Strategic Minerals (SML) , an exploration and mining company focused on critical minerals, updated markets on quarterly sales from its Cobre magnetite project in New Mexico.
Strategic reported March quarter sales of US$0.841m at Cobre, representing a 103% increase year-on-year. SML also confirmed a large new client, expected to buy c. 5,000-7,000 tons of ore per annum. Operationally, the project has acquired and mobilised a trackhoe, minimising weather disruptions to truck loading.
Strategic's sales are so far in line with expectations for FY24 revenues of c. US$3.5m. To help working capital requirements, the miner has agreed an additional small short-term funding facility with warrants.
John Peters, Managing Director, commenting: "The quarter's sales have confirmed our expectations for a strong performance at Cobre in 2024 and a likely annual result exceeding US $3.5m. The team at our New Mexico, USA operations have managed the resurgence in demand and rebuilt the team after having to contract operations during the 2023 downturn. New, fully externally funded, equipment has assisted to ensure smooth operation during inclement weather."
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Strong March quarter performance from Strategic Minerals' New Mexico asset, marked by the return of a major client, and the addition of a new client expected to move c. 5,000-7000 tons pa. This is over double last year's Q1 performance and a 27% increase over Q1 2022. The acquired additional equipment from Caterpillar should further boost performance during the winter season.
The positive Q1 results support Strategic's target for Cobre of 50,000 tons in sales volume in FY24, compared to 17,965 tons in FY23. This should boost revenues to at least US$3.5m in FY24, more than double last year's US$1.6m. To support the increased sales volumes, Strategic has acquired an additional 6-month funding facility of AUD$50k at a 12% interest rate, with 10,000 warrants attached at the same 0.5p price and maturity of Dec 31, 2025 as its previous AUD$100k facility.
The extra facility should help Strategic achieve a significant increase to cashflow in the near term without dilutive fundraises. If momentum continues, cash balances should grow materially in FY25.
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