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SML Strategic Minerals Plc

0.252
0.002 (0.80%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Strategic Minerals Plc LSE:SML London Ordinary Share GB00B4W8PD74 ORD 0.1P
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.002 0.80% 0.252 0.20 0.25 0.265 0.225 0.25 5,774,734 16:35:08
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
Iron Ores 2.46M 84k 0.0000 N/A 4.44M

Strategic Minerals PLC Interim Results - Half Year to 30 June 2018 (2332C)

28/09/2018 7:00am

UK Regulatory


Strategic Minerals (LSE:SML)
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TIDMSML

RNS Number : 2332C

Strategic Minerals PLC

28 September 2018

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

28 September 2018

Strategic Minerals Plc

("Strategic Minerals", the "Group" or the "Company")

Interim Results - Half Year to 30 June 2018

US $2.4m Value Added Through Acquisition of Leigh Creek Copper Mine

Strategic Minerals Plc (AIM: SML; USOTC: SMCDY), the diversified mineral development and production company, is pleased to announce its unaudited interim results for the half year ended 30 June 2018.

Financial Highlights:

   --    After tax profit of $2,406,000 (H1 2017 $158,000) 

-- Corporate activity, through the acquisition of Leigh Creek Copper Mine ("LCCM"), adds significant value as noted by the Company booking an after tax profit of $2.4m (AUD $3.1m) on its purchase. The price at which the Company was able to purchase LCCM, while a fair price for its vendors, reflected the limited financial resources the vendors had available to progress the project to an operational level. The profit booked, reflects the independently estimated added value the Company has already brought to the project through its ability to supply such capital.

-- Pre-tax profit of $1,246,000 (H1 2017: $690,000) from the Company's Cobre operation, prior to intercompany management charges, continues to underpin corporate cash flow.

   --    Directors exercised 15m vested options and acquired further stock in the Company. 
   --    Issue to Directors of 128m options over three tranches vesting at 5.5p, 7.5p and 10.0p. 

-- Investment in Cornwall Resources Limited ("CRL") of $107,317, the owner of the Redmoor tin-tungsten project, maintaining the Company's 50% interest in CRL.

-- Issue of 38,700,900 SML shares, in April 2018, issued at the month of March 2018 Volume Weighted Average Price ("VWAP") of 1.9067 pence per share as part payment for the acquisition of LCCM.

-- Unrestricted cash and cash equivalents at 30 June 2018 were $1,988,000 (31 Dec 2017: $3,706,000). The reduction in cash balances reflects the acquisition of LCCM, payment of US tax liabilities and investment into CRL.

Corporate Highlights:

-- Completion of the acquisition of Leigh Creek Copper Mine ("LCCM") in the North Flinders Ranges in South Australia through its wholly owned subsidiary Ebony Iron Pty Ltd. The Company also organised a team to undertake the recommissioning of the mine and expects LCCM to be in production in 2019. This is of huge strategic importance to the Company as the commencement of operations will see the creation of a second cash flow stream. Additionally, access to the project and its cash flows is 100% controlled by the Company.

-- The Board was expanded to four members with the addition of Mr Jeffrey Harrison. His extensive practical mining engineering skills are expected to prove invaluable as the Company progresses its LCCM and Redmoor projects.

-- Access to the Cobre magnetite stockpile was rolled over in line with the relationship the Company has with the mine owner, and the Company expects this to continue in the future.

-- Sales contract re-negotiation with major Cobre client. The Company negotiated with one of Cobre's major clients which, due to internal issues, had been unable to take the material required under their contract. The Company and the client agreed to amend the existing contract such that the client could make a series of quarterly payments, placing the Company in approximately the same cash position as if the contract had been fully met.

-- Resource update for the Redmoor project. A resource update noting an almost doubling of the high grade Inferred Mineral Resource at Redmoor was published by Cornwall Resources Limited ("CRL") and identified the need for further drilling to expand the resource base and improve the project's economic viability.

-- Investment in CRL and the provision of an underwriting agreement for our joint venture partner's equity. The Company considered that momentum needed to be maintained at Redmoor and that a commitment and commencement of a drilling programme for 2018 was critical to the development of the project. At the time, SML's joint venture partner, New Age Exploration Limited ("NAE") did not have the financial capacity to commit to the programme but was preparing for an equity raise. The Company took the view that it was imperative for the momentum of the project that drilling commence and, accordingly, underwrote NAE's portion of the programme, whilst providing NAE the longest possible time in which to make their equity payment. Subsequently, NAE completed an equity raise and the underwriting was cancelled.

-- The Company hosted a Shareholders' Meeting following its AGM. This provided shareholders the opportunity to interact with the full Board in an informal environment.

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

"The first half of 2018 has been a pivotal period for the Company, most notably with the completion of the watershed acquisition of Leigh Creek Copper Mine. We believe the acquisition of this asset and the expected commencement of its operations in 2019 provide a strategically significant shift in the risk profile of the Company. The addition of a second revenue stream, particularly one derived from a wholly owned asset, ensures the sustainability and access to cash flows that form the base on which the Company expects to create long term growth for its projects and provide value to its shareholders.

"We are also delighted to welcome Jeff Harrison to our Board. His arrival has significantly expanded the Company's skill base as it enters an extremely exciting period in the development of Leigh Creek, Redmoor and Hanns Camp."

For further information, please contact:

 
                                                                                  +61 (0) 414 727 
  Strategic Minerals plc                                                          965 
  John Peters 
  Managing Director 
  www.strategicminerals.net 
 
  Follow Strategic Minerals on: 
  Vox Markets: https://www.voxmarkets.co.uk/company/SML/ 
  Twitter: @SML_Minerals 
  LinkedIn: https://www.linkedin.com/company/strategic-minerals-plc 
  Facebook: https://www.facebook.com/search/top/?q=strategic%20minerals%20plc 
 
                                                                                  +44 (0)20 3470 
  SP Angel Corporate Finance LLP                                                   0470 
  Nominated Adviser and Joint Broker 
  Ewan Leggat 
  Laura Harrison 
 
                                                                                  +44 (0)7825 916 
  Yellow Jersey PR                                                                715 
  Financial PR 
  Charles Goodwin 
  Joe Burgess 
  Henry Wilkinson 
 
 

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 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 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 that are prospective for cobalt, gold, 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 that have been 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. Phase 1 of the 2018 drill programme is underway and augurs well for additional drilling to be undertaken.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 2019.

