Strategic Minerals : Redmoor 2018 Drilling Programme

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

25 May 2018

Strategic Minerals plc

("Strategic Minerals", "SML" or the "Company")

Redmoor 2018 Drilling Programme

Strategic Minerals plc (AIM:SML; USOTC: SMCDY), a producing mineral company actively developing projects prospective for battery materials, is pleased to inform the market that it has, in conjunction with its joint venture partner, New Age Exploration Limited ("NAE"), arranged to undertake further drilling at the Redmoor tin/tungsten/copper project ("Redmoor" or the "Project") in Cornwall, UK, expected to commence in June 2018.

The decision was made on the basis of the Company's recently reported mineral resource upgrade for Redmoor and upon receipt of externally produced mining, processing and infrastructure studies.

Highlights

· Upgraded JORC inferred mineral resource estimate of 4.5m tonnes at 1.0% tin equivalent (SnEq)* as announced on 20 March 2018 ("High Grade Mineral Resource") encourages further development of the Project

· Encouraging results from a preliminary economic evaluation based upon recently completed hypothetical mining, processing and infrastructure studies

· Commitment to aphased drilling programme of between 5,000m and 10,000m in total with Phase 1 which has been initially funded for 4,000m

· Drilling programme to focus on confirming and expanding the existing High Grade Mineral Resource through drilling of the 4-6Mt Exploration Target within High Grade Zones in the Sheeted Vein System ("SVS")

· SML commits to providing £332,000 to cover its half of the drilling programme and to underwrite NAE's equity call should it not be in a position to subscribe for this equity by 31 August 2018

· Drilling contract executed with Priority Drilling Limited, who have begun mobilisation and expect drilling to commence in June 2018

· Indications are that deeper holes may result in improved grades

· Drilling and assaying expected to be completed in 2018

*Equivalent metal calculation notes; Sn(Eq)% = Sn%*1 + WO3%*1.43 + Cu%*0.40. Commodity price assumptions: WO3 US$ 33,000/t, Sn US$ 22,000/t, Cu US$ 7,000/t. Recovery assumptions: total WO3 recovery 72%, total Sn recovery 68% & total Cu recovery 85% and payability assumptions of 81%, 90% and 90% respectively

Commenting, John Peters, Managing Director of Strategic Minerals, said:

"While undertaken at a high level, the independently conducted mining, processing and infrastructure studies have provided both the Company and NAE with the confidence that a base mining proposal exists at Redmoor and that, subject to the identification of additional resources, investment grade returns can be achieved.

"Given the mining history of the tenements within Cornwall Resources Limited's holding, the Company and NAE believe that a truly compelling mining proposition can be established. However, the process of determining the quantity of additional resource tonnes is dependent on the results of future drilling. The Company and NAE have therefore decided that an incremental drilling programme is the optimal manner by which to advance the Project.

"The Company is very encouraged by the results of the latter holes drilled in the 2017 drilling programme, most notably the increased grade at depth, and strongly believes that Redmoor will prove an attractive investment. Accordingly, the Company has provided a firm commitment to fund up to£664,000 to the Project this calendar year."

Interpretation of the Preliminary Mining, Processing and Infrastructure Studies

It is important to note that the preliminary mining, processing and infrastructure studies were conducted to assist internal review of the project at a high level. While engineering detail and accuracy are consistent with that undertaken for a typical Scoping Study, the fact that the resource the studies have been based upon is inferred, not indicated, precludes this from being defined as a Scoping Study. Any valuation results contained in this announcement are hypothetical and only illustrative of the potential value of the Project and should not be relied upon for investment purposes.

Introduction

The Redmoor tin, tungsten and copper project is located in South-East Cornwall between Kelly Bray and Callington, approximately 28km from Plymouth and 40km from the recently commissioned Hemerdon Tungsten mine and processing plant. The area has well-established infrastructure and is located in the historically significant Cornish mining district.

