(MENAFN- ProactiveInvestors - N.America) Strategic Minerals (LON:SML USOTC: SMCDY) saw good demand for magnetite from its Cobre tailings operations in New Mexico due to falling oil prices and this is continuing into 2016.
This offset a sales dip in mid 2015 the resources group revealed as it issued a wide-ranging update on strategy and recent decisions.
It is currently negotiating with a cement company looking to take a substantial order from Cobre it added.
Earlier this month the firm revealed it had moved away from bulks like iron and coal securing an option to acquire up to 50% of an Australian firm Central Australian Rare Earths (CARE) which has nickel and rare earth exploration potential.
It also said it had stopped activity on its Tatu coal project in New Zealand to concentrate on this new project and its Cobre iron ore project.
Sales from Cobre in the three months to December were US$513000 compared to US$20800 in the same period of 2014.
At the end of the December quarter Strategic has US$ 1.048mln in cash compared to US$1.34mln at the end of September 2015.
The firm reckons cash flow from Cobre's operations and the reduction in corporate overheads should ensure that adequate reserves exist to progress existing operations.
In the near term the firm said its main aims included to further progress sales opportunities at the Cobre mine; review and undertake drilling at the Laverton project (one of CARE's tenement sites); proceed with the railroad claim associated with the Cobre mine and find another expansion project.
The railroad claim is associated with a contract with the railroad firm when Cobre was first undertaken which was to upgrade the rail spur to the mine at a cost exceeding US$3mln to ensure the line was capable of removing 1500000 tons of magnetite within two years.
Strategic's subsidiary is now planning to file a legal claim for re-imbursement of funds expended on the upgrade as it believes that the history of derailments and "go slow" on the line breached warranties given.
John Peters Strategic's managing director said: "Over the first half of 2016 the board will be focusing on securing additional sales from Cobre and agreeing the drill programme at the Laverton project in preparation for drilling. The group will update the market in due course."
Shares fell over 13% to 0.10p.
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