Q3 Cobre Magnetite Sales and Cash Balance Update

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16 October 2019

Strategic Minerals plc

("Strategic Minerals" or the "Company")

September Quarter 2019 Magnetite Sales and Cash Balances

Strategic Minerals plc (AIM: SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to provide the following update on the Company's cash position and ore sales at the Cobre magnetite operation in New Mexico, USA ("Cobre") for the quarter ended September 2019.

Highlights

·; Resumption of regular demand from existing Cobre clients (excluding the major client)

·; Underlying sales revenue in the September 2019 quarter 26.3% higher than in the September 2018 quarter

·; Group cash balance of US$0.765m as at 30 September 2019

·; Arbitration meeting with the major client is being scheduled 

Sales update: Cobre magnetite tailings operations

Underlying sales volumes at Cobre improved significantly during the September quarter, reflecting the resumption of regular demand from a number of clients affected by plant maintenance. Sales revenue for the September quarter includes a recognition of forfeiture of US$375,000, relating to deposits from the major Cobre client. Disregarding this deposit, underlying sales revenue during the quarter was 26.3% higher than the comparative quarter in 2018. Sales revenue for the 12 month period ended 30 September 2019 was weaker than in 2018 and 2017 due to the adverse impact caused by Cobre's major client's diminished purchases. Sales revenue for the 12 month period to 30 September 2019 includes deposits totalling US$750,000 from the major client which have now been forfeited. As legal action has commenced in relation to this contract, expectations on future sales are focused on those arising from the other existing customers. The Company continues to look to grow sales organically.

Sales comparisons on quarterly and 12 month periods to 30 September 2019, along with associated volume details, are shown in the table below:

A claim has been made under the contract with the major client and, as per this contract, an arbitration meeting is being scheduled.

Financials and Operations

At 30 September 2019, the Group's non-restricted cash balance was US$0.760m (30 June 2019: US$0.319m).

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"Sales volumes at Cobre rebounded and this augurs well for sales over the coming year.

"The progression of a formal claim against the major client at Cobre has resulted in the Board having to reconsider the pace at which it can progress planned projects. We also remain in various funding and investment discussions. The Board intends updating the market on these plans as they formalise."

Notes to Editors

Strategic Minerals plc is an AIM-quoted, operating minerals company actively developing projects prospective for battery materials. It has an operation in the United States of America and Australia along with development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals being sought in the burgeoning electric vehicle/battery market.

In September 2011, Strategic Minerals acquired the distribution rights to the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects orientated to supplying the burgeoning electric vehicle/battery market.

In January 2016, the portfolio was expanded with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia prospective for cobalt, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd. In September 2018, the Company entered contracts for the sale of certain CARE tenements identified as gold targets.

In May 2016, the Company entered into an agreement with New Age Exploration Limited and, in February 2017, acquired 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. The bulk of the funds from the Company's investment were utilised to complete a drilling programme that year. The drilling programme resulted in a significant upgrade of the resource. This was followed in 2018 with a 12-hole 2018 drilling programme has now been completed and the resource update that resulted was announced in February 2019. In March 2019, the Company entered into arrangements to acquire the balance of the Redmoor Tin/Tungsten project. This was completed on 24 July 2019.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and brought the project into production in April 2019.