Chairman's Statement

Financial results

The results for the first half of 2018 are pleasing as they reflect the value added by the Board and Management from the judicious acquisition of Leigh Creek Copper Mine. This augurs well for the Company being able to report a full year 2018 result that will exceed its record performance in 2017. After tax profit for H1 2018 of $2,406,000 not only compares well with the previous period (H1 2017 $158,000) but also compares well with the full year performance in 2017 of $1,586,000.

Unrestricted cash on hand as at 30 June 2018 was $1,988,000 and is expected, when combined with cash flows being generated at the Cobre operations, to assist in funding development of the Leigh Creek operations whilst allowing for minimal dilution to current shareholders.

Operating profit of $1,246,000 from our Cobre magnetite stockpile, prior to intercompany management fees, marked an 80% increase in profitability versus the first half of 2017 ($690,000). This increase in profits was achieved despite our major client not being able to take their minimum purchase levels during the half year.

Corporate overheads of $838,000 have almost doubled (H1 17 $435,000) and are reflective of the substantial growth the Company has undertaken, however the Board's commitment to maintain lean corporate overheads remains in place to ensure the Company's growth is consistent with its activities.

Addition of New Director

In February, the Board appointed a fourth Director, Jeffery Harrison. The growth of the Company was considered sufficient to justify the addition of another Director. The Board identified Jeff as a suitable candidate given his strong background in mining engineering, his knowledge of Cornish mining and his Australian mining experience.

Strategy Focus

The Board has continued to focus on the appropriate strategy for the Company and, as a multi-resource miner, considers this helps to differentiate the Company from many of its peers.

The Company continues to maintain a three-pronged approach to investing in diversified material projects, concentrating on:

1. Coal and Bulk Materials - potential projects in this sector that are tied to current contracts and further offtake arrangements at attractive prices.

2. Advanced Materials - considering project opportunities in materials where it expects demand to increase over the coming years (such as rare earth elements and graphite).

3. Metals - identifying projects exposed to metals that it expects to have price improvements over the next three to five years (such as cobalt, nickel, copper and tin-tungsten).

This strategy is combined with the Company's desire to balance cash requirements through a mix of cash, near cash, brownfields and greenfields projects designed to utilise cash generated from operations for the greatest long term benefit of shareholders.

Accordingly, the Company invests surplus cash flow from Cobre into the recommencement of operations at Leigh Creek Copper Mine and drilling programmes for its two major exploration projects - CARE (nickel and cobalt focused) and Redmoor (tin/tungsten focused).

Cobre Operations

The Company has worked closely with the management at Cobre in handling negotiations with a key client. The client needed, due to their own circumstances, to vary their contract and a temporary compromise has been implemented that provides Cobre approximately the same cash position it would have been in should the contract have been honoured as originally written.

This substantial cash flow continues to underwrite operations and minimise calls on shareholders for capital.

Leigh Creek Copper Mine

The first half of 2018 has seen the Company complete the acquisition of the Leigh Creek Copper Mine.

The Project is based in the northern Flinders Ranges of South Australia and is accessible from the township of Leigh Creek. It has three approved mining leases that cover a number of copper oxide deposits, including Lorna Doone, Lynda, Mountain of Light (Rosmann East and Paltridge South) and the Mount Coffin deposit. An estimated JORC 2012 compliant Resource of 3.61mt @ 0.69% copper for 24,900 of copper metal forms the base of the project. Additional, non JORC compliant ore sources of 1.8Mt @ 0.68% copper have also been identified within existing mining leases.

It was the Board and Management's belief that this represented exceptional value at the negotiated purchase price of AUD $3m and this has subsequently been confirmed by independent assessment which has placed the assets purchased at AUD $6.1m. This resulted in a gain of US $2.4m being recognised in the half year due to this bargain acquisition.

Post acquisition, the Company has moved quickly to set up a highly skilled team tasked to recommence mine operations in 2019. Existing contracts in place ensure that 100% of the production will be sold at 85% of LME prices.

This potential sizeable cash flow from Leigh Creek Copper Mine has a very strategic impact on the risk profile of the Company. The ability to have two revenue streams insulates the Company from risks that may impact on the Company and positions us for further growth.

The Board is confident that developments at Leigh Creek Copper Mine will help to drive company valuation through 2019.

Redmoor tin-tungsten project

In March 2018, a resource update indicating a 4.5Mt high-grade Inferred Mineral Resource was released. This represented an almost 100% increase over the high-grade Inferred Mineral Resource reported in 2015. The resource was defined in high-grade zones within the Sheeted Vein Systems and drilling had identified a further 4 - 6Mt high grade exploration target within the Sheeted Vein System.

In March 2017, the Company, through its 50% investment in Cornwall Resources Limited ("CRL") began a drilling programme at the Redmoor project located in the world class Cornwall tin-tungsten-copper mineralised district.

Scoping level mineral processing and underground mining studies were undertaken by Fairport Engineering Ltd (UK). To maintain this momentum a further drilling programme was commenced, and the Company provided its 50% contribution for drilling costs. Further, the Company underwrote the 50% contribution of its joint venture partner, New Age Exploration Limited ("NAE"). This ensured the timely commencement of drilling and certainty of funding, whilst providing New Age Exploration the longest time practical for it to raise its funding. After June, NAE was able to raise the required funding and the Company's underwriting commitment was cancelled.

Prior to undertaking the drill programme, an extensive community relations programme was undertaken and remains ongoing; the local community and Council are working closely with CRL in a highly collaborative manner.

