Strategic Minerals PLC (AIM:SML) said it is now looking for a convertible note/joint venture to fund the restart of operation at its Leigh Creek copper project after debt negotiations ended.
SML said it wants US$10mln at the project level - approximately US$6mln for resumption of production and US$4mln for copper oxide and sulphide exploration
Funding arrangements are still within the project's critical development path and not considered likely to delay the expected 2022 resumption of production, SML added.
John Peters, managing director. said: "The company is confident that 2022 will see the recommencement of production at Leigh Creek.
"Whilst it was felt that funding on a pure debt basis would have produced the best result for our shareholders, the market was not prepared to debt fund the project at this time.
“Accordingly, discussions involving equity-linked funding, at the LCCM level, have now commenced and considerable interest has been received to date.
“It is for this reason that we feel that these funding arrangements will be completed before the project is 'shovel ready'.
"Given that the response to the conditions of the July PEPR is being lodged shortly with the DEM, it is considered that the earliest LCCM will be in a position to recommence production is March 2022 and this would be subject to all regulatory clearances and funding being secured.
"Strategic Minerals is excited by the prospect of undertaking drilling in 2022. Planned drilling at Mount Coffin is expected to lead to an increase in LCCM's reported copper oxide JORC resource and commence its long-term strategy to use cash flows from copper oxide production to locate a substantial copper sulphide deposit in this copper-rich province."