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LONDON (Alliance News) - Strategic Minerals PLC said Friday it has worked to reduce its overhead during the first quarter of 2015 to bring it in line with lower sales turnover from its Cobre mine in New Mexico, and has continued talks with creditors over ongoing disputes.
The company is in dispute over some amounts owing to creditors, and said it believes it will potential expunge or reach an appropriate settlement for these outstanding creditor positions, and believes that cash flows from Cobre and the reduction in overheads should ensure it has enough funds to continue existing operations.
It said it has now reduced overheads to under USD1 million.
Significantly depressed global iron ore prices have hit its Cobre operations, and sales of domestic magnetite fell to USD313,000 for the quarter, compared to USD485,000. Tonnage fell to 4,707 from 7,203, although the company noted that in the previous year there was an unusually large spike in domestic demand.
Although it had investigated the production of a heavy dense media product last year, this project is on hold until the market improves or it can secure customers, Strategic Minerals said.
During the quarter it agreed to acquire the Tatu coal project in New Zealand and signed a memorandum of understanding for a coal project in China. It relinquished its tenements for the Jotanooka project in Western Australia, as despite believing there is potential in the tenements the fall in iron ore prices suggests commercialisation of these resources are "at least seven years away". It is also conducting a review into its Iron Glen tenements in Australia.
Over the next six months, it is aiming to complete the acquisition of Tatu, including securing funding, and to acquire an additional project that meets its investment parameters.
"The board and management have identified some good acquisition opportunities during a difficult time for global mineral markets," said Acting Executive Chairman John Peters.
Shares in Strategic Minerals are trading down 5.3% at 0.639 pence Friday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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