Strategic Minerals announces improved 1Q20 sales and cash balance

Strategic Minerals plc (AIM: SML: FOLLOW) has announced Sales volumes at Cobre continued to improve during 1Q20. However, like-for-like comparisons are somewhat flattered due to the factory maintenance undertaken by two of Cobre’s clients during the same period last year.  

Notwithstanding the above, the 8.8% increase in annual sales highlights the solid organic growth being generated at Cobre.  Furthermore, the Company made payments of interest and a scheduled capital reduction payment of AUD 0.3m (circa USD 0.2m) which related to the purchase of the balance of Cornwall Resources Limited.  Sales comparisons on quarterly and annual periods to 31 March 2020, along with associated volume details, are shown in the table below: 

 

Tonnage 

 

Sales (US

#39;000)  

  Year  

  3 months to March   

  12 months to March   

 

  3 months to March   

  12 months to March  

2020 

12,953 

45,998* 

 

764 

2,698* 

2019 

9,471 

42,401 

 

554 

2,480 

2018 

21,646 

92,351 

 

1,423 

6,228 

* For comparison purposes, US£0.75m forfeited by the major Cobre client has been excluded from sales figures. 

Continuing Operations On Sunday 12 April 2020, the copper mine, where the magnetite stockpile operates from, temporarily suspended operations as a few employees tested positive for Covid-19. However, due of the early introduction of social distancing at the magnetite stockpile, operations have been permitted to continue and protocols have been adopted to effectively operate with a zero contact both between on-site employees and with trucks arriving at the site.

This is being achieved through arrangements, established by the Office Manager Stan Brown, for contactless provision of load dockets, forgoing of cleanliness inspections and communication with truck drivers through CB radios. In this manner Southern Minerals Group LLC personnel and their clients can effectively ensure zero contact and responsible social distancing.   Outlook

Sales post 31 March continue in line with Company expectations.  Arbitration in relation to the Company’s claim under the contract with the major client continues to follow the timetable disclosed in the Company’s Update released on 2 March 2020 with a result expected by 30 May 2020.  Shares in Strategic Minerals closed at 0.5p as of 14 April 2020. 

Commenting, John Peters, Managing Director of Strategic Minerals, said:During this period, the Company greatly appreciates both the continuity of activity at Cobre, due to its identification as an essential service provider, and the organic growth seen in sales over the past year.  We expect this growth trend to continue in 2020 despite the unusual market conditions. Operations at Cobre have always provided the highest level of safety for employees and these efforts have been lifted again to ensure all employees are safe in this work environment.  Our arbitration process remains on track and we expect a favourable outcome for the Company to be confirmed later in May. 

Efforts continue to move our projects forward and, whilst the current environment has slowed the pace of some engagements, the Board and Management remain confident of future progress.” 

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