Cornish tin mine project to benefit from sale of parent firm’s Australian copper business

The international mineral exploration firm planning to extract tungsten and tin from a disused Cornish mine is to give the project a £400,000 investment boost from the sale of its copper interests in Australia.

Strategic Minerals said all proceeds from the disposal of its Leigh Creek copper mining business would go to the Redmoor scheme in South East Cornwall.

Said to be home to Europe’s highest grade, undeveloped tungsten reserves, the mine, which closed nearly 135 years ago, also contains large amounts of valuable tin and copper.

In July, Strategic Minerals received planning approval from Cornwall Council to substantially expand its drilling activities at Redmoor and continue exploration for up to three years.

The planned 22,500m programme will include at least 44 drill holes and was described by the company as the largest continuous diamond drilling campaign undertaken in Great Britain this century.

Strategic Minerals has already raised around £10m to carry out test drilling at Redmoor and prepare it for production.

Now the A$750,000 (£400,000) cash consideration from the sale of Leigh Creek in South Australia to Cuprum Metals will be ploughed into Redmoor.

Other income from the share consideration, royalty and earn-out elements of the deal will also go towards the project as they are received.

These include up to A$3m in Cuprum shares in a new company, a net smelter royalty of 2% attached to the first 24,900 tonnes of copper production, and earn-out payments from the start of commercial production, representing 20% of half-yearly operating cashflows up to the value of A$4m.

Following recent new highs for copper prices, Strategic Minerals said it had lowered the upfront cash payment in return for the royalty to “provide additional ongoing exposure to future cashflows”.

Mark Burnett, executive director of Strategic Minerals, said: “We are delighted to have reached final terms for the sale, a significant milestone that allows us to continue rationalising Strategic Minerals’ portfolio around our core assets for maximum value creation.

“The structure of the sale is highly commercial for the company, combining upfront cash with ongoing copper exposure through layered consideration comprising shares, royalties and earn-out.

“Proceeds from the transaction, a non-dilutive source of funding for our shareholders, will be used to further support the continued advancement of our flagship Redmoor tungsten-tin-copper project.”

Completion of the sale remains subject to approval from Australia’s Foreign Investment Review Board.

Strategic Minerals also owns a magnetite operation in New Mexico.