As announced on 20 March 2018, Cornwall Resources Limited ("CRL") (50% owned by Strategic Minerals), commenced a scoping-level review of mining, processing and infrastructure aspects of the Redmoor Project. These studies have been based on the High Grade Mineral Resource of 4.5 million tonnes @ 0.37% tungsten (WO₃), 0.25% tin and 0.57% copper for a 1.0% tin equivalent grade.

The completed mining, processing and infrastructure studies focus on a 10-year mine life, producing up to 700,000 tonnes of ROM (run-of-mine) processing plant feed from an underground mine accessed via a decline. A processing facility is included in the design to produce separate tin, tungsten and copper concentrates.

Mining Study

Technical consultants, Mining One, of Australia were engaged to carry out early stage mine design, conceptual life of mine schedule, mining capital and operating cost estimates for the Project based on the High-Grade Mineral Resource.

Mining One selected retreat up-hole stoping with paste fill as a potentially viable mining method. This assessment was based on the size and geometry of the ore body and environmental considerations. A decline from surface (portal), with a central access to the resource from which ore drives can be developed along strike. A return air rise ("RAR") and an escape way system have also been designed and costed. A three-year ramp up to full production was included in the mining schedule with an overall mine life of 10 years scheduled.

Mining One utilised Mineable Shape Optimiser ("MSO") software to complete the stope designs. The design criteria was based on a cut-off grade assessment in combination with a preliminary geotechnical assessment and mining equipment constraints.

The work completed by Mining One should not be considered a Scoping Study as defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC). This is primarily due to a lack of geological confidence in the Redmoor resource.

Processing and Infrastructure Study

CRL engaged UK based engineers, Fairport Engineering Limited ("Fairport"), who have recent engineering design and construction management experience of a similar scale tungsten processing plant in Spain, to complete a study of the Redmoor processing plant and surface infrastructure using existing metallurgical test work and process flowsheet information. The study completed by Fairport included a preliminary design of a 700,000 tpa processing plant and related surface infrastructure and capital and operating cost estimates for the processing plant and surface infrastructure.

Based on the historical metallurgical test work available, Fairport considered a flowsheet including the following steps:

• Crushing and Screening

• Pre-Concentration

• Milling

• Froth Flotation

• Gravity Separation

• Concentrate Thickening, Dewatering and Drying

• High Intensity Magnetic Separation

• Tailings Thickening

Economic Evaluation

An economic evaluation of the project has been completed by CRL based on:

· The mining study results completed by Mining One

· The processing and infrastructure study results completed by Fairport Engineering; and

· Estimates of other project costs made by CRL

In the opinion of the Company, the preliminary economic evaluation indicates that the Project is potentially economically viable and will assist in improved drill planning, so that key economic outcomes are delivered from the proposed drilling programme.

The key modelling parameters are:

The key results of the financial assessment were that, despite the project being expected to deliver excellent operating margins (estimated net margin of US$63/tonne), the existing High Grade Mineral Resource of 4.5Mt is insufficient to meet the Joint Venture partners' investment hurdles. This indicates that, with an in-situ grade of 1.0% Sn Eq., an excellent project could be developed at Redmoor provided additional resource tonnes can be defined and added to the mining inventory.

The following table demonstrates the potential expected returns on investment ("IRR") at varying mining inventories**.

Table: Estimated IRR of the Project based on varying mining inventories**

**The estimated IRR valuations are not based on a Scoping Study. The mining inventory figures in excess of 4.5 Mt are only conceptual in nature and supported only by the Exploration Target. Therefore, these valuations are only illustrative of the potential value of the Project based on the early stage information available to the Company and should not be relied upon for investment purposes.

2018 Drilling Programme

An exploration drill programme at Redmoor is proposed to commence in June 2018 with the Programme focusing on confirming and expanding the existing resource through drilling of the Exploration Target*** identified in the Company's 20 March 2018 RNS.

