Strategic Minerals (LSE:SML) has agreed final terms for the sale of its Leigh Creek Copper Mine in South Australia to South Pacific Mineral Investments, which trades as Cuprum Metals.
The transaction includes a combination of cash, shares, royalties and potential earn-out payments. Completion remains subject to approval from Australia’s Foreign Investment Review Board.
Under the agreed terms, Strategic Minerals is due to receive A$750,000 in upfront cash alongside share consideration targeting a value of A$3.0 million.
Sale Includes Royalty and Earn-Out Payments
In addition to the upfront consideration, Strategic Minerals will retain a 2% net smelter royalty relating to Leigh Creek.
The agreement also provides for potential earn-out payments linked to future operating cash flows from the project. The amount ultimately received under these arrangements will therefore depend on future project performance.
The transaction will give Cuprum Metals control of Leigh Creek and responsibility for progressing its plans for recommissioning the project.
Proceeds to Be Directed to Redmoor Project
Strategic Minerals said proceeds received from the Leigh Creek transaction will be directed towards development of its Redmoor tungsten-tin-copper project in Cornwall.
The structure of the sale allows Strategic Minerals to retain potential economic exposure to Leigh Creek through the net smelter royalty and earn-out arrangements after transferring ownership of the asset.
The company described the transaction as non-dilutive for its shareholders.
Strategic Minerals Operations
Strategic Minerals plc is an AIM-quoted mineral exploration and production company with assets in the UK and US, alongside its interest in Leigh Creek in Australia pending completion of the sale.
Its portfolio includes the Redmoor tungsten-tin-copper project in Cornwall, held through Cornwall Resources Limited, and the Cobre magnetite operation in New Mexico.
Redmoor is located in Cornwall’s Tamar Valley Mining District and has a JORC-compliant inferred mineral resource of 17.40 million tonnes containing tungsten, tin, copper and silver mineralisation.
Strategic Minerals acquired the Leigh Creek Copper Mine in 2018. The proposed transfer to Cuprum Metals remains conditional on the required Australian regulatory approval.
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