Strategic Minerals (SML) has told investors that it intends to list its wholly owned subsidiary, Leigh Creek Copper Mine ("LCCM") on the Australian Stock Exchange ("ASX") within a year.
The mineral company said the planned undertaking of an ASX listing for a South Australian Copper project would seek “to further secure the overall position of the parent Company.”
Ahead of LCCM’s potential listing, the company said it is now looking to raise A$10 million in debt funding to bring its Australian prospect into production in the second half of 2021.
The Board highlighted that it has elected to seek additional funding to conduct both the restarting of production at the Paltridge North deposit and exploration simultaneously.
The Group said Singapore-based Aetas Global Capital Pte Ltd ("Aetas") has been appointed to assist in funding the production at Paltridge North, exploration work and pre-listing costs.
In addition, the Group said the Australian Department of Mines (DEM) has stated that it will finalise its environmental assessment of the Paltridge North deposit at LCCM next month.
Commenting on the environmental assessment, John Peters, Managing Director of Strategic Minerals, told investors, "Although the Company has been anticipating an expected PEPR approval by the end of June 2021, the slight delay into July still ensures that plans continue unchanged, with the recent appointment of a mine manager and the engagement of Aetas.”
The Company said LCCM has recently benefited from the strong rebound in copper prices which Macquarie Bank forecast to remain largely at the higher levels in both the medium to longer term. The company said the rebound has both shifted the funding emphasis to a stronger debt focus and underwritten the future development of LCCM via exploration.
"Aetas have begun making introductions and, given the current favourable market conditions for copper projects, the Board feels confident that a funding solution to recommence LCCM production and advance exploration will be secured,” said Peters.
He added, “Sensitivity analysis for LCCM clearly demonstrates the expected, significant returns from the project. The use of the funds to undertake production and new exploration, continue to de-risk LCCM and further enhance its future prospects.”
View from Vox
Back in April 2021, and as a result of the rebound in copper prices, MD of the Group, John Peters stated his confidence that 2021 would begin to unlock ‘substantial value’ from LCCM and provide a valuable, significant second income stream ‘before the end of the year.’
Strategic Minerals is a minerals production and development group focused on developing projects prospective for battery materials. In September 2020, it reported a swing to profit in the six months ended 30 June 2020 after posting a pre-tax profit of $0.26m.
Reasons to SML
Multiple Projects and Minerals
It is currently undertaking four major spheres of operations; the Cobre magnetite stockpile operation, the Leigh Creek Copper Mine, the Redmoor tin/tungsten exploration project and the Central Australian Rare Earths project.
In October 2020, SML announced a positive updated scoping study undertaken by Wardell Armstong that reported improved economics for the Redmoor tungsten and tin project.
Sales Ramp Underway
Today’s ‘strong’ December quarter follows a trajectory of recent growth at the Cobre magnetite operation in New Mexico after the group reported strong sales last quarter.
"Sales at Cobre continue to show excellent annual growth providing the Company the opportunity to repay outstanding liabilities and benefit from surplus cash generated from operations,” said John Peters, Managing Director of SML said in October 2020.
He added, “With copper prices around $3lb and the recent emphasis on the strategic nature of tungsten, the Board is confident that the underlying value in its projects will be realized."
Positive Newsflow Expected
Last week, the Company said its 100%-owned subsidiary Cornwall Resources ("CRL") is to start a trenching and auger exploration program the Redmoor Tin and Tungsten project.
To date, multiple prospective targets for tin and copper have already been identified as a result of a review of historic exploration data taken to the west of the Redmoor deposit.
The planned program, which will utilise a combination of powered-auger sampling and trenching techniques and assess defined targets, represents a practical test of the local viability of these methods. The program is expected to lead to the definition of a series of further targets suitable for reconnaissance drilling at a later stage should it be successful.
Work is planned for early April 2021, Covid-19 controls permitting, and to last for around three months, leading up to the expected start of the ‘Deep Digital Cornwall’ summer project where SML will work to generate new data for the project as a delivery partner.
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