Proactive Investors - Strategic Minerals (LON:SMLP) said sales from its Cobre iron ore tailings operation in New Mexico hit a 6-year monthly high in February.
To help cope with the demand, SML’s subsidiary Southern Minerals Group is now acquiring a Caterpillar (NYSE:CAT) Excavator (Trackhoe 320) as volume increases.
Tonnage in the month reached 4,898 tons, making it the highest monthly sales tonnage since March 2021.
SML added that as a portion of SMG's clients are fertilizer companies, where demand seasonally increased in February and March, the 6-year high tonnage sales augurs well for the remainder of the year.
As a result, current expectations are for sales of around 13,000 tons per quarter after March 2024 while revenue from Cobre for 2024 is expected to be US$3.5 million, AIM-listed SML added.
“The company believes that sales are now on track to be maintained at significantly higher levels than over the past three years,” the statement added.
John Peters, Strategic Minerals managing director, commented: "Encouraging sales in February 2024 and expectations of returning to quarterly sales of circa 13,000 tons are providing a robust cash flow outlook for the end of 2024, after resolving creditor payments arising from 2023.
"Cobre's revamped management lineup has risen to the challenge and recently sought the addition of a Trackhoe 320 to ensure the continuation of higher volume operations in difficult weather conditions. Not only was this sourced locally but the acquisition was wholly financed, with repayments spread in line with future cash flow expectations.
"Discussions continue with another potentially large client at Cobre but, due to recent increases in activity, such discussions are now focussed on future years supply.”