CARE

During the first half of 2018, a 65 hole 3,863m air core drilling programme was completed at the Hanns Camp and Mt Weld Projects, This consisted of 25 holes totalling 1,290m being drilled at the Hanns Camp South Targets. Cumulate facies ultramafic lithologies were recognised in one area potentially identifying another komatiite lava channel-facies position prospective for nickel sulphide mineralisation.

Additionally, 40 holes totalling 2,573m were drilled testing a series of gold, nickel and rare earth elements targets in the Mt Weld group of tenements.

The Company engaged Dr Martin Gole, an internationally recognised nickel expert, to assess the significance of the drill results and the prospectivity for potential nickel sulphide mineralisation.

Issues of Capital

During the half year, Directors in the Company exercised 15,000,000 vested options and a further 38,700,900 shares were issued as part payment for the acquisition of Leigh Creek Copper Mine.

In February, in line with approvals received from shareholders in general meeting, Directors were issued 128,000,000 new options across three tranches which vest upon the share price staying above 5.5p, 7.5p and 10.0p for five consecutive days.

Safety

The Company continues to maintain a high level of safety performance with SML and its subsidiaries having no reportable environmental or personnel incidents recorded in the period. With the addition of Jeff Harrison as a Director, the Board took the opportunity to establish a separate Safety Sub-Committee chaired by Jeff, with Alan Broome AM as the other member.

I would like to take this opportunity to thank my fellow Directors, our management and staff in New Mexico, Cornwall, South and Western Australia, along with our advisers, for their support and hard work on your behalf during the period. Additionally, I would like to thank our clients, contractors, suppliers and partners for their on-going support.

Alan Broome AM

Non-Executive Chairman

28 September 2018

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE PERIODED 30 JUNE 2018

 
 
                                                      6 months       6 months        Year to 
                                                          to             to 
                                                       30 June        30 June      31 December 
                                                        2018           2017           2017 
                                                     (Unaudited)    (Unaudited)     (Audited) 
                                                        $'000          $'000          $'000 
  Continuing operations 
 
  Revenue                                                  2,120          1,440          5,642 
  Cost of sales                                            (391)          (272)          (914) 
                                                       _________      _________      _________ 
 
  Gross profit                                             1,729          1,168          4,728 
 
  Other income                                             2,464              -              - 
 
  Administrative expenses                                (1,386)          (860)        (2,308) 
  Depreciation                                              (36)           (48)           (48) 
  Share based payment                                       (92)           (91)           (41) 
  Share of net losses of associates and 
   joint ventures                                              1           (49)           (63) 
  Foreign exchange gain/(loss)                                 7           (20)           (34) 
  Gain on revaluation of investments                           -             58              - 
   of associates 
 
  Profit/(loss) from operations                            2,687            158          2,234 
 
                                                       _________      _________      _________ 
 
  Profit/(loss) before taxation                            2,687            158          2,234 
 
  Income tax (expense)/credit                              (281)              -          (648) 
                                                       _________      _________      _________ 
 
  Profit/(loss) for the period                             2,406            158          1,586 
 
  Other comprehensive income 
  Exchange gains/(losses) arising on 
   translation 
   of foreign operations                                    (93)             77            206 
                                                       _________      _________      _________ 
 
  Total comprehensive income/(loss)                        2,313            235          1,792 
                                                       _________      _________      _________ 
 
  Profit/(loss) for the period attributable 
   to: 
  Owners of the parent                                     2,313            235          1,792 
                                                       _________      _________      _________ 
 
  Total comprehensive income/(loss) attributable 
   to: 
  Owners of the parent                                     2,313            235          1,792 
                                                       _________      _________      _________ 
 
  Profit/(loss) per share attributable                  cents          Cents          cents 
   to the ordinary equity holders of the 
   parent: 
  Continuing activities - Basic                         0.19           0.01           0.13 
                                     -- Diluted         0.17           0.01           0.12 
 
 
   `            STRATEGIC MINERALS PLC 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

 
 
                                              30 June        30 June      31 December 
                                               2018           2017           2017 
                                            (Unaudited)    (Unaudited)     (Audited) 
                                               $'000          $'000          $'000 
  Assets 
  Non-current assets 
  Deferred Exploration and evaluation 
   costs                                          6,174            812          1,242 
  Property, plant and equipment                     295            130            257 
  Investments in joint ventures- equity 
   accounted                                      1,755          1,316          1,611 
  Restricted cash                                   100            100            100 
  Trade and other receivables                       111              -              - 
  Intangible asset goodwill                           -            295              - 
                                              _________      _________      _________ 
                                                  8,435          2,653          3,210 
 
  Current assets 
  Inventories                                         3             20              7 
  Trade and other receivables                     1,204            471          1,081 
  Cash and cash equivalents                       1,988          1,259          3,706 
  Prepayments                                        81             25              - 
                                              _________      _________      _________ 
                                                  3,276          1,775          4,794 
                                              _________      _________      _________ 
 
  Total Assets                                   11,711          4,428          8,004 
                                              _________      _________      _________ 
 
  Equity and liabilities 
  Share capital                                   2,087          1,908          2,009 
  Share premium reserve                          47,118         44,564         45,935 
  Merger reserve                                 20,240         20,240         20,240 
  Foreign exchange reserve                        (302)          (338)          (209) 
  Share options reserve                            (29)            229            137 
  Other reserves                               (23,023)       (23,023)       (23,023) 
  Accumulated loss                             (35,515)       (39,818)       (38,180) 
                                              _________      _________      _________ 
 
  Total Equity                                   10,576          3,762          6,909 
                                              _________      _________      _________ 
  Liabilities 
  Current liabilities 
  Loans and borrowings                                -             60              - 
  Trade and other payables                          356            286            447 
  Rehabilitation premium                            111              -              - 
  Deferred revenue                                  594            320              - 
  Deferred Consideration                             74              -              - 
  Income Tax Payable                                  -              -            648 
                                              _________      _________      _________ 
 
                                                  1,135            666          1,095 
                                              _________      _________      _________ 
 
  Total Liabilities                               1,135            666          1,095 
                                              _________      _________      _________ 
 
  Total Equity and Liabilities                   11,711          4,377          8,004 
                                              _________      _________      _________ 
 

