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Strategic Minerals reports £14mln revenue for first six months of production

Published: 16:26 30 Sep 2013 AEST

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Strategic Minerals (LON:SML) expects to complete sales of 500,000 dry metric tonnes of iron in 2013, as it posted what it called a "satisfactory" outcome in its first six months of production.

Revenues for the six months to June 30 this year were lifted to £14mln from £0.3mln in the comparative period, the firm said.

The period saw Strategic operate in "full scale production mode" at its Cobre Mine in New Mexico, USA for the first time.

Executive chairman James Fyfe said: "The company achieved a satisfactory outcome from its first six months of full scale production at the Cobre stockpile in New Mexico delivering 247,000 dry metric tonnes of product to market.

"We are firmly focused on adding additional stockpile assets which will enable the company to achieve cash-profitability at group level and thereafter a profit after tax for our shareholders."

The average free-on-board (FOB) price received was US$88.91 per tonne.

EBITDA (earnings before interest, tax, depreciation and amortisation) from the New Mexican operations were £325,000 compared to a loss of £79,000 last year, while the overall group loss was £3.5mln compared to a loss of £1.5mln in the first half of 2012.

Chief executive Paul Harrison said: "We have generated revenues of £14m in our maiden six months of production, which is a creditable performance.

"Whilst extreme volatility in the underlying iron ore price during the period (high US$160, low US$110) impacted our profitability, the business is now in full operation.

"Our priorities remain highly focused on three key areas namely maximising profitability of our first core asset; securing additional low operating cost tailings deposits and creating value out of our Australian exploration tenements."

The company added: "Subsequent to 30 June 2013 our New Mexican operations completed a 65,000 DMT shipment in August and we anticipate a similar export shipment shortly.

"Accordingly we anticipate completing total sales of approximately 500,000 DMT in fiscal 2013."

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