The Exploration programme is based on 8 drill holes with an average depth of 625 metres.

A drilling contract has been executed with a Republic of Ireland based drilling company, Priority Drilling Limited ("Priority"), to complete aphased drilling programme of between 5,000m and 10,000m in total with Phase 1 which has been initially funded for 4,000m.Priority has extensive experience in tin, base metals and coal exploration drilling, and has been selected after a competitive tender process. The Company has provided a firm commitment to fund up to £664,000 of the Project for the remainder of the 2018 calendar year.

CRL and SRK Consulting UK ("SRK") believe that it is realistic to consider that mineralisation continues at depth within the Exploration Target in a similar style to that already tested within the High Grade Mineral Resource area. The Exploration Target has been determined by assuming that SVS mineralisation containing High Grade Zones in similar frequency and thickness to those within the High-Grade Mineral Resource area, extends down-dip beyond the currently delineated resource, approximately 250 metres beyond the depth of the High-Grade Mineral Resource. This results in a potentially high-grade Exploration Target, of 4 - 6 Mt at a tin equivalent grade of between 0.9 - 1.3%, being defined in accordance with the guidelines for such set out in the JORC Code (2012).

*** This Exploration Target estimate is conceptual in nature; there has been insufficient exploration to define a high-grade Mineral Resource in this volume. It is uncertain if further exploration will result in the determination of a Mineral Resource for the Exploration Target.

From CRL's 2017 drilling programme, drillhole CRD019 provided significant support for the concept of the Exploration Target. While the results from this drillhole have not yet been incorporated into the High-Grade Mineral Resource, this hole intersected over 20 metres (true thickness), including 7.00 metres (4.82 m true thickness) @ 2.63% SnEq from 507.05 metres within which was including 1.00 metre (0.71 m true thickness) @ 12.38% SnEq from 510.05 metres. This high-grade mineralisation is within the Exploration Target area and at grades significantly in excess of those of the reported resource above it.

In order that drilling can commence in June 2018, the Company has provided a firm commitment to CRL to subscribe for a minimum equity contribution of £332,000 and underwrite NAE's portion of the equity subscription (a further £332,000) should they fail to subscribe by 31 August 2018. Accordingly, the Company has a maximum contribution of £664,000. Should NAE not subscribe for any portion of CRL's current equity raising, the Company will become a 60% shareholder of CRL although all decision making will remain 50:50.

Notes to Editors

Strategic Minerals Plc is an AIM-quoted, operating minerals company actively developing projects prospective for battery materials. It has an operation in the United States of America and development projects in the UK and Australia. The Company is focused on utilising its operating cash flows, along with capital raisings, to develop high quality projects aimed at supplying the metals and minerals being sought in the burgeoning electric vehicle/battery market.

In September 2011, Strategic Minerals acquired the Cobre magnetite tailings dam project in New Mexico, USA, a cash-generating asset, which it brought into production in 2012 and which continues to provide a revenue stream for the Company. This operating revenue stream is utilised to cover company overheads and invest in development projects orientated to supplying the burgeoning electric vehicle/battery market.

In January 2016, the portfolio was expanded with the acquisition of shares in Central Australian Rare Earths Pty Ltd, which holds tenements in Western Australia and the Northern Territory that are prospective for cobalt, gold, nickel sulphides and rare earth elements. The Company has since acquired all shares in Central Australian Rare Earths Pty Ltd.

In May 2016, an additional exploration asset was acquired when the Company entered into an agreement with New Age Exploration Limited to acquire up to 50% of the Redmoor Tin/Tungsten project in Cornwall, UK. This 50% acquisition was completed in February 2017 and a drilling programme completed in 2017 resulted in a significant upgrade of the resource.

In March 2018, the Company completed the acquisition of the Leigh Creek Copper Mine situated in the copper rich belt of South Australia and is currently working to bring this into operation in 2019.