Strategic Minerals negotiating finance for Leigh Creek

Producing mineral company Strategic Minerals updated the market on funding progress for the Leigh Creek Copper Mine project, as well as addressing the conditional elements of the project's programme for environmental protection and rehabilitation (PEPR), on Friday.

The AIM-traded firm said negotiations on the provision of a minimum $10m (£7.34m) loan facility to the mine, guaranteed by the company, were being progressed with an unnamed “top global” bank.

It said the bank had been undertaking due diligence, although there was no guarantee of a loan being offered as yet.

Constructive meetings had been held with South Australia’s Department of Energy and Mines (DEM), with issues identified by the department relating to the clarification and elaboration of comments in the submitted PEPR.

DEM confirmed its desire to make the PEPR unconditional as soon as possible, after the information requested was provided.

A scope to reduce the size of the environmental security deposit had been identified, the board said, subject to the mine’s “reasoned argument”.

An updated mine plan, meanwhile, provisionally showed an additional 600 tons of recovered copper, worth $4.5m in revenue, as increased copper prices allowed the scope to economically expand the open pit’s footprint.

Information requirements were being progressed, and were set to be submitted to the DEM by the end of the year, with operations now expected to begin during the first quarter of 2022, subject to funding.

“The company is encouraged by the support shown by the Department of Energy and Mines for mining and processing the Paltridge North deposit,” said managing director John Peters.

“All efforts are being undertaken to get operations restarted as soon as possible at Mountain of Light, Leigh Creek.

“However, the need to meet additional DEM requirements and the impact of the pandemic have been contributing factors to progressing the recommencement of production.”

Peters said the company expected that the due diligence being undertaken by a “respected global bank” would lead to a letter of offer for a minimum $10m loan facility.

“Such funding, if concluded, would not only permit the company to recommence mining operations at Leigh Creek, but also provide funds for exploration and expected ASX listing costs.

“We will, of course, immediately update the market should we receive a letter of offer.”

At 1216 BST, shares in Strategic Minerals were down 3.33% at 0.44p.