Strategic Minerals handed control of Kiwi coal licence

AIM-listed mine developer Strategic Minerals has been handed control of a key coal licence by the New Zealand government, which the company said was a "crucial stepping stone" in its plans.

SML's interest in the Tatu coal project in the North Island of the country began with its agreement to acquire 51% of the project's owner, King Country Mining, in March.

As part of the deal SML still has until next January to prove its financial capacity to complete the mine before it can acquire the remaining 49%, otherwise King Country's vendor has the right to buy back the 51% interest for NZ$1.

"The New Zealand government's approval to the change in ownership of King Country Mining is an important and crucial stepping stone in our plans to develop the Tatu mine," said SML managing director John Peters.

"We are currently well developed in our mine plan and are in discussions with suppliers which we believe, in conjunction with our recent capital raising, will provide the vendor of KCM sufficient comfort on Strategic Minerals' financial capacity to complete the project."

He added that SML's recently completed fundraising provided the ability to continue preliminary works, including a bulk sample to assist in coal analysis and customer evaluation.

Mine construction is expected to begin by the year end, with completion of the mine in mid-2016.

"We are aiming to achieve some sales during the construction period with greater sales volumes expected after completion of the mine," Peters said.