Shares of Strategic Minerals plc (LON: SML) are rallying Friday after it provided an update on its progress regarding the funding of the Leigh Creek Copper Mine project and progress on addressing the conditional elements of the project's Program for Environmental Protection and Rehabilitation (PEPR).
The AIM-quoted firm said negotiations on the provision of a minimum $10m loan facility to the Leigh Creek Mine, guaranteed by the company, are being progressed with a top global bank, which has been undertaking due diligence. However, there is no guarantee of a loan.
While discussions have occurred on the term, rates, and fees, the decision on the loan will not be concluded until the end of the lender's due diligence, stated SML.
“Such funding, if concluded, would not only permit the Company to recommence mining operations at LCCM but, also, provide funds for exploration and expected ASX listing costs,” commented John Peters, Managing Director of Strategic Minerals.
The company has also held constructive meetings with the South Australian Department of Energy and Mines (DEM), with issues identified relating to comments in the submitted PEPR.
DEM has confirmed its desire to make PEPR unconditional after the information requested is provided.
Elsewhere, the scope has been identified to reduce the size of the environmental security deposit, subject to the Leigh Creek Copper Mine's argument.
An updated mine plan shows an additional 600 tons of recovered copper ($4.5m revenue) as increased copper prices allow the scope to economically expand the open pit footprint. Information requirements are progressing and expected to be submitted to DEM by the year's end, with operations now expected to start in Q1 2022.
“The Company is encouraged by the support shown by the Department of Energy and Mines for mining and processing the Paltridge North deposit.
“All efforts are being undertaken to get operations restarted as soon as possible at Mountain of Light, Leigh Creek. However, the need to meet additional DEM requirements and the impact of the pandemic have been contributing factors to progressing the recommencement of production,” added Peters.
Strategic Minerals shares are up over 13.3% at 0.51p so far on Friday.
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