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Strategic Minerals says Leigh Creek feasibility study points to cash surplus of $30mln

Full scale production will begin at the lower risk Paltridge North deposit as a priority, said the company, which says it is in advanced discussions to secure funding

Strategic Minerals PLC -

Strategic Minerals PLC (LON:SML) has unveiled the results from an updated feasibility study on the first stage of development at its Leigh Creek copper mine in Australia, ahead of starting its three-phase development programme.

In an update on Friday, the AIM-listed miner said the feasibility study indicated a "pre-tax cash surplus" of US$30mln combined from its licenses at Paltridge North, Lynda and  Lorna Doone.

The company said that full production would begin at the lower risk Paltridge North deposit as a priority, thanks to its lower development risk and lower restating capital, and the proximity of these deposits to the existing Mountain of Light processing plant.

Strategic said that monthly production should be increased to 300 tonnes of saleable copper with a minimum grade of 70%, which would indicate a cash surplus going forward of US$6.4mln.

In March 2018, Strategic acquired the rights to the old copper mine situated in the North Flinders Ranges of South Australia, 500km north of Adelaide, and brought the project into production in April this year.

After restarting operations at Paltridge North, the company said that it would next focus on expanding existing resources through exploration on current mining leases and exploration tenements.

Additional exploration initially targeting oxide mineralisation and also the potential for deeper sulphide mineralisation is “likely to commence once regular cash flows build up and will run concurrent with mining and processing at the Lynda and Lorna Doone deposits, said Strategic.

In the long-term, the company also plans to develop a regional scale strategy for all copper in the North Flinders ranges, where the explorer owns 935km of exploration leases.

John Peters, managing director of Strategic Minerals, said that “advanced discussions are ongoing” with various parties to secure adequate funding to recommence sales at LCCM.

Quick facts: Strategic Minerals PLC

Price: 0.399 GBX

Market: AIM
Market Cap: £6.92 m

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