Strategic Minerals Europe Corp. (NEO: SNTA) (FRA: 26K0) (OTCQB: SNTAF) a company focused on the production, development, and exploration of tin, tantalum and niobium, announces the results for the three and nine months ended September 30, 2022. Strategic Minerals’ third quarter 2022 financial statements and MD&A have been filed on SEDAR (www.sedar.com). Unless otherwise indicated, all currency amounts are in U.S. dollars.
Q3 2022 Highlights
Operational and Financial Summary for the Quarter ended September 30, 2022
|Q3 2022||Q3 2021||% Change|
|Total Concentrate Production||Tonnes||206||175||17.7 %|
|Tin Concentrate Sold||Tonnes||161||121||33.1 %|
|Tantalite Concentrate Sold||Tonnes||30||34||(11.8 %)|
|Profit before expenses & other||$’000||3,036||3,902||(22.2 %)|
|Adjusted EBITDA1||$’000||746||2,382||(68.7 %)|
|Net Income (Loss) Per Share||$||0.001||0.009||(88.9 %)|
|1This is not a standardized financial measure and may not be comparable to similar financial measures of other issuers. See “Use of Non-IFRS Financial Measures” below for the composition and calculation of this financial measure.|
“Despite adverse weather conditions and macroeconomic headwinds, our steadily increasing production highlights the continued successful application of our strategy to advance our operations at the Penouta mine,” said Jaime Perez Branger, CEO of Strategic Minerals. “Based on the solid production and levels of efficiency we are seeing, we remain confident that these positive trends will continue. We expect to maintain stable production levels for the rest of 2022 and position Strategic Minerals as the key ethical supplier of the metals that support the new green economy.”
Operational and Financial Performance
In the first quarter of 2022, the Company’s focus was on preparing for production in the open pit. This included installing the new crushing plant and associated equipment. The testing for the new crushing plant began in January, and blasting permits were awarded in March. As such, production levels did not commence to normalize until the second quarter of 2022.
During the third quarter of 2022, the Company continued to strengthen its open pit mining efforts, increasing its year-over-year primary concentrate production by 18% to 206 tonnes. September’s production of primary concentrate reached a record 80.2 tonnes, the largest volume for a single month and 2.9 times the average monthly production of 2021. Year to date, the total production of primary concentrate reached 436 tonnes, increasing 47% from the same period last year, primarily due to an increase in the production of cassiterite concentrate.
Quality of concentrate improved during the third quarter compared to the same quarter last year. Production consisted of 174 tonnes of cassiterite concentrate with 70.5% tin content, and 32 tonnes of tantalite/columbite concentrate with 24.3% tantalite content and 25.2% columbite content.
During the first nine months of the year, revenues totalled $9.5 million, 54% higher than the revenues of the first nine months of 2021, which is consistent with the increase in production in 2022. Revenues for Q3 2022 were $3.7 million, decreasing 11% from Q3 2021, primarily driven by a reduction of international prices of metals, offsetting the higher volume sold and the higher content of tin, tantalite and columbite in produced concentrates.
Adjusted EBITDA was $0.7 million or 20.2% as a percentage of sales for the third quarter, a decrease of $1.6 million from the same period of 2021 ($2.4 million or 57.3% as a percentage of sales). By keeping operating expenses under control while increasing production and quality of the concentrates, adjusted EBITDA was $0.7 million during the first nine months of 2022, offsetting the accumulated loss for the first half of the year when open pit activities were initially starting.
At the end of the period, cash and cash equivalents were $0.5 million compared to $2.2 million on December 31, 2021, reflecting the increase in cash used in operations, debt repayment and the commissioning of new equipment.
At the end of Q3 2022, the Company had a deficiency in working capital of $1.0 million compared to a working capital surplus of $0.6 million at the end of 2021. This was primarily attributable to the transition to open pit mining, commissioning of the new primary crushing plant and fulfilling financial commitments.
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 most prevalent strategic project underway is the full exploitation of Section C at the Penouta Project.
After being granted the definitive concession allowing the Company to exploit mineral resources such as cassiterite (tin), tantalum, niobium, quartz, feldspars, and micas, the Company has continued to advance its open pit mining operations in the Penouta Mine.
Concentrate quality improved during the third quarter of 2022 as production consisted of 174 tonnes of cassiterite concentrate with 70.5% tin content and 32 tonnes of tantalite/columbite concentrate with 24.3% tantalite content and 25.2% columbite content. The Company’s target is to maintain this trend for the remainder of the year.
The Company’s average sale price was reduced due to lower international price of metals, offsetting the higher content of tin, tantalite and columbite in its concentrates. As of the date of this press release, international prices of minerals have continued to decline due to fears of a global recession, inflation pressure on the leading economies and the continuation of the military conflict between Russia and Ukraine.
About Strategic Minerals Europe Corp.
Strategic Minerals’ wholly-owned subsidiary, Strategic Minerals Spain, S.L. produces, identifies, explores, and develops mineral resource properties critical to the green economy, predominantly in Spain. SMS holds permits and a license for the Penouta Project, which allows the Company to produce and conduct exploration, and an investigation permit at the Alberta II Project, allowing it to conduct exploration work already underway. SMS is the largest producer of tin and tantalum in the European Union and has been recognized within the EU as an exemplary company of good practices in the circular economy. The Company is well-positioned as a major producer of sustainable and conflict-free tin, tantalum, and niobium. Strategic Minerals is a “reporting issuer” under applicable securities legislation in the provinces of British Columbia, Alberta, and Ontario.
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