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Strategic Minerals jumps as subsidiary obtains extension to access Cobre magnetite stockpile

The firm said the contract exchanged granted access to the stockpile until 31 March 2020, with annual access to automatically rollover on 31 March each year thereafter
Magnetite piles
Magnetitie is an iron ore that can be used in the development of products such as cement and fertiliser

Strategic Minerals PLC (LON:SML) shares jumped in mid-morning trading Monday after its subsidiary, Southern Minerals Group, obtained an early extension to its access of the Cobre magnetite stockpile in New Mexico.

The mineral resource firm said the contract exchanged granted access to the stockpile until 31 March 2020, with annual access to automatically rollover on 31 March each year thereafter unless written notice is provided at least one month prior.

WATCH: Strategic Minerals 'exceptionally pleased' as Leigh Creek drilling hits further mineralisation

Magnetite is an iron ore mineral that is commonly sold to markets involved in producing materials such as cement, fertiliser, magnets, toner, and paint pigments.

John Peters, managing director of Strategic Minerals, said the early rollover was “a testament to the close working relationship SMG, and its President Clovis Hooper, has with the mine manager and their faith in the quality of the operational and safety procedures conducted by SMG”.

He added that while the company expected access to Cobre to continue until the stockpile was exhausted in 6+ years’ time, the early rollover was “strategically significant” as it ensured access to “positive cash flows” while the firm prepared to commence its second income stream from the Leigh Creek copper mine in South Australia.

Shares were up 5.3% at 1.5p.

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