Cobre is the backbone of Strategic Mineral PLC’s (LON:SML) multi-project strategy.
The New Mexico-based operation produces iron ore from copper tailings, generating cash to fund exploration and development opportunities elsewhere.
Cobre sold 10,304 tonnes of magnetite ore for US$598,000 in the three months to September 2018.
That brings its total sales for the 12 months to September to 74,364 tonnes for US$4.8mln, up from 57,279 tonnes for US$3.7mln last year.
Cash generation amounted to US$927,000 in cash in the September quarter.
Cobre Mark 2
Strategic hopes that Leigh Creek can become a Cobre Mark Two, in terms of cash generation anyway.
Acquired in March the company holds three approved mining leases for the project covering a number of copper oxide deposits including Lorna Doone, Lynda, Mountain of Light, and Mount Coffin.
Resources are estimated at 3.61mln tonnes at 0.69% copper for 24,900t of copper metal.
First exploration at Leigh Creek for decades
A drilling programme to expand the resource started in October.
John Peters, Strategic Mineral’s managing director, said it is the first exploration to be undertaken at the former copper mine for forty years.
Drilling will comprise 10 holes over 500m to look for potential repeat copper oxide deposits at the Lyndhurst Project comprising two unmined copper oxide deposits, Lynda and Lorna Doone, 500m apart.
Two holes will also test for mineralisation below the Rosmann East pit adjacent to the Mountain of Light plant.
Strategic will use cash generated from Cobre (and Leigh Creek eventually) to fund its earlier stage projects.
The company holds a 50% stake in the Redmoor tin/tungsten project in Cornwall, where a first drilling programme was completed in November 2017.
A recent report by mining giant Rio Tinto cited tin as one of the most critical metals for new technologies and Strategic is positive about Redmoor’s prospects.
A second phase of drilling will start soon ahead of a pre-feasibility study in 2019.
The site is also located 40km from the Hemerdon tin/tungsten mine and processing plant owned and operated by Wolf Minerals, which went into administration October.
In the southern hemisphere, the company is pushing its battery metals agenda hard with exploration at its Hanns Camp project in Western Australia.
Held by Strategic Minerals’ subsidiary Central Australian Rare Earths (CARE), Hanns Camp is located within the Laverton Project, 12km east of well-known nickel sulphide deposits at Windarra.
A geological review at Hanns Camp, conducted in conjunction with nickel specialist Dr Martin Gole identified a number of potential nickel sulphide targets.
Mount Weld project, in Western Australia, is also part of the CARE portfolio.
Located within the highly prospective Eastern Yilgarn Craton Province, CARE holds exploration tenements for cobalt, nickel, rare earth elements and gold.
Strategic Minerals intends 2,600m of shallow drilling to test several mineralisation targets.
John Peters, managing director has said previously he wants the company to be worth £100mln.
That’s a punchy target with the market value at £18.7mln at 1.35p, but the group is clearly being positioned with that goal in mind.