Strategic Minerals* (#SML LN) 0.43p, Mkt Cap £7.4m – Confirmation of Leigh Creek environmental submission
Strategic Minerals confirms that, in line with its previously announced plan, it has now submitted its Programme for Environmental Protection and Rehabilitation (PEPR) for the Paltridge North deposit at its Leigh Creek Copper Project with the relevant authorities in South Australia.
The company comments that “Given the level of detail reviewed in the draft submission and the encouragement received to date by the South Australian government, the Company feels confident that an approval will be forthcoming before the year end, paving the way for full scale operations to commence in 2021, subject to finance”.
Strategic Minerals also says that a review and update of the likely capital cost to develop the Lynda/Lorna Doone deposits, located approximately 70km north of Paltridge North, is underway conducted by “PPM Global, who have operated the Mountain of Light plant for both the Company and the previous owners, Phoenix Copper”.
The announcement reconfirms that the “proposed funding of the development of Lynda/Lorna Doone is intended to be sourced out of project cash flows from the LCCM mine subject to the recommencement of production”.
Strategic Minerals also draws attention to the current copper price levels and points out that “with many of the market commentators indicating further upward pressure on prices, the Project's anticipated economics have become more robust”.
Managing Director, John Peters underlined the company’s commitment to develop a second income stream in order to build “long term wealth within the Company” and explained that submitting the PEPR “and the strong recovery in copper prices increases the likelihood that 2021 will see the full-scale re-commencement of operations at Leigh Creek”.
Conclusion: Submission of the PEPR provides a reasonable expectation of formal approval by the end of 2020 and a resumption of full scale operations during 2021. A review of capital development costs for the Lynda and Lorna Doone deposits currently underway should help to reduce project development risks further while the current robust copper price environment should benefit overall project economics. We look forward to further details on these economic aspects by the end of September.
*SP Angel acts as Nomad and Broker to Strategic Minerals