Strategic Minerals PLC (LON:SML) said it has lodged a draft program for environment protection and rehabilitation (PEPR) for its Leigh Creek copper mine (LCCM) with the South Australian government.
In an update, the AIM-listed firm said the PEPR was “an important step to full re-opening of operations and producing copper at Leigh Creek”, with the process generally taking three to four months from lodging of the draft to approval.
WATCH: Strategic Minerals reports continued operations and steady sales at Cobre project
Strategic said once the approvals were complete and operations restarted, Leigh Creek was “ideally placed as a second income stream for the company with a short development timeframe and low capital costs to first production”.
However, the firm said it was unsure as to whether the approval timing would be impacted by the coronavirus pandemic
The company noted that while the pandemic had negatively impacted copper price, this had been largely ameliorated by a concurrent drop in the exchange rate between the US and Australian dollars.
“These factors have been built into our on-going discussions with potential joint venture partners and the board considers that the project is still very economically attractive”, the company said, although it added that these discussions had slowed as a result of the pandemic.
"Whilst the Leigh Creek project is taking longer to progress than anticipated, the board considers that LCCM, which has a book value of US$6.8mln, is a key asset within its portfolio”, said Strategic Minerals managing director John Peters in a statement.
“The continued strength of the Cobre operation, which the board expects to produce circa US$3mln in sales and US$1.5mln in after-tax cash in 2020, provides the Company adequate scope to locate and execute with a joint venture partner. Again, this emphasises that, subject to financing, a second income stream for the Group is relatively at hand", he added.
Shares in the company were steady at 0.55p in early trading on Thursday.