Strategic Minerals renegotiates acquisition of Leigh Creek Copper Mine

Diversified mineral production and development company Strategic Minerals announced on Friday that, after the successful completion of technical and financial due diligence on the Leigh Creek Copper Mine company, it has agreed to continue with the acquisition on renegotiated terms.

The AIM-traded firm had outlined in an announcement on 16 October that it intended to pay a total consideration of AUD 5m (£2.85m), predominantly by way of royalties in combination with cash, shares and assumption of debt.

Upon completion of due diligence, Strategic said it renegotiated terms for the acquisition of Leigh Creek through an equal mixture of cash and equity totalling AUD 3m, subject to documentation.

“The outright acquisition of Leigh Creek Copper Mine for an up-front payment of AUD 3m is a significant step forward for the company,” said Strategic Minerals managing director John Peters.

“The renegotiated sale terms reflect the confidence we derived from our due diligence and the vendor's acceptance of payment certainty.”

Peters said the company was “delighted” to add copper exposure to its portfolio of strategic projects.

“We believe that demand and supply factors for copper over the next five years will lead to price increases going forward, which in turn will add substantial shareholder value to SML.

“The outright acquisition, as opposed to the previous arrangement involving a substantial portion of the consideration being paid by way of royalties, provides the company with flexibility to maximise the potential from the tenements, as well as the freedom to progress the project at its own pace.”

Peters added that the new capital expenditure structure would allow Strategic to minimise risks, notably extraction risk.