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF CASH FLOW

FOR THE PERIODED 30 JUNE 18

 
 
                                                6 months       6 months        Year to 
                                                    to             to 
                                                 30 June        30 June      31 December 
                                                  2018           2017           2017 
                                               (Unaudited)    (Unaudited)     (Audited) 
                                                  $'000          $'000          $'000 
 
  Cash flows from operating activities 
 
  Profit/(loss) after tax                            2,406            158          1,586 
  Adjustments for: 
 
  Bargain Purchase                                 (2,464)              -              - 
  Depreciation of property, plant and 
   equipment                                            36             48             74 
  Share of net / (profit) losses from 
   associates                                          (1)             49             63 
  Non Cash Director Remuneration                       213              -              - 
  Share Based payment expense                           92             91            209 
  (Increase) / decrease in inventory                     4            (7)              6 
  (Increase) / decrease in trade and 
   other receivables                                 (193)            445          (138) 
  Increase / (decrease) in trade and 
   other payables                                     (91)            398            440 
  Increase / (decrease) in prepayments                (69)           (19)            (6) 
  Increase/ (decrease) in deferred revenue             594             91            209 
  Increase /decrease in income tax payable           (648)              -            648 
  Revaluation of investment in associates                -           (58)              - 
                                                 _________      _________      _________ 
 
  Net cash flows from operating activities           (121)          1,196          2,882 
                                                 _________      _________      _________ 
 
  Investing activities 
  Increase in deferred exploration and 
   evaluation                                      (1,443)              -          (186) 
  Acquisition of property, plant and 
   equipment                                             -           (37)          (190) 
  Investment in associates and joint 
   operations                                        (107)        (1,068)        (1,328) 
  Loans to third parties                              (26)              -           (40) 
                                                 _________      _________      _________ 
 
  Net cash used in investing activities            (1,576)        (1,105)        (1,744) 
                                                 _________      _________      _________ 
 
  Financing activities 
  Net proceeds from issue of equity share 
   capital                                               -             60          1,399 
  Net proceeds/(repayment) of borrowings                 -              -              - 
                                                 _________      _________      _________ 
 
  Net cash from financing activities                     -             60          1,399 
                                                 _________      _________      _________ 
 
 
  Net increase / (decrease) in cash and 
   cash equivalents                                (1,697)            151          2,537 
 
  Cash and cash equivalents at beginning 
   of period                                         3,706          1,105          1,105 
  Exchange gains / (losses) on cash and 
   cash equivalents                                   (21)              3             64 
                                                 _________      _________      _________ 
 
  Cash and cash equivalents at end of 
   period                                            1,988          1,259          3,706 
                                                 _________      _________      _________ 
 
 

STRATEGIC MINERALS PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE PERIODED 30 JUNE 2018

 
                                   Share                   Share                    Foreign 
                       Share       premium     Merger      options      Other       exchange    Retained       Total 
                       capital     reserve     reserve     reserve     reserves     reserve      earnings      equity 
                         $'000       $'000       $'000       $'000        $'000        $'000        $'000        $'000 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Balance at 
   1 January 2017 
   - audited             1,873      43,865      20,240         138     (23,023)        (415)     (39,976)        2,702 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Gain/(Loss) for 
   the period                -           -           -           -            -            -        1,586        1,586 
  Foreign exchange 
   translation               -           -           -           -            -          206            -          206 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Total 
   comprehensive 
   income for the 
   year                      -           -           -           -            -          206        1,586        1,792 
 
  Shares issued in 
   the year                136       2,113           -           -            -            -            -        2,249 
  Expenses of 
   share 
   issue                              (43)           -           -            -            -            -         (43) 
  Transfer                   -           -           -       (210)            -            -          210            - 
  Share based 
   payments                  -           -           -         209            -            -            -          209 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Balance at 
   31 December 
   2017- 
   audited               2,009      45,935      20,240         137     (23,023)        (209)     (38,180)        6,909 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Profit for the 
   period                    -           -           -           -            -            -        2,407        2,407 
  Foreign exchange 
   translation               -           -           -           -            -         (93)            -         (93) 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
 
  Total 
   comprehensive 
   income for the 
   half year                 -           -           -           -            -         (93)        2,407        2,314 
 
  Shares issued in 
   the year                 78       1,183           -           -            -            -            -        1,261 
  Expenses of 
  share 
  issue                      -           -           -           -            -            -            -            - 
  Transfer                   -           -           -       (258)            -            -          258            - 
  Share based 
   payments                  -           -           -          92            -            -            -           92 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
  Balance at 
   30 June 2018 - 
   Unaudited             2,087      47,118      20,240        (29)     (23,023)        (302)     (35,515)       10,576 
                      ________    ________    ________    ________    ________     ________     ________     ________ 
 

All comprehensive income is attributable to the owners of the parent.

The accompanying accounting policies and notes form an integral part of these financial statements

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

   1.   General information 

Strategic Minerals Plc ("the Company") is a public company incorporated in England and Wales. The consolidated interim financial statements of the Company for the six months ended 30 June 2018 comprise the Company and its subsidiaries (together referred to as the "Group").

   2.   Accounting policies 

Basis of preparation

These consolidated financial statements have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. IAS 34 is not required to be adopted by the Company and has not been applied in the preparation of this interim information. The consolidated financial statements do not include all disclosures that would otherwise be required in a complete set of financial statements and should be read in conjunction with the 2017 Annual Report. The financial information for the half years ended 30 June 2018 and 30 June 2017 does not constitute statutory accounts within the meaning of Section 434(3) of the Companies Act 2006 and is unaudited.

The annual financial statements of Strategic Minerals Plc are prepared in accordance with IFRSs as adopted by the European Union. The comparative financial information for the year ended 31 December 2017 included within this report does not constitute the full statutory accounts for that period. The statutory Annual Report and Financial Statements for 2017 have been filed with the Registrar of Companies. The Independent Auditors' Report on that Annual Report and Financial Statement for 2017 was unqualified, and included an emphasis on matter paragraph regarding the Group's ability to continue as a going concern and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

After making enquiries, the directors have a reasonable expectation that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the half-yearly consolidated financial statements.

