Good morning, ladies and gentlemen. Welcome to the Strategic Minerals Plc investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time via the Q&A tab that's just situated on the right-hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish our responses where it's appropriate to do so on the Investor Meet Company platform. Before we begin, we would just like to submit the following poll, and if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to Executive Chair, Charles Manners. Charles, good morning, sir.
Thank you, Jake, and good morning to everyone. Welcome to our first, and I very much hope not the last, Investor Meet Company session. We aspire to be an open, transparent and approachable board and management team, and we're very happy to have this chance to discuss our company and its progress with you all. Firstly, I'd like to introduce myself and my two colleagues to anyone who does not yet know us. I'm Charles Manners, and I'm the Executive Chair of Strategic Minerals Plc. I'm joined by Mark Burnett, Executive Director, effectively the CEO of the company, and Dennis Rowland, who's Managing Director of Cornwall Resources Limited, our 100% owned subsidiary, that operates the tungsten, tin and copper mine in Cornwall.
It's just over one year ago that Mark and I joined the board of Strategic Minerals Plc, and I think it's fair to say that we've done much work since then, and a great deal has changed for the better for our collective company in the last year. At a corporate level, Philip Haydn-Slater joined Mark and myself on the board at the start of this year, and the last remaining member of the previous board left around six months ago. We now have an entirely new team in charge. I think it's fair to say that much of Mark and my first six months was spent on sorting out a variety of pressing legacy issues, but I'm glad to confirm that these are all now firmly behind us, and we can look forward to the future with much greater enthusiasm and optimism.
On the day that I became chairman of the company and Mark and I joined the board, which was on the 10th of September 2024, the shares opened that day, according to the records of the London Stock Exchange at 0.15 pence, and our market cap was just over GBP 3 million. Last night, our shares closed at just under 1 penny for a market cap of approximately GBP 23.5 million, just under eight times higher, which is one way of measuring the progress the company has made. We have a clear plan and have made significant progress with all three of our projects and injected some much-needed energy.
If you were to visit our offices in Kelly Bray in Cornwall, you would find the level of activity and enthusiasm unrecognizable from my first visit in October 2024, prompted by the commencement of our much-needed drilling program, the first since 2018. In today's presentation, I would like to take the chance to restate our high-level strategy, and then we will immediately turn our attention to what is clearly our highest priority and the project that's getting all the attention at the moment, the tungsten, tin, copper and now silver project in Cornwall, which will be introduced by Mark and then with further and more technical details supplied by Dennis. As you will almost certainly be aware, we've just released the results of our first drill hole out of the nine, which you will have seen in our RNS, we described as exceptional.
I know Dennis is very much looking forward to sharing his enthusiasm with you. After that, we'll talk about our magnetite tailings operation in Silver City, New Mexico, and then finish by talking about our copper oxide project at Leigh Creek in South Australia. At the end of the presentation, we'll be pleased to answer any questions that investors may have insofar as we are allowed to do so. Please do feel free to submit. Turning to our strategy, we are in the very fortunate and possibly unique position of being a junior market exploration company that has its own cash flow, which we'll discuss later when we turn our attention to the Cobre magnetite operation.
Our strategy, therefore, is a simple and straightforward one, which is to utilize the now stabilized and hopefully increasing cash flows from Cobre, as well as any potential disposal proceeds arising from Leigh Creek, to continue to unlock the huge potential of the Redmoor project in Cornwall and to develop the project and the surrounding area into a leading source of tungsten, tin and copper, thereby contributing to the development of a resilient Western supply chain in these critical minerals. I'd now like to hand over to Mark, who will introduce the Redmoor project to you.
Good morning, everybody, and, thank you very much for your time. I'll give a quick corporate snapshot before we dive into the Redmoor project in Cornwall. We are Strategic Minerals Plc. We are listed in London on the AIM exchange, under the ticker SML, and we also have a U.S. OTC listing in line with an asset we have in the portfolio in America. Just over 2.3 billion shares outstanding. The major shareholders are Charles Manners, as you've been introduced to this morning, RAB Capital, Philip Richards. These are both very sophisticated long-term shareholders who have a good understanding of the mineral space and also really want to see this project succeed.
Diving into Redmoor, this is our flagship project, tungsten, tin, copper project in northeast Cornwall. We believe this is Europe's highest grade undeveloped tungsten asset and the second highest globally. If you look at the