Strategic Minerals Plc (LON:SML) said on Tuesday that sales volumes at the Cobre magnetite operations in New Mexico, US, remain strong.
The mineral company sold 10,304 tonnes of magnetite ore for US$598,000 in the three months to September. That brings its total sales for the 12 months to September to 74,364 tonnes for US$4.8mln, up from 57,279 tonnes for US$3.7mln last year.
WATCH: Cobre 'continuing to generate substantial cash' for Strategic Minerals
The robust sales performance comes despite the suspension of minimum monthly sales related to the amendment of a contract with the major client of the company’s Southern Minerals Group (SMG) subsidiary at Cobre.
In June the company said the amended contract would provide the unnamed client with sufficient time to put in place necessary environmental approvals and operating procedures to resume the offtake of magnetite material, while at the same time ensuring that SMG is in a similar after-tax cash position as per the previous contract.
In Tuesday’s announcement, Strategic Minerals said due to the strong sales and the arrangements put in place with Cobre's major client, it generated US$927,000 in cash flow from the assets in the September quarter.
As of September 30, the group's non-restricted cash balance stood at US$1.773mln. The company expects to fund the remainder of its 2018 development expansion plans from internally generated funds and will have significant surplus funds at year-end.
"The management of sales at Cobre has continued to provide the company with significant after-tax cash which it has reinvested into progressing the company's three other projects,” said John Peters, managing director of Strategic Minerals.
“This reflects the board's desire to organically grow the company, as much as possible, while progressing projects to points where markets can begin to fully appreciate their potential value. “
He added: "With production expected to be re-started at Leigh Creek Copper Mine next year and work expected to commence on a pre-feasibility study for Redmoor, the board feels confident that recognition of this underlying value is near-at-hand.
"The board maintains its expectation for these activities to be fully funded from internal cash flows in 2018 and for there to be a healthy cash balance as at year end."