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Strategic Minerals to invest A$250,000 into its joint venture

Published: 20:03 14 Nov 2016 AEDT

nickel chemical symbol
The price of nickel has soared in recent months

Strategic Minerals PLC (LON:SML) has told investors that it has agreed a deal to pump A$250,000 into its joint venture company, Central Australia Rare Earths Pty Ltd (CARE).

The cash will be used to fund the drilling of CARE’s Mount Weld gold and rare earth prospect, as well as the continuation of exploration works at its Hanns Camp nickel sulphide project in Western Australia.

A$75,000 of that money will be provided as an interest-free loan which matures on 31 March 2017.

On this date, unless CARE has at least A$150,000 available, Strategic and Rarus – its joint venture partner – will subscribe for A$75,000 worth of shares each and commit to a further subscription of shares of A$50,000 at 30 September 2017.

A minimum equity carry of 10% is to be maintained throughout the joint venture and, in the event that either Rarus or Strategic having less than a 10% equity, any additional funds required to progress the project will be supplied through a loan at a rate of 10% per annum, to be charged monthly.

Watch: Strategic Minerals' John Peters speaks to Proactive's Andrew Scott

“The agreement on an appropriate approach for the continued exploration of the CARE tenements opens up an exciting new phase in the rejuvenation of the company, especially in light of the recent escalation in Nickel prices, which have risen by approximately 40% since early June,” said managing director John Peters.

“This establishes a blueprint for the further development of the CARE tenements on a fair and equitable basis while ensuring that progress does occur.”

Drilling at Mount Weld and overground electromagnetic surveying are expected to be carried out in the first half of next year, Strategic added.

Shares were down 5% to 0.48p in early deals on Monday.

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