Strategic Minerals PLC (AIM: SML) plans to spend the remainder of 2026 and much of 2027 drilling and testing its Redmoor tungsten project in Cornwall, with the aim of upgrading the resource ahead of a pre-feasibility study.
The company said it is fully funded for the next 12 months and substantially funded through the pre-feasibility stage, having raised £8.7 million through two placings in the first quarter. Cash stood at $10.0 million at the end of June.
Market conditions have strengthened materially. The six-month average price for ammonium paratungstate, the benchmark tungsten product, is around $2,960 per tonne unit, compared with the $1,800 assumption used in Strategic Minerals’ most optimistic economic scenario.
Redmoor’s inferred resource increased 49% in March to 17.4 million tonnes grading 0.65% tungsten oxide equivalent, with the company saying the larger resource could extend the potential mine life to around 29 years from 12 years.
A preliminary economic assessment indicated a base-case after-tax NPV of $1.54 billion and IRR of 40%, against estimated initial capital expenditure of $109.7 million. However, those economics are currently based entirely on inferred resources, meaning further drilling and resource conversion are critical before the figures can be considered higher-confidence project metrics.
Cornwall Council approved a 22,500-metre drilling programme in July. Three rigs are now operating, with more than 5,000 metres completed on schedule and on budget, and the programme is expected to finish during the second quarter of 2027.
Early drilling has returned intersections including 1.03 metres grading 5.90% tungsten oxide, which the company said supports continuity of high-grade mineralisation. Metallurgical work has also increased expected tungsten recovery to 85.8% from 72.0%, while indicating that silver can potentially be recovered into the copper concentrate.
Elsewhere, Strategic Minerals has agreed to sell its Leigh Creek copper mine in South Australia, with proceeds intended to support Redmoor, while access to the Cobre magnetite stockpile in New Mexico has been extended to March 2031.
Cobre revenue fell 20% to $1.59 million in the six months to June after reduced purchasing by its largest customer. The company reported a $712,000 pre-tax loss, including an $812,000 non-cash share-option charge.
For investors, Redmoor is increasingly becoming the core valuation driver. The combination of strong tungsten pricing, improving metallurgy and an enlarged resource is encouraging, but the next major de-risking step is successful conversion of inferred tonnes into higher-confidence resources capable of underpinning the pre-feasibility study and eventual development decision.
Investor takeaway: Strategic Minerals is entering an intensive drilling phase at Redmoor with three rigs operating, more than 5,000 metres completed and sufficient funding for the next 12 months. The key value driver is whether the programme can convert the current inferred resource into higher-confidence categories and support the strong economics indicated by the preliminary assessment.
