Strategic Minerals reports on de-risking progress at Leigh Creek

The AIM-traded firm reported a $30m combined pre-tax cash surplus from Paltridge North, Lynda and Lorna Doone, and confirmed the adoption of a long term, three-phase development programme for the existing licenses and surrounds.

It said full-scale production would commence with the lower-risk Paltridge North deposit, and added that it had identified the need to increase capacity at the Mountain of Light plant to 300 tonnes per month.

The feasibility study on the first element, Paltridge North, which was undertaken by Mining One and other internal consultants, indicated a cash surplus going forward of $6.4m.

It added that the updated internal feasibility of the second stage development of Lynda and Lorna Doone indicated a cash surplus of $29m.

Analysis by Mining One indicated that an owner-operated mining approach would provide quicker payback and greater flexibility in mining, with the board saying the first stage would provide a “solid platform” to expand the Leigh Creek Copper Mine by both developing known resources with further exploration, and provides merger and acquisition potential from nearby tenements.

“The company's development of the Leigh Creek Copper Mine has been undertaken carefully to identify all the key risks associated with this project, and especially those that impacted previous options,” said managing director John Peters.

“The feasibility study and associated documentation is ready to be submitted for permitting and soon thereafter, subject to regulatory approval and financing, recommencement of operations with a very short lead time.

“The company has been focussed on ensuring this project is on the surest footing for both the company and for prospective partners and investors.”

Throughout the de-risking process, Peters said the firm had been in talks with various parties to secure adequate funding to restart sales at the Leigh Creek Copper Mine.

“Advanced discussions are ongoing and whilst no agreement has yet been reached, the board remains confident that there will be a successful outcome to move Leigh Creek forward.”

At 1446 GMT, shares in Strategic Minerals were down 11.19% at 0.6p.