, 500km north of Adelaide. The project is located northern limited of an extensive copper region of the Flinders Ranges. South Australia has an extensive history of copper production, with the state currently producing 27% of Australia’s copper and has 68% of Australia’s economic demonstrated copper resources. Other significant deposits in South Australia include BHP’s Olympic Dam (80million tonnes of contained copper), and Oz Minerals’ Prominent Hill (2.3mt of contained copper).

The Leigh Creek Copper project has a JORC (2012) Resource and a Mineral Inventory totalling 5.4Mt @ 0.7% Cu, with contained copper of 36.4kt. This includes a JORC (2012) Resource of 3.6Mt @ 0.7% Cu, with contained copper of 24.9Kt, at the Lynda, Lorna Doone and Paltridge North deposits. An additional Mineral Inventory of 1.8Mt @ 0.65% Cu, with contained copper of 11.5kt has also been defined for Rosmann East (JORC 2004), the existing heaps at Mountain of Light, West Jubilee and Elsie Adair.

The company in late 2019 announced feasibility study results on the first-stage development at Paltridge North and an updated feasibility study on the Lynda and Lorna Doone deposits. The results include a US$30m combined pre-tax cash surplus from Paltridge North, Lynda and Lorna Doone; adoption of a long-term, three-phase development program for the existing licenses and surrounds; full-scale production to commence with the lower-risk Paltridge North deposit.

The feasibility study on the first element, Paltridge North, indicates a cash surplus going forward, of US$6.4m, while an updated internal feasibility of the second-stage development of Lynda and Lorna Doone indicates a cash surplus of US$29m. Stage 1 provides a solid platform to expand LCCM both by developing known resources with further exploration and provides M&A potential from nearby tenements.