The same accounting policies, presentation and methods of computation are followed in these condensed consolidated financial statements as were applied in the Group's latest annual audited financial statements except for policies stated below.

Joint arrangements

Under IFRS 11 Joint Arrangements, investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. Strategic Minerals Limited has one joint operation at 30 June 2018.

Joint operations

A joint operation is a joint arrangement whereby the parties have joint control of the arrangement have rights to the assets and obligations for the liabilities, relating to the arrangement. Strategic Minerals Plc recognises its direct right to the assets, liabilities, revenues and expenses of the joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses.

Joint Ventures

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have the rights to the net assets of the joint arrangement. Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated statement of financial position.

Business Combinations

Business Combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is obtained, whereby the fair value of identifiable assets acquired and liabilities (including contingent liabilities assumed) is recognised.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

Accounting policies (continued)

Where an acquirer has been unable to complete the initial accounting for a business combination by the end of the reporting period in which the combination occurred - provisional accounting shall be used during a 12 month measurement period.

During this measurement period, the acquirer retrospectively adjusts the provisional amounts recognised at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognised as of that date. The measurement period ends as soon as the acquirer receives the information it was seeking about facts and circumstances that existed as of the acquisition date or learns that more information is not obtainable.

The measurement period does not exceed one year from the acquisition date. After the measurement period ends, an acquirer can make adjustments to correct errors in accordance with IAS 8 Accounting Policies, Changes in Accounting Policies, Changes in Accounting Estimates and Errors.

All transaction costs incurred in relation to business combinations, other than those associated with the issue of a financial instrument are recognised as expenses in profit and loss when incurred

The acquisition of a business may result in the recognition of goodwill or gain from a bargain purchase.

New, revised or amending accounting standards and interpretations

IASB has issued a number of IFRS and IFRIC amendments or interpretations since the last annual report was published. It is not expected that any of these will have a material impact on the Group.

IFRS 9 Financial Instruments

IFRS 9 Financial Instruments replaces IAS 39 Financial Instruments: Recognition and Measurement in its entirety. This standard is effective for periods beginning on or after 1 January 2018 with retrospective application.

IFRS 9 introduces significant changes to the classification and measurement requirements for financial instruments. As at 31 June 2018 the Group has not experienced credit losses in relation to the Cobre operations. Management will continue to assess the overall credit risk of the debtor portfolio when calculating the ongoing bad debt provision.

All intercompany receivables on the Company statement of financial position are repayable on demand. In line with the requirements of IFRS 9 the directors and management have assessed the underlying liquid assets of each counterparty at the year end and has assessed the credit risk to be low at this stage. The directors and management will continue to monitor the credit risk attached to the sales contracts (Group and Company) and the credit risk of intercompany receivables and adopt an appropriate provision policy under the requirements of IFRS 9.

   3.   Critical accounting estimates and judgements 

The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Judgements

(a) Joint arrangement and joint operation

The Company holds a 50% interest in Cornwall Resources Limited ("CRL") which owns the Redmoor Tin-Tungsten project in the United Kingdom with the other shareholder being New Age Exploration Limited ("NAE"). Under the shareholders agreement with NAE, CRL is operated as a 50:50 joint venture with each party being entitled to appoint one Director. Based on this, the Group considers that they have joint control over the arrangement. Under IFRS 11, this joint arrangement is classified as a joint venture and has been included in the consolidated financial statements using the equity method.

Estimates and assumptions

(a) Asset acquisition versus business combination

In April 2018, the company acquired a 100% interest in Leigh Creek Copper Mine Pty Ltd ("LCCM") which owns exploration tenements in the South Australia. The LCCM acquisition meets the definition of a Business Combination in accordance with IFRS 3 and has been treated as such.

(b) Carrying value of intangible assets

In assessing the continuing carrying value of the exploration and evaluation costs carried the Company has made an estimation of the value of the underlying tenements and exploration licenses held.

(c) Share based payments, warrants and options

The fair value of warrants and options recognised in the income statement is measured by use of either a Black Scholes Valuation Model or probabilistic model. The model calculates the fair value of an option that vests if the Company's stock price exceeds the vesting hurdle. The model takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted; based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management's best estimate of future share price behaviour based on recent past experience.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  4.    Segment information 
 

The Group has four main segments:

-- Head Office - This segment holds all the United Kingdom (UK) administrative costs for central operations, finances the Group's operations.

-- SMG - This segment is involved in the sale of magnetite to the US domestic market through the Company's wholly owned subsidiary Southern Minerals Group LLC (SMG).

-- UK - This segment holds the Company's investment in the UK being the Redmoor Tin/Tungsten project in Cornwall which is held by Cornwall Resources Limited and which is 50% owned by the Company.

   --     Australia - This segment holds the tenements in Australia through the Company's wholly owned subsidiaries, Central Australia Rare Earths Pty Ltd and Leigh Creek Copper Mine Pty Ltd. 

Factors that management used to identify the Group's reportable segments

The Group's reportable segments are strategic business units that carry out different functions and operations and operate in different jurisdictions.

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker has been identified as the management team including the Chairman and Directors.

Measurement of operating segment profit or loss, assets and liabilities

The Group evaluates segmental performance on the basis of profit or loss from operations calculated in accordance with EU Adopted IFRS but excluding non-cash losses, such as the amortisation of intangible assets, and the effects of share-based payments.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities. Loans and borrowings are allocated to the segments in which the borrowings are held. Details are provided in the reconciliation from segment assets and liabilities to the Group's statement of financial position.

