Strategic Minerals PLC (AIM:SML, OTC:SMCDF) said it generated revenue of US$415,000 from the sale of just over 4,700 tonnes of magnetite from its Cobre project in the USA during the quarter ended 31 March 2023.
Group cash was US$281,000 as of 31 March 2023, down slightly from the US$341,000 booked as of 31 December 2022. The reduction is consistent with operations at Cobre and also reflects continuing activity at Redmoor and Leigh Creek. In the corresponding period a year earlier, Strategic Minerals generated revenues of US$663,000.
Slower US economic growth continues to impact demand for the magnetite product provided at Cobre, it noted. While sales to the company's "fertilizer" customers appear somewhat unaffected, sales to 'cement' customers have been notably impacted, with the company's largest client continuing to suspend purchases whilst it runs down its existing stockpile.
The reduction in demand has been partially offset by a 20% price increase in July 2022.
Increased mining costs and negative market sentiment have also impacted proposed debt-based funding for the restart of production at the Leigh Creek copper mine, and new options are now being considered. Meanwhile, the assessment of the grant application lodged by Cornwall Resources Limited in December has been delayed by the assessing body.
During the period, Jeffreys Henry vacated its newly appointed auditor role and was replaced by Shipleys. And, separately, Jeff Harrison, a non-executive board member, provided notification of his intention to retire as a board member at the end of April 2023.
Management and directors' cash remunerations have been adjusted to ensure maintenance of healthy cash balances.
Activity undertaken by Cornwall Resources Limited during the period has included an aerial survey over the Redmoor tungsten and tin project, continued soil sampling, and the reassessment of previously drilled core.
"The company has responded to the impact on Cobre sales from the dip in US economic growth and reorganised overheads in line with the still substantial revenues expected from Cobre in 2023,” said John Peters, managing director of Strategic Minerals in the quarterly update.
"It has been disappointing to have come so far with a potential debt funding of Leigh Creek only to have circumstances changed. We continue to seek funding for Leigh Creek and feel that commodity prices may yet enhance the project's profitability further. The company now awaits the outcome of its grant application to assess the scope of its operations at Redmoor in 2023," he added.