Fiscal Year 2022 Highlights
- Successfully transitioned to open pit mining at the Penouta property (the "
Penouta Project ") and commenced operating the primary crushing plant, improving primary concentrate production and quality of concentrate. - On
May 23, 2022 , the Company obtained the Concession C grant, which permits the Company to fully develop the open pit mine at thePenouta Project for 30 years, renewable for up to 75 years. It also allows Strategic Minerals to exploit cassiterite (tin), tantalum and niobium, as well as industrial minerals in the mine, such as quartz, feldspars and micas. - With only nine months of open pit operations, total production reached a record 541 tonnes, and the concentrate quality also improved during the year. Cassiterite concentrate production was 455 tonnes with 70.4% tin content, and tantalite/columbite concentrate production reached 86 tonnes with 23.3% tantalite content and 24.6% columbite content.
- Sales reached 524 tonnes of concentrates and 351 tonnes of contained minerals, an increase of 52% and 76%, respectively, compared to 2021.
- Revenues totalled
$11.7 million , an increase of 54% compared to 2021. - Net loss narrowed to
$1.4 million compared to a net loss of$3.0 million in 2021. - On
December 28, 2022 , the Company sold a 70% interest in the Alberta II investigation permit and the Carlota permit application (together, the "Lithium Project ") toIberAmerican Lithium Inc. ("ILI") for total consideration of CA$2.0 million. The Company and ILI have also entered into a joint venture agreement (the "JV Agreement") in respect of theLithium Project . - On
January 24, 2023 , after the reporting period, Electric Royalties Ltd. ("Electric Royalties") acquired a 0.75% gross revenue royalty on the production of thePenouta Project for a cash payment of CA$1.0 million and the issuance to the Company of 500,000 common shares in the capital of Electric Royalties. Electric Royalties may acquire an additional 0.75% royalty at thePenouta Project in consideration of a further cash payment of CA$1.25 million untilAugust 24, 2023 . The royalty rates will be reduced to 0.5% respectively once CA$1.67 million in royalty revenues have been paid to Electric Royalties. - The Company entered into a power purchase agreement for its
Penouta Project , which provides for the supply to the Company of seven gigawatts per year of electricity for five years starting onJanuary 1st, 2023 . A significant portion of the power will be from renewable energy sources and is expected to generate substantial cost savings.
Fourth Quarter ("Q4 2022") Highlights
- Production reached 105 tonnes of primary concentrate production or 3.1 times that of the same period in 2021.
- Sales reached 121 tonnes of concentrate and 80 tonnes of contained minerals, increasing 89% and 113%, respectively, compared to the same period in 2021.
- Revenues were
$2.2 million , an increase of 58% from the same period the prior year, primarily due to higher sales volume. - Net loss narrowed to
$0.8 million compared to$3.6 million in Q4 2021.
Operational and Financial Summary for the Quarter and year ended
Description | Units | Actual | |||||
Q4 2022 | Q4 2021 | Q4 % | FY2022 | FY2021 | FY % | ||
Total Concentrate | Tonnes | 105 | 33 | 318.2 % | 541 | 331 | 63.4 % |
Tin Concentrate Sold | Tonnes | 100 | 42 | 238.1 % | 444 | 253 | 75.5 % |
Tantalite Concentrate | Tonnes | 21 | 22 | (4.5 %) | 80 | 92 | (13.0 %) |
Revenue | $'000 | 2,200 | 1,391 | 58.2 % | 11,659 | 7,550 | 54.4 % |
Profit before expenses | $'000 | 736 | 891 | (17.4 %) | 7,609 | 6,084 | 25.1 % |
Adjusted EBITDA1 | $'000 | (1,234) | (954) | 29.4 % | (578) | 1,184 | NM |
Net Income (Loss) Per | $ | (0.00) | (0.02) | (100.0 %) | (0.01) | (0.02) | (30.0 %) |
1This is not a standardized financial measure and may not be comparable to similar financial measures |
"With the successful transition to open pit mining at our
Operational and Financial Performance
Total production for 2022 reached 541 tonnes, a record high and an increase of 63.4% compared to 2021. Q4 2022 production of primary concentrate reached 105 tonnes, 3.1 times the production of the same period last year.
Quality of concentrate improved during 2022. Production comprised 455 tonnes of cassiterite concentrate with 70.4% tin content compared to 247 tonnes with 66.5% tin content in 2021. Tantalite/columbite concentrate production reached 86 tonnes with 23.3% tantalite content and 24.6 columbite content, up from 84 tonnes with 16.8% tantalite and 17.6% columbite content in 2021.
Revenue improved on a yearly and quarterly basis. Revenues for 2022 totalled
Despite adverse weather conditions such as the severe electric storms during July and August and the drought throughout October and November that interrupted the operation of the mine from time to time, the Company consolidated and improved operations. Net loss was
At the end of the period, cash and cash equivalents were
At the end of Q4 2022, the Company had a deficiency in working capital of
Outlook
Strategic Minerals focuses on increasing production, reducing unitary costs, reinvesting profits to achieve organic and sustainable growth, and looking for new external financing opportunities to expand production, improve recovery levels and initiate downstream projects.
The Company intends to set up a pilot plant to identify and separate industrial minerals such as feldspars, micas, and quartz. The Company is constantly having discussions with large distributors of industrial minerals to seek an agreement that, if successful, would allow these products to be distributed, thereby helping to reduce costs and increase cash flow. Additionally, the Company intends to undertake further exploration work in the permitted areas of the
Following the stoppages of the Company's mining operations due to the malfunctioning of the primary mill at the
Given the strong market demand for lithium and in an effort to maximize the value of the Company's assets, Strategic Minerals entered into the JV Agreement on
About
Strategic Minerals' wholly-owned subsidiary,
Additional information on Strategic Minerals can be found by reviewing its profile on SEDAR at www.sedar.com.
Cautionary Note Regarding Forward-Looking Information:
This news release contains "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of the applicable Canadian securities legislation. All statements, other than statements of historical fact, are forward-looking statements and are based on expectations, estimates and projections as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Strategic Minerals to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause actual results to differ materially from those anticipated in these forward-looking statements are described under the caption "Risks Factors" in the Company's Annual Information Form dated
RECONCILIATION OF NON-IFRS FINANCIAL MEASURES
This announcement refers to the following non-IFRS financial performance measures:
Adjusted EBITDA
Adjusted EBITDA represents earnings before interest, income taxes, depreciation, and amortization ("EBITDA"), adjusted to exclude share-based payments, gain on retained investment in associate, gain on sales of assets and RTO transaction costs. Adjusted EBITDA provides insight into our overall business performance (a combination of cost management and growth) and is intended to provide additional information for the reader as we believe certain investors could use this information to evaluate the Company's underlying performance of its core operations and its ability to generate cash flow and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These measures do not have any standardized meaning prescribed under IFRS and therefore may not be comparable to other issuers.
($ thousands) | Three Months | Three Months | Twelve Months | Twelve Months |
Revenue | 2,200 | 1,391 | 11,659 | 7,550 |
Changes in inventories | 64 | (77) | 726 | (24) |
Raw materials and | (313) | (221) | (1,388) | (660) |
Supplies | (1,215) | (202) | (3,387) | (782) |
Other operating | (1,363) | (1,397) | (5,938) | (3,382) |
Employee expenses | (680) | (400) | (2,502) | (1,681) |
Other income | 73 | (47) | 253 | 163 |
Adjusted EBITDA | (1,234) | (954) | (578) | 1,184 |
SOURCE
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