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  4.    Segment information (continued) 
 
 
   6 Months to 30 June          Head Office         SMG    Australia          UK           Inter       Total 
    2018 (Unaudited)                                                                     Segment 
                                                                                     Elimination 
 
                                   $'000        $'000        $'000       $'000         $'000         $'000 
 
   Revenue                           2          2,118          -           -             -           2,120 
   Cost of sales                     -          (391)          -           -             -           (391) 
                                  _______       ______      _______     _______       _______       _______ 
   Gross Profit                      2          1,727          -           -             -           1,729 
 
   Bargain Purchase                                          2,464         -             -           2,464 
   Depreciation                      -           (36)          -           -             -            (36) 
   Overhead expenses               (838)        (445)        (103)         -             -          (1,386) 
   Management fee                   200         (200)          -           - 
   Share based expense             (92)           -            -           -             -            (92) 
   Write back of provisions        (379)                                   -            379            - 
   Equity accounting 
    profit                           1            -                        -                           1 
   Foreign Exchange                  8            -            -           -            (1)            7 
                                  _______      _______      _______     _______       _______       _______ 
                                  (1,098)       1,046        2,361         -            378          2,687 
   Segment profit/(loss) 
    from operations               (1,098)       1,046        2,361         -            378          2,687 
                                 ________      ________    ________     ________      ________      ________ 
   Segment profit/(loss) 
    before taxation               (1,098)       1,046        2,361         -             -           2,687 
                                 ________      ________    ________     ________      ________      ________ 
 
 
 
       6 Months to 30 June         Head Office         SMG    Australia          UK           Inter       Total 
         2017 (Unaudited)                                                                   Segment 
                                                                                        Elimination 
 
                                         $'000       $'000        $'000       $'000           $'000       $'000 
 
   Revenue                                 200       1,435            -           -           (195)       1,440 
   Cost of sales                             -       (272)            -           -               -       (272) 
                                      ________    ________     ________    ________        ________    ________ 
   Gross Profit                            200       1,163            -           -           (195)       1,168 
 
   Depreciation                              -        (48)            -           -               -        (48) 
   Overhead expenses                     (433)       (425)          (2)           -               -       (860) 
   Management fee                            -       (200)            -           -             200           - 
   Share based expense                    (91)           -            -           -               -        (91) 
   Equity accounting loss                    -           -            -        (49)               -        (49) 
   Foreign Exchange                       (15)           -            -           -             (5)        (20) 
   Gain on revaluation 
    of investment in associate                                       58                                      58 
                                      ________    ________     ________    ________        ________    ________ 
                                         (539)       (673)           56        (49)             195     (1,010) 
   Segment profit/(loss) 
    from operations                      (339)         490           56        (49)               -         158 
                                      ________    ________     ________    ________        ________    ________ 
   Segment profit/(loss) 
    before taxation                      (339)         490           56        (49)               -         158 
                                      ________    ________     ________    ________        ________    ________ 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  4.    Segment information (continued) 
 
 
 
   Year to 31 December            Head        SMG       Australia    Inter Segment     Total 
    2017(Audited)                Office                               Elimination 
 
                                 $'000       $'000        $'000          $'000         $'000 
 
 
   Revenue                         5         5,637          -              -           5,642 
   Cost of sales                   -         (914)          -              -           (914) 
                                ________    ________    ________       ________       ________ 
 
   Gross profit                    5         4,723          -              -           4,728 
 
 
   Depreciation                    -          (74)          -              -            (74) 
   Overhead expenses            (1,086)     (1,016)       (11)             -          (2,113) 
   Management fee                 391        (400)          -              9             - 
   Impairment of intangible        -           -            -              -             - 
    asset 
   Write back provisions          776          -            -            (776)           - 
   Share-based payments 
    charge                       (209)         -            -              -           (209) 
   Share of net loss 
    from associates               (63)         -            -              -            (63) 
   Foreign exchange                73          -            -            (108)          (35) 
                                ________    ________    ________       ________       ________ 
 
                                  (118)     (1,490)       (11)           (875)        (2,494) 
    Segment profit / (loss) 
        from operations           113        3,233        (11)           (875)         2,234 
 
        Finance expense            -           -            -              -             - 
                                ________    ________    ________       ________       ________ 
    Segment profit / (loss) 
        before taxation           113        3,233        (11)           (875)         2,234 
                                ________    ________    ________       ________       ________ 
 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  4.    Segment information (continued) 
 
 
   As at 30 June 2018 (Unaudited)      Head Office      SMG          UK       Australia     Total 
                                          $'000        $'000       $'000        $'000       $'000 
   Additions to non-current 
    assets (excluding deferred 
    tax)                                   107           -           -          1,469       1,576 
                                        ________      ________    ________    ________     ________ 
 
   Reportable segment assets 
    (excluding deferred 
    tax)                                  3,098         2053         -          6,560       11,711 
 
 
   Reportable segment liabilities          189          680          -           266        1,135 
                                        ________      ________    ________    ________     ________ 
 
   Total Group Liabilities                                                                  1,135 
                                                                                           ________ 
 
 
   As at 30 June 2017 (Unaudited)      Head Office      SMG          UK       Australia     Total 
                                          $'000        $'000       $'000        $'000       $'000 
   Additions to non-current 
    assets (excluding deferred 
    tax)                                    -            37        1,068          -         1,105 
                                        ________      ________    ________    ________     ________ 
 
   Reportable segment assets 
    (excluding deferred 
    tax)                                   302         1,650       1,316        1,160       4,428 
 
 
   Reportable segment liabilities          35           562          -           69          666 
                                        ________      ________    ________    ________     ________ 
 
   Total Group Liabilities                                                                   666 
                                                                                           ________ 
 
 
 
   As at 31 December 2017(Audited)     Head Office      SMG          UK       Australia     Total 
                                          $'000        $'000       $'000        $'000       $'000 
 
   Additions to non-current 
    assets (excluding deferred 
    tax)                                     1,328      190              -       186        1,704 
                                          ________    ________    ________    ________     ________ 
 
   Reportable segment assets 
    (excluding deferred 
    tax)                                     3.339     3,065             -      1,600       8,004 
                                          ________    ________    ________    ________     ________ 
 
   Reportable segment liabilities              199      870                      26         1,095 
                                          ________    ________    ________    ________     ________ 
 
   Total Group liabilities                                                                  1,095 
                                                                                           ________ 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  5.    Operating loss 
 

