Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, wishes to inform the market that its wholly owned subsidiary, Southern Minerals Group, operator of SML’s Cobre magnetite stockpile in New Mexico, USA, has agreed to a temporary (three month) suspension to the minimum tonnage requirement under its contract disclosed on 20 April 2017. The minimum tonnage requirement is 4,000 tons of magnetite per month.
SMG’s client has indicated that it is awaiting an environmental planning approval which has taken longer than expected and has requested that the minimum tonnage requirement be suspended for March, April and May of 2018. Given the substantial importance of this client to SMG, having already taken and paid for circa 40,000 tons of magnetite, SMG has agreed to such a temporary suspension of this aspect of its contract.
It should be noted that this does not change, in any manner, the underlying contract with the client, which has a requirement to purchase a further circa 360,000 tons and will, after May, continue to have a minimum purchase requirement of 4,000 tons per month. SMG reports that the client is currently within its payment arrangements with SMG and has, in escrow, a US $250,000 deposit securing its contract.
Commenting, John Peters, Managing Director of Strategic Minerals, said:
“The temporary suspension of the minimum shipment requirement demonstrates the close working relationship that Strategic Minerals and Southern Minerals Group have with our long-term clients. This decision has been made to maximise the outcome for both parties, without detriment to the Company.
“Last quarter’s figures did not include any suspended sales, demonstrating that, even without these sales, both SMG and the Company as a whole are profitable.
“Having dealt with similar environmental approval processes before, the Company is understanding of the situation and looks forward to resumption of normal shipments in June.”
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