Strategic Minerals reports strong sales at Cobre operation
(AIM: SML ) has reported strong sales at the group’s Cobre magnetite operation in New Mexico, USA, ("Cobre") for the quarter ended 30 September 2020.
Operations have continued uninterrupted at Cobre as a result of effective zero contact on-site processes and policies which were enacted in response to the Covid-19 pandemic.
The mineral company said sustained solid sales growth continues organically with a 55% year-on-year rise in sales revenue at Cobre which is a ‘high-capacity’ supplier of magnetite.
Despite activity across the US slowing in the quarter, sales remained ‘robust’ with the positive annual growth highlighting the strength of demand being maintained despite Covid-19, it noted.
As at 30 September 2020, the Group's non-restricted cash balance was $0.264m (30 June 2020: $0.533m), which it said represents ‘a strong underlying performance’ due to the fact that SML had paid over $0.4m in taxes during the quarter, the Company detailed.
During 1H20, SMG took advantage of the US Government's offer to defer tax collections, due to Covid-19, it said, with the Company using this cashflow flexibility to minimise the capital raise required in June 2020 as well as to repay the loan from New Age Exploration Limited related to the group’s acquisition of the Redmoor tungsten and tin project.
Last week, the group received a positive updated mining scoping study and financial assessment at Redmoor from mining consultant Wardell Armstrong International.
The group also awaits approval for a Program for Environment Protection and Rehabilitation at its Leigh Creek Copper Mine project which is expected in the December quarter of 2020.
Shares in Strategic Minerals have traded consistently above 0.42p over the past two weeks to open at 0.425p following today’s update.
Currently, $0.75m forfeited by CV Investments, a client suing for lost earnings and damages, has been excluded from sales figures. This follows its principal, Brenda Smith, being accused of running a $63m ponzi scheme according to the US Securities Exchange Commission.
Strategic’s 100% owned subsidiary Southern Minerals Group (“SMG”), through which it sells magnetite from Cobre, remains in contact with the receiver and continues to push its claim regarding the previously notified $21.9m arbitration claim against CV Investments.
Commenting on growing sales, John Peters, Managing Director of Strategic Minerals, said:
"Steps have been taken to move both the Leigh Creek and Redmoor projects forward in a manner that avoids dilution at the parent level. With copper prices around US$3lb and the recent emphasis on the strategic nature of tungsten, the Board is confident that the underlying value in its projects will be realized."
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