GCIStrategic Minerals sees Cobre sales surge, revenues to double in FY24
() , an exploration and mining company focused on critical minerals, issued an update on its Cobre magnetite project in New Mexico, and corporate cash management.
Strategic noted the signing of a new client at Cobre with expected volume of c. 5,000-7,000 tons/year. The agreement is on a take-and-pay basis without a purchase order. The company also said it was in discussions with a potential new client seeking large volume shipments.
Furthermore, in mid-January Strategic announced it had regained a major client that was lost in 2023, resulting in a 50% loss in sales volume for FY23. As of February 2024, the client is back with a 30,000 ton 2024 purchase order and payments commenced on a 14-day billing cycle.
In terms of cash management, Strategic announced short-term financing facilities totalling A$100k (£52k) with an individual investor. The unsecured facilities comprise A$50k maturing in May 2024 and A$50k maturing in October 2024, with a weighted average interest rate of 19% pa, including the grant of 10m warrants with an exercise price of 0.5p maturing December 31, 2025.
John Peters, Managing Director of Strategic Minerals commenting: "Encouraging sales trends at our Cobre operation have continued with the addition of a further new client, amid a clearly positive backdrop for the renewed demand for magnetite. There may yet be scope to further augment the existing sales expectations, either during 2024 or beyond."
View from Vox
Strategic continues to add sales volume at Cobre with last month's notable readdition of a major client responsible for 50% of sales in FY23, a new client gained in early February expected to generate 5,000-7,000 ton pa of new sales, and ongoing discussions with a potential new client seeking large volume shipments.
Given the large increase in expected business, Strategic estimates 2024 Cobre sales volumes to exceed 50,000 tons, compared to 17,965 tons in 2023; and revenues to exceed US$3.5m, up from US$1.6m in 2023 amid higher demand for magnetite.
The decision to raise capital through short-term financing facilities, joint venture and possibly grant funding avoids the need for dilutive capital raises and should bridge the gap until revenues pick up in FY24.
Separately, Strategic has found a potential partner for its Leigh Creek copper mine in Australia who has sufficient funds to get the project into production, with discussions ongoing.
Strategic appears at a value inflection point with active developments across its portfolio. Investors interested in critical minerals or small-cap miners should for further news and updates.
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