Shares of Strategic Minerals surged nearly 50% to 0.06p in early trading on September 26th, following the release of the company’s interim results for the first half of 2024.
Financial Highlights
· The return of Southern Minerals Group’s major client has positively impacted cash flow and helped sales for the six months climb to US$2.136m, the highest six month revenue since 2017. This provides an outlook for 2024 sales of more than US$4.5m.
· With increased sales has come increased operating profitability, with the after-tax profit in this period rising to 31% from 5% last year. The pre-tax profit for the period was US$950,000 (H1 2023: US$54,000).
· After tax profit for the interim six months was US$667,000 (H1 2022 US$38,000), consistent with the increase in sales.
· In the same period, US$325,000 was invested in the Company’s development projects (Redmoor Tungsten and Tin Mine – US$233,000 and Leigh Creek Copper Mine – US$25,000).
· US$258,000 of accrued creditors were repaid in the period.
· Executive Directors’ fees were temporarily reduced in 2024 reflecting undertakings associated with 2023.
· Unrestricted cash as of 30 June 2024 was US$280,000 (31 Dec 2023: US$112,000).
The return of a major client to its American iron ore business boosted cash flow, driving six-month sales to US$2.136 million, the highest half-year revenue since 2017. This points to a projected sales outlook of over US$4.5 million for 2024.
Operating profitability improved alongside increased sales, with pre-tax profit rising to US$950,000, up significantly from US$54,000 during the same period last year. After-tax profit reached US$667,000.
The company invested US$325,000 in its development projects, including the Redmoor tungsten and tin mine and the Leigh Creek copper mine, while also repaying US$258,000 in accrued creditors.
Executive directors temporarily reduced their fees in 2024, following commitments made in 2023. As of June 30, 2024, Strategic Minerals had US$280,000 in unrestricted cash.
Commenting, John Peters, Managing Director of Strategic Minerals, said:
“The rapid recovery in Cobre sales, from January 2024, placed serious cash flow pressure on the Company’s working capital at a time when depressed sales volumes had already left the Company in an unhealthy cash position. To alleviate the cash flow pressure, the Company, was able to raise short term funding in the form of two loans. Subsequently, as the need for working capital abated, cash flow has predominately been directed to the repayment of external creditors and one of the short-term loans raised.
“I am pleased to report that creditor payments are now being met within regular terms and that, after the interim period, payment of accrued Directors and Management fees has begun.
“The Company continues to pursue investment in the Leigh Creek Copper Mine by way of either joint venture or outright sale. Similarly, the Company continues to seek funding for the Redmoor Tungsten and Tin Mine through government-based grants or joint venture.
“Subsequent to the end of the period, the retirement of Alan Broome, provided the opportunity for Charles Manners, one of our largest shareholders, and Mark Burnett, representing Philip Richards, to both join the Board with Charles Manners subsequently assuming the role of Chairman.”
