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Strategic Minerals' profit soars; focus this year will be on developing new revenue stream

The last three years have seen an outstanding turnaround in profitability reflecting the mercurial sales growth in the company's US subsidiary, Southern Minerals Group
Chemical symbol for copper
The company was delighted to locate and secure the highly prospective Leigh Creek copper mine

Alan Broome, the chairman of Strategic Minerals Plc (LON:SML) called 2017 “a stellar year” as the group's profit before tax ballooned to US$2.23mln.

The company, which is actively developing projects prospective for battery materials, said the profit in 2017 was directly related to the substantial turnaround the company's subsidiary, Southern Minerals Group (SMG), achieved in 2017.

Unlike the previous year's profitable performance, which was largely attributable to the US$675,000 settlement of SMG's rail claim, this year's group performance has been driven purely by operations, Strategic Minerals said.

READ: Strategic Minerals' plan comes together as Leigh Creek joins fold

The group saw revenue rise to US$5.64mln from US$1.55mln in 2016 and ended the year with an unrestricted cash position of US$3.71mln, up from US$1.11mln in 2016.

Speaking to Proactive Investors, managing director John Peters said private investors were keen to see the company get a second revenue stream up and going and assured them that this was a top priority for the group as well, following the acquisition of the Leigh Creek copper mine in South Australia.

Peters said he would obviously keep an eye on all of the group's operations this year, “but if you asked me what's on my dance card for 2017, it would be: Leigh Creek, Leigh Creek, Leigh Creek”.

WATCH: Strategic Minerals reports significant increase in profit for 2017​

"Not only does LCCM [Leigh Creek coppermine] provide the company with a near-term copper project, but, once it becomes operational again, will offer SML a valuable second income stream,” Peters said in the results statement.

"The October fundraise, combined with profitability from Cobre throughout 2017 and into 2018, has placed the company in a robust cash position and the company believes that expected project development works during 2018 can be funded from existing reserves,” he added.

Shares in Strategic Minerals were up 4.8% at 1.62p in mid-morning trading.

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