Strategic Minerals PLC (AIM:SML, OTC:SMCDF)’s shares jumped 68% on Thursday after the biggest customer of its Cobre tailings operation in New Mexico returned with a new order for 30,000 tonnes of iron ore.
The (unnamed) customer halted supplies in 2023, knocking a big hole in SML’s deliveries for the year just ended, but this contract is 50% bigger than anything it ordered previously and will give a boost to cash flows this year, said John Peters, managing director.
Furthermore, SML added it is in discussion with a new client about another similar-sized deal with details to follow later if an agreement is reached.
Payment for the contact announced today is twice a month and largely “removes concern” over cash flow, according to Peters.
The junior is now in a “unique position” at the micro-cap end of the mining sector, he explaied, given it now has a guaranteed cash throughout 2024.
Peters added Strategic Minerals could be “looking at quite an upside” given the discussions underway over the second, potentially large-scale, contract.
Shares rose 0.07p to 0.17p.