Strategic Minerals* (#SML LN) 0.43p, Mkt Cap £7.4m – Reports H1 profit as Leigh Creek moves ahead and Cobre masters Covid19 challenges Strategic Minerals reports both a pre and post-tax profit for the six months to 30th June 2020 reversing losses for the first six months of 2019. Pre-tax profit amounted to US$261,000 (H1 2019 loss – US$1.03m) while after tax profit is US$77,000 (H1 2019 loss – US$1.18m). Strategic Minerals reports a 30th June cash balance of US$533,000 (31st December 2019 – US$519,000). It is particularly encouraging to heat that “Overhead expenses reduced 25% across all aspects of the Company's corporate operations compared to the same period last year”. At the Cobre operation in New Mexico, operations continued despite the constraints of Covid19 containment measures and the cessation of sales to CV Investments, now in administration, to deliver underlying sales growth of 18% compared to last year. “Excluding CV Investments income and US$47,000 Covid-19 related assistance received from the US government, Gross Profit increased 68% on the same period last year”. Cobre has also secured continued access to the magnetite stockpiles for the 8th time. As previously reported, arbitrators awarded a US$21.9m settlement against CV Investments and in favour of Cobre’s operator, Southern Minerals Group although as Strategic Minerals has cautioned in the past and Chairman, Alan Broome confirms in today’s announcement “whether the Company will receive any funds from this claim will be dependent on the outcome of the receivership of CV Investments”. Today’s announcement reiterates that the company’s long term strategic focus remains on the development of the Leigh Creek Copper project in South Australia and of the Redmoor tin/tungsten project in Cornwall. At Leigh Creek, the submission of the Programme for Environmental Protection and Rehabilitation (PEPR) and the completion of feasibility studies has “moved the project along to the point where it currently awaits the final sign off of the formal PEPR and financing to commence operations”. Mr. Broome comments on the recent strength of copper prices which have “improved the project's forecasted profitability and … leaves] … the Board …confident that 2021 will see full scale production re-commence at Leigh Creek”. Acquisition of the balance of the Redmoor project is now complete and “It is expected that an expressions of interest program to identify future joint venture partners for the project will be concluded by the end of the year and that the significant work undertaken to date in identifying the size and potential of the Redmoor resource will be recognised and rewarded”. Mr. Broome commended the company’s staff, management and advisors “for their support and hard work on our behalf during the period … … to further progressing our key strategic goals in 2020 and pushing onto a brighter 2021”. Conclusion: Despite the considerable challenges of the Coronavirus pandemic, Strategic Minerals has remained profitable during H1 2020 with rising sales from its magnetite operations at Cobre, reduced corporate overheads and further progress on its two main development projects at Leigh Creek, where it expects to resume full scale production during 2021, and at Redmoor. *SP Angel acts as Nomad and Broker to Strategic Minerals
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