Strategic Minerals slides on "misinterpretation" of AGM statement

In an announcement released on the day of Strategic Mineral's AGM, managing director John Peters said despite corporate overheads being slashed 60% in the second half, the core Cobre iron ore project in New Mexico remained profitable but was "not sufficient to cover the company's total corporate overheads, which makes the addition of other projects imperative".

Peters, who was recently joined on the board by new chairman Alan Broome, who has extensive knowledge and experience of the New Zealand coal market, said the board had reviewed possible acquisitions and considered that there was "potential to acquire small sized projects, with near term cash flows, servicing local markets and to bring a number of these together with the vision of positioning Strategic Minerals in two to three years as a profitable operating mining company".

A spokeswoman for the company said Peters' enthusiastic statement has been "misinterpreted" as, although the statement does state that the new acquisitions are imperative and that Cobre doesn’t cover group overheads, "the company has made great headway in 2015".

Indeed, the company remains cash flow positive and just raised £1m to fund the acquisition and development of one such project as Peters was citing, namely the Tatu coal mine project in the North Island of New Zealand.

Moreover, while Cobre has been hit by the iron ore price, making international sales uneconomic, its recent focus on the domestic market has seen domestic sales rise 25%.

Last month the group reported a much reduced annual revenues of $6.08m but losses before tax also slashed to $6.1m.