Strategic Minerals Plc (LON:SML) expects 2018 results to exceed the record performance it reported last year after delivering a sharp rise in first-half profits.
The mineral development and production company posted pre-tax profit of US$2.6mln for the first half of the year, compared to US$158,000 a year ago, boosted by strong performance at its Cobre magnetite tailings dam project in New Mexico.
WATCH: Strategic Minerals boss delighted with strong first half performance
The group also took an after-tax profit of US$2.4mln on its acquisition of the Leigh Creek copper mine in South Australia, which it said adds significant value to its portfolio.
Strategic Minerals bought Leigh Creek through its wholly-owned subsidiary Ebony Iron Pty Ltd and expects the mine to begin production in 2019, creating a second cash flow stream.
“We believe the acquisition of this asset and the expected commencement of its operations in 2019 provide a strategically significant shift in the risk profile of the Company,” said managing director John Peters.
“The addition of a second revenue stream, particularly one derived from a wholly owned asset, ensures the sustainability and access to cash flows that form the base on which the Company expects to create long term growth for its projects and provide value to its shareholders.”
Unrestricted cash on hand as of June 30 was US$1.98mnln and this combined with strong cash flows from Cobre is expected to support funding for the development of Leigh Creek.
At the Redmoor project in Cornwall, grades nearly doubled in a resource update by joint venture vehicle Cornwall Resources Limited, in which the company has a 50% stake.
READ: Strategic Minerals reports best drilling results to date from Redmoor
A drilling programme was successfully completed at Hanns Camp in Western Australia where three additional nickel sulphide prospects have been identified.