Administration costs by nature

 
                                                 6 months       6 months 
                                                     to             to          Year to 
                                                  30 June        30 June      31 December 
                                                   2018           2017           2017 
                                                (Unaudited)    (Unaudited)      (Audited) 
                                                      $'000          $'000          $'000 
   Operating gain/loss is stated after 
    charging/(crediting): 
 
   Directors' fees and emoluments                       414            181            497 
   Depreciation                                          36             48             74 
   Equipment rental                                     130            134            300 
   Equipment maintenance                                 34              -             70 
   Equity accounting share of loss/(profit)             (1)             49             63 
   Auditors' remuneration                                 8              -             34 
   Salaries, wages and other staff 
    related costs                                       276            116            557 
   Insurance                                             11             26              - 
   Legal, professional and consultancy 
    fees                                                329            147            341 
   Travelling and related costs                          69             71            121 
   Foreign exchange                                     (7)             20             35 
   Share based payments                                  92             91            209 
   Other expenses                                       126            185            193 
 
 
 
 
  6    Exploration and Evaluation Expenditure 
 

In the six months ending 30 June 2018 the Company purchased Leigh Creek Copper Mine Pty Ltd which resulted in the addition of deferred exploration and evaluation costs at acquisition which were recognised at fair value.

 
                                                                        Exploration/ 
                                                                        evaluation 
                                                                        costs 
 
   Cost                                                                 $'000 
 
   At 1 January 2017                                                    - 
   Additions on acquisition of associates                               1,056 
 
   At 30 June 2017 ( unaudited)                                         1,056 
 
   Additions in the year                                                186 
 
   At 31 December 2017 ( audited)                                       1,242 
 
   Additions to 30 June 2018*                                           4,932 
 
   At 30 June 2018 ( unaudited) 
 
 
   *Additions for the period are for both CARE 
   and LCCM.                                                               6,174 
 
 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  7    Investments in associates and joint ventures 
 
 
                                                Investments 
                                                (Unaudited) 
   Cost                                               $'000 
 
   At 1 January 2018                                  1,611 
 
   Acquisition of joint venture interests              *107 
   Share of equity profit in joint 
    ventures                                              1 
   Foreign exchange difference                           36 
                                                   ________ 
 
   At 30 June 2018                                    1,755 
                                                   ________ 
 
 

* During the period the Company paid $107,000 in cash to acquire an additional 779,265 shares in Cornwall Resources Limited ("CRL) (CRL was previously New Age Exploration Limited) which holds the Redmoor tin/tungsten project in Cornwall. Company's interest in CRL remains at 50%.

 
                                                           30 June      31 December 
                                                             2018           2017 
                                                         (Unaudited)    ( Audited) 
 
   Investment in joint venture - Cornwall Resources 
    Limited                                                 1,755          1,611 
 
   Total Investments                                        1,755          1,611 
                                                          ________       ________ 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
 
  8    Business Combination 
 
 

In April 2018, the company acquired a 100% interest in Leigh Creek Copper Mine Pty Ltd ("LCCM") which owns exploration tenements in the South Australia. The purchase adds copper exposure to company's portfolio of strategic projects. The company believes that demand and supply factors for copper over the next five years will lead to price increases going forward, which in turn will add substantial shareholder value.

The fair values of the identifiable assets acquired and liabilities assumed are provisional.

For the three months ended 30 June 2018, LCCM incurred costs of $81,857. If the acquisition had occurred on 1 January 2018, management estimates that LCCM costs incurred would have been $517,000 and consolidated profit (loss) for the year would not have changed as costs associated with LCCM are capitalised to Deferred Exploration and Evaluation Expenditure.

In determining these amounts management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if acquisition had occurred on 1 January 2018.

   a)   Consideration transferred 
 
  Cash                                        1,175,543 
  Equity Instruments (38,700,900 ordinary 
   shares)(i)                                 1,046,385 
  Loan Conversion                                 38,755 
  Deferred Equity instruments (2,866,730          74,030 
   ordinary shares) (ii)                           ________ 
 
    Total Consideration                         2,334,713 
                                                ________ 
 

i. The fair value of the ordinary shares issued was based on the share price of GBP 0.01907.

Of the 38,700,900 shares being issued, voluntary escrow arrangements ensure that one third is escrowed for three months after issue and another one third is escrowed for six months after issue. At 30 June 2018, 12,900,300 shares were not subject to any lock-in arrangements.

ii. The group has agreed to issue additional ordinary shares on 5 March 2019, subject to no warranty claims. Share price for the additional consideration is GBP 0.01907.

   b)   Acquisition - related costs 

The group incurred acquisition related costs of $84,791 on legal fees and due diligence. The costs have been included in 'administrative expenses'.

   c)   Identifiable assets acquired and liabilities at provisional fair value. 
 
 
  Non-current trade and other receivables        117,270 
  Mining Information/ tenement                 4,702,527 
  Property Plant and Equipment                     78,180 
  Other Receivables                                 2,638 
  Environmental Liability                      (117,270) 
                                                ________ 
 
    Total identifiable net assets acquired       4,783,345 
 ________ 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

Business Combination (cont'd)

   d)   Gain from bargain purchase. 

Gain from bargain purchase arising from the acquisition has been measured as follows:

 
 
  Consideration transferred                  (2,334,713) 
  Fair value of identifiable net assets       4,783,345 
  Foreign Exchange                              15,508 
                                                 ________ 
 
    Gain from a bargain purchase               2,464,140 
 

________

Gain from bargain purchase has been included in "Other Income" in the profit and loss.

 
  9    Dividends 
 

No dividend is proposed for the period.

 
  10    Earnings per share 
 

Earnings per ordinary share have been calculated using the weighted average number of shares in issue during the relevant financial year as provided below.

