Strategic Minerals* (#SML LN) 0.55p, Mkt Cap £8.1m – Draft environmental programme submitted for Leigh Creek
Strategic Minerals reports that it has now lodged a draft programme for environmental protection and rehabilitation at its Leigh Creek (LCCM) copper project site with the South Australian regulators.
Strategic Minerals is working to re-start copper production at Leigh Creek and the company explains that the procedure for ʺa licence to operate is for companies to lodge a draft proposal which is circulated to relevant departments within the South Australian state government. This process normally takes around two months and feedback is then addressed/incorporated into a final PEPR lodgement. Generally, the process takes around three to four months from lodgement of the draft PEPR to the granting of the approval.ʺ
The production of a copper cement product at Leigh Creek has been identified as a second revenue stream for the company which currently operates a magnetite tailings business at Cobre in New Mexico.
The company cautions that it is uncertain about the impact of restrictions relating to the containment of Covid19 on the timing of the environmental approval for Leigh Creek but Managing Director, John Peters, explained that ʺWhilst the Leigh Creek project is taking longer to progress than anticipated, the Board considers that LCCM … is a key asset within its portfolio. The continued strength of the Cobre operation, which the board expects to produce circa US$3m in sales and US$1.5m in after tax cash in 2020, provides the Company adequate scope to locate and execute with a joint venture partner. Again, this emphasises that, subject to financing, a second income stream for the Group is relatively at hand."
Conclusion: The permitting of Leigh Creek is an important element in Strategic Minerals’ plan to develop a second source of income and although Covid19 control measures introduce uncertainty over timing, the submission of the draft environmental plan moves the process ahead by providing the regulatory authorities in South Australia the opportunity to consider the merits of the development plan.
*SP Angel acts as Nomad and Broker to Strategic Minerals