LONDON (ShareCast) - (Sharecast News) - Strategic Minerals updated the market on its cash position and ore sales at the Cobre magnetite operation in New Mexico for the September quarter on Tuesday, reporting that annual sales totalled $2.87m for the 12 months ended 30 September.
The AIM-traded firm said group cash balances totalled $0.56m at period end on 30 September.

It said the "moderate decline" in annual sales could be mainly attributed to a spike in sales last year, linked to an increased demand for reinforced concrete, for which magnetite is an input.

Since its quarterly report in June, Strategic Minerals said there had been no significant news from the receiver appointed by the US Securities and Exchange Commission (SEC) in relation to the previously-notified $21.9m arbitration claim by the company's wholly-owned subsidiary, Southern Minerals Group, against CV Investments.

As it had noted previously, the receiver had identified more than $8m in liquid assets relating to its receivership of CVI to date, although there could be no certainty of what proportion of that could be attributable to Strategic Minerals, if any, at the current time.

The company said it would update the market with details as and when they were provided by the receiver.

On the financial front, Strategic said that while after-tax profitability from Cobre continued to cover corporate overheads and provide a "small surplus" of around $0.2m per annum, costs associated with moving forward both the Leigh Creek copper and Redmoor tin-tungsten projects resulted in reducing cash balances.

With the Leigh Creek copper mine (LCCM) expected to move into production, and generate revenue, next year, subject to finance, it was expected that may not be the case in 2022.

To "prudently ensure" there was an adequate cash balance in the company at all times, and to move the projects forward until they become self-funding, the firm said it had raised a further £0.4m gross in October, which included participation by directors Peter Wale and John Peters.

"Cobre sales remain strong, and the company continues to move its projects forward," said managing director John Peters.

"The company has had significant discussions associated with debt style funding for the LCCM project and believes the rising copper price will result in securing such funding to allow the commencement of production at Leigh Creek which, subject to finance, is expected to commence in the first quarter of 2022."

At 1222 BST, shares in Strategic Minerals were down 1.88% at 0.42p.

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