 
                                                    6 months         6 months         Year to 
                                                          to               to 
                                                     30 June          30 June     31 December 
                                                        2018             2017            2017 
                                                 (Unaudited)      (Unaudited)       (Audited) 
 
   Weighted average number of shares-Basic     1,275,230,925    1,227,015,247    1,250,589030 
 
   Earnings/(Loss) for the period                 $2,406,000         $158,000      $1,586,000 
 
   Earnings/(Loss) per share in the               0.19 cents       0.01 cents      0.13 cents 
    period-Basic 
 
   Earnings/(Loss) per share in the               0.17 cents       0.01 cents      0.12 cents 
    period-diluted 
 
 

STRATEGIC MINERALS PLC

NOTES FORMING PART OF THE CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE PERIODED 30 JUNE 2018

 
  11.     Share capital and premium 
                                                 2018          2018             2017          2017 
                                                   No         $'000               No         $'000 
          Allotted, called up and 
           fully paid 
   Ordinary shares                      1,376,193,127        49,205    1,245,825,560        46,472 
                                           __________    __________       __________    __________ 
 

In January 2018, the Company issued 15,000,000 ordinary shares due to options being exercised at an exercise price of 1 pence.

In April 2018, the Company issued 38,790,000 ordinary shares at a price of GBP 0.19 to shareholders in Leigh Creek Copper Mine Pty Ltd, pursuant to its agreement to acquire the balance of Leigh Creek Copper Mine Pty Ltd

Share options and warrants

The number of options and warrants as at 30 June 2018 and a reconciliation of the movements during the half year are as follows:

 
  Date of              Granted as         Issued      Lapsed or        Granted     Exercise     Date of     Date of 
   Grant           at 31 December                    cancelled/       as at 30        price     vesting      expiry 
                             2017                     exercised      June 2018 
      10.04.15          2,000,000              -      2,000,000              -         1.0p    19.04.17    30.06.18 
      10.04.15         12,000,000              -              -     12,000,000         1.0p    19.05.17    30.06.19 
      06.01.17         13,000,000              -     13,000,000              -         1.0p    19.04.17    30.06.18 
      06.01.17         13,000,000              -              -     13,000,000         1.0p    19.05.17    30.06.19 
     15.02.18*                  -     72,000,000              -     72,000,000        2.75p    30.06.19    30.06.20 
   15.02.18***                  -     38,500,000              -     38,500,000        3.75p    30.06.20    30.06.21 
   15.02.18***                  -     17,500,000              -     17,500,000        5.00p    30.06.21    30.06.22 
 
                       40,000,000    128,000,000      15,000,00    153,000,000 
                -----------------  -------------  -------------  ------------- 
 

* Tranche 1 options were issued to directors and management during the half year. They expire on the 30.06.20 and had a market based vesting condition which is satisfied once a 5.5 pence volume weighted average price ("VWAP") per ordinary share is achieved over five consecutive trading days on AIM.

** The Tranche 2 options were issued to directors and management during the half year. They expire on 30.06.21 and had a market based vesting condition which is satisfied once a 7.5 pence VWAP per ordinary share is achieved over five consecutive trading days on AIM.

*** The Tranche 3 options were issued to directors and management during the half year. They expire on 30.06.22 and had a market based vesting condition which is satisfied once a 10.0 pence VWAP per ordinary share is achieved over five consecutive trading days on AIM.

The estimated fair value of options issued during the half year are calculated by applying a Black Scholes or probabilistic option pricing model after taking into account market based vesting conditions. The assumptions used in the calculation were as follows:

 
                                     Tranche 1       Tranche     Tranche 3 
                                                           2 
 
   Share price at date of grant           2.0p          2.0p          2.0p 
   Exercise price                        2.75p         3.75p          5.0p 
   Market vesting condition              5.50p         7.50p        10.00p 
   Expected volatility                     60%           60%           60% 
   Expected dividend                       Nil           Nil           Nil 
   Contractual life                 2.37 years    3.37 years    4.37 years 
   Risk free rate                        0.79%         0.79%         0.79% 
   Estimated fair value of each 
    option                               0.39p         0.40p         0.41p 
 
 
  11    Post balance date events 
 

On 8 August 2018, Mr Peter Wale was appointed as Executive Director. Mr Wale had previously held the position of Non- Executive Director.

On 9 August 2018, Mr John Peters the Managing Director exercised options over 3,000,000 shares which were due to expire on 30 June 2019. Mr Peters provided GBP30,000 which represented an exercise price of

GBP0-01 per share.

On 9 August 2018, Mr Peter Wale, exercised options over 2,000,000 shares which were due to expire on 30 June 2019. Mr Wale provided GBP20,000 which represented an exercise price of GBP0-01 per share.

On 9 August 2018, Mr Alan Broome, exercised options over 1,500,000 shares which were due to expire on 30 June 2019. Mr Broome provided GBP15,000 which represented an exercise price of GBP0-01 per share.

On 9 August 2018, the board approved to grant options to two directors, Jeffery Harrison and Peter Wale, and to key personnel across the Company's four major areas of operation. These have been allocated in three option tranches:

-- Tranche 1 - 35,200,000 options, Vesting Price GBP0.0550, Exercise Price GBP0.0275, Maturity 30/06/20

-- Tranche 2 - 10,750,000 options, Vesting Price GBP0.0750, Exercise Price GBP0.0375, Maturity 30/06/21

-- Tranche 3 - 4,750,000 options, Vesting Price GBP0.1000, Exercise Price GBP0.0500, Maturity 30/06/22

On 3(rd) September 2018, the Company announced the sale of tenement E38/2829, E38/2442, E38/2587 and E38/2856 to Great Southern Mining Limited ("GSM").The tenements are owned by the groups' 100% owned subsidiary Central Australian Rare Earths Pty Ltd ("CARE").

Total consideration for the sale is AUD 145,000 to be paid by way of AUD 100,000 in cash and issuance to

CARE of 1,000,000 shares in GSM at an issue price of AUD 0.045. A non-refundable deposit of AUD 50,000 was deposited on exchange of contracts and the cash balance and the shares will be provided on transfer of title. 500,000 GSM shares will be subject to a voluntary escrow until 30 December 2018, with the balance voluntarily escrowed until 30 June 2019.

Copies of this interim report will be made available on the Company's website, www.strategicminerals.net.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

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