Strategic Minerals (AIM:SML) Q1 2022 Magnetite Sales and Cash Balances

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a profitable producing mineral company, is pleased to provide the following update on the Company’s cash position and ore sales at the Cobre magnetite operation in New Mexico, USA (“Cobre”) for the quarter ended 31 March 2022.

Highlights

· Sales to Cobre’s largest client, returned to normal levels in February and March

· March quarter and annual sales (US$0.7m and US$2.5m) impacted by weaker January sales

· Improved prospects for future sales due to 5-year extension of access to magnetite stockpile until March 2027

· Formal submission of claim to CV Investments LLC (“CVI”) Receiver lodged

· Group cash balance of US$0.615m as at 31 March 2022

· Awaiting formal correspondence from South Australian Government on the Leigh Creek Copper Mine (“LCCM”) Programme for Environmental Planning and Rehabilitation (“PEPR”) conditions

· Redmoor Exploration Licence extended to 2037

Sales update: Cobre magnetite tailings operations

February and March sales saw the reversal of the significant fall in Cobre sales sustained during the December quarter of 2021, which extended into January 2022. This reduction in sales was due to a significant drop in demand from the Company’s largest client.

The subsequent rebound in sales appears consistent with the major client’s indication that they wished to rundown a significant magnetite stockpile, established at their plant. This client’s demand resumed during February and March 2022 with purchases being in line with previous years’ demand for this period.

The Company considers that the recently announced 5-year extension of access to the Cobre magnetite stockpile, until 31 March 2027, will provide a platform from which the Company’s wholly owned subsidiary, Southern Minerals Group (“SMG”) hopes to use to increase sales revenues.

Sales comparisons on quarterly and annual periods to 31 March 2022, along with associated volume details, are shown in the table following:

* For comparison purposes, the US$0.75m of deposits forfeited by CV Investments LLC (“CVI”), in October 2019, has been excluded.

In line with CVI’s Receiver having established, through the courts, a Bar Date of 25 April 2022 by which claims on CVI must be made, SMG has now, formally, lodged its US$21.9m arbitrated claim. It is anticipated that this process will lead to the Receiver making a recommendation for the distribution of the assets, shortly after the Bar Date. At this point, there can be no certainty of any payment to SMG, but the Management and Board expect there will be some distribution later this year.

Financials and Operations

At 31 March 2022, the Company’s non-restricted cash balance was US$0.615m (31 December 2021: US$0.611m).

Leigh Creek Copper Mine

The Company continues its dialogue with the South Australian Department of Energy and Mines (“DEM”), and, at this point, the Company is unaware of anything that will stop the removal of current conditions associated with the PEPR granted in July 2021. However, contrary to the Company’s announcement on 5 January 2022, the timeframe in which the DEM must respond is a guideline not a statutory requirement, although the Board believe this response should be received soon. Subject to receipt of required project funding and DEM approval, Leigh Creek is expected to move into production this year. Discussions with potential funders continue and include a recent site visit. Management considers that the removal of conditions currently associated with the PEPR will act as a catalyst in determining the funding arrangements for the project.

Cornwall Resources Limited

During the quarter, the Company’s wholly owned subsidiary, Cornwall Resources Limited (“CRL”), continued to receive grant funding from prior claims related to the Deep Digital Cornwall project. The claim cycle is ongoing, as work continues on lab analysis of soil samples. Work is also progressing on the interpretation and modelling of the gravity survey and CRL continues to progress a General Permitted Development Order planning authorisation from Cornwall Council for a potential drill programme at Redmoor, to the west of the current resource, aimed at near surface tin.

During the quarter, the CRL team successfully negotiated a 10 year extension to the Redmoor exploration licences, with maturity now in 2037. This clearly establishes the Company’s footprint in the Cornish mineralisation region, which has recently been the focus of increasing investor interest.

Commenting, John Peters, Managing Director of Strategic Minerals, said:

“The resumption of demand from the largest Cobre client combined with the long-awaited formal extension of access for five years, has placed the Company on a solid cash flow footing for the years ahead.

“With an expectation of recommencement of operations at Leigh Creek this year and ever greater focus on mining in Cornwall combining with our licence extension, the Board and Management are looking forward to a promising future for the Company in 2022.”

For further information, please contact:

Strategic Minerals plc

+61 (0) 414 727 965

John Peters

Managing Director

Website: www.strategicminerals.net

Email: info@strategicminerals.net

Notes to Editors

Strategic Minerals plc is an AIM-quoted, profitable operating minerals company actively developing projects tailored to materials expected to benefit from strong demand in the future. It has an operation in the United States of America along with development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals likely to be highly demanded in the future.

In September 2011, Strategic Minerals acquired the distribution rights to the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects aimed at supplying the metals and minerals likely to be highly demanded in the future.

In May 2016, the Company entered into an agreement with New Age Exploration Limited and, in February 2017, acquired 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. The bulk of the funds from the Company’s investment were utilised to complete a drilling programme that year. The drilling programme resulted in a significant upgrade of the resource. This was followed in 2018 with a 12-hole 2018 drilling programme has now been completed and the resource update that resulted was announced in February 2019. In March 2019, the Company entered into arrangements to acquire the balance of the Redmoor Tin/Tungsten project which was settled on 24 July 2019 by way of a vendor loan which was fully repaid on 26 June 2020.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and brought the project temporarily into production in April 2019. In July 2021, the project was granted a conditional approval by the South Australian Government for a Program for Environmental Protection and Rehabilitation (PEPR) in relation to mining of its Paltridge North deposit and processing at the Mountain of Light installation. In early January 2022, an updated PEPR, addressing the conditions associated with the July 2021 approval, was lodged.


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