Critical Mineral Resources PLC Metals Trading Update

RNS Number : 8708M

Critical Mineral Resources PLC

20 November 2024

 

Critical Mineral Resources PLC

('CMR' or the 'Company')

Metals Trading Update

Critical Mineral Resources PLC, the exploration and development company focused on critical metals and minerals in Morocco is pleased to announce it has commenced metals and industrial minerals trading. This will provide the Company with a source of near-term cash flow and profits that will support the core mission of acquiring and developing advanced mine development opportunities in Morocco.

Trading venture background

Since the initial metals trading announcement in March, the Company has been gathering momentum to establish a position in the Moroccan market. Capitalising on the Board's experience and knowledge of Morocco's mining industry, the Company has formed a partnership with a Moroccan trading company.

Together we will source metal and mineral concentrates and raw ores from Morocco's distinct mining regions and arrange delivery to the customer. These will consist of buyers who take delivery in Morocco as well as shipments overseas.

Joint venture agreement

The Company has entered into a joint venture agreement with the aforementioned Moroccan company, which has access to sources of mined materials and international customers. Our profit share agreement will be 70% to the Company and 30% to our partner.

The joint venture's trading strategy will initially focus on low-risk and short term trading opportunities, aggregating product from smaller producers and upgrading lower grade products using our partner's operational concentrating facility. Amongst other aspects, profit margins will depend on the type of trading activity but will range from 3% up to 20% in some cases. The trading arm of the Company is now operational and is expected to deliver several trades over the coming weeks which will lead to trading updates later this year and next.

Mine development opportunities

The Company has made excellent headway in its strategy to secure one or more high quality development opportunities. Although it is not yet ready to provide a detailed update, the Board would like to assure investors that progress has been achieved and the Company expects to provide significant, positive news during Q1 2025.

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Charlie Long (CEO) commented: Although reaching this milestone has taken longer than expected, we are extremely pleased to be adding a cash generating business to the company which has the potential to grow into something substantive. There are multiple examples of successful trading companies which started in a similar manner.

The Moroccan mining industry presents a range of specific opportunities based on its natural resources, and the resultant mining and minerals trading activities. CMR has the enviable advantage of a COO who is embedded in this sector, someone who has metals trading, mine management, permitting and geological expertise. Our Moroccan operations, and equally our shareholders, benefit from this experience and from the protection it brings.

Our new JV partner has a long history of trading in manganese, lead-zinc, barite, speciality metals, oligiste and other industrial minerals. Our first trade is likely to involve a speciality metal, although trades in zinc and lead are also being considered.

Background

Morocco's mining industry includes phosphate (OCP Group), manganese, barite (chemical and petroleum grades), lead-zinc, zinc-lead, copper-silver, gold-silver (Aya Gold & Silver), oligiste, cobalt and gold. There is also production of antimony, tungsten and industrial minerals such as feldspar, fluorspar and gypsum. The map below shows the main mine regions and deep water ports that handle the majority of Morocco's exported metals and minerals.

Fig 1: Morocco simplified mining regions

Source: Company

Related party

Noureddine Sabraoui, the Company's Chief Operating Officer, is a 50% beneficial owner of the Moroccan trading company. As such, the joint venture agreement is considered to be a Related Party Transaction. The directors of CMR confirm that having exercised reasonable care, skill and diligence, that the transaction is fair and reasonable insofar as the shareholders of Critical Mineral Resources PLC are concerned.

CONTACT:

Critical Mineral Resources PLC Charles Long, Chief Executive Officer	[e-mail]
Novum Securities Jon Belliss	[phone]

 

Notes To Editors

Critical Mineral Resources (CMR) PLC is an exploration and development company focused on developing assets that produce key commodities for the global economy including those essential for electrification and the clean energy revolution. Many of these commodities are widely recognised as being at the start of a supply and demand supercycle.

CMR is building a diversified portfolio of high-quality metals exploration and development projects in Morocco, focusing on copper, manganese and potentially other critical minerals and metals. CMR identified Morocco as an ideal mining-friendly jurisdiction that meets its acquisition and operational criteria. The country is perfectly located to supply raw materials to Europe and possesses excellent prospective geology, good infrastructure and attractive permitting, tax and royalty conditions. In 2023, the Company acquired an 80% stake in leading Moroccan exploration and geological services company Atlantic Research Minerals SARL.

Since taking over the CMR in 2022, the current management has completed a comprehensive strategic review and restructuring of the business and implemented its clear strategy to maximise exploration and resource development opportunities for the benefit of all stakeholders. The Company is listed on the London Stock Exchange (CMRS.L). More information regarding the Company can be found at www.cmrplc.com

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