Strategic Minerals PLC (LON:SML) saw its shares gain on Wednesday as the miner told investors its “primary focus” for the year ahead is to get its Leigh Creek copper project in South Australia back into production.
AIM-quoted Strategic completed the acquisition of the property, which sits within a known copper-rich belt, almost a year ago and has been working ever since to bring it into operation.
READ: Strategic Minerals obtains extension to Cobre magnetite stockpile
Plans are progressing for the production of 200 tonnes of 70% copper concentrate per month, to be sold at 85% of the London Metals Exchange (LME) price.
New areas have been drilled to expand development options and only last month, Strategic confirmed it had intersected more “significant copper mineralisation” at the Rosmann East pit.
Speaking back then, chief executive John Peters said production at Leigh Creek could begin in the first half of this year.
Much like mining giant BHP Group PLC (LON:BHP), Strategic is supporting the work at Leigh Creek with cash flow from magnetite – a bulk commodity that is commonly sold to markets involved in producing materials such as cement, fertiliser, magnets, toner, and paint pigments.
Cobre continues to perform strongly
Since it first came onstream back in 2012, Strategic’s Cobre magnetite tailings project in New Mexico has enjoyed a consistent track record of production, something which continued throughout 2018.
In the final quarter of last year, the company sold almost 11,000 tonnes of magnetite ore for US$633,000. Over the course of 2018, Strategic sold 54,600 tonnes of ore which brought in US$3.35mln, with much of that money reinvested back into the company.
Those numbers are above its historical averages, although they are down on 2017, when the introduction of a major customer skewed the results slightly.
At the end of December, Strategic had US$1.84mln of cash in the bank, compared with US$1.77mln in September.
‘Good progress all-round’
“The December quarter saw the company's long-term prospects benefitting in both volume and grade from receipt of assay results identifying bonanza style tin equivalent deposits at Redmoor and additional deposits and higher Copper grades likely to expand the existing JORC copper resource at Leigh Creek,” said CEO Peters.
“Strong ongoing sales at Cobre and the early rollover of access to the tailings stockpile announced earlier this week ensures that SML is in great financial shape as 2019 begins. Funds generated are being focused on developing the company's three other projects.”
He added: “Undoubtedly, the primary focus of 2019 will be the re-commencement of operations at Leigh Creek copper mine, where the board is increasingly excited by the growing prospects for the life and scope of the project, as well as the positive impact a second long-term cash flow generating asset will have on the company.”
In early afternoon trading, Strategic Minerals' shares were 1.5% higher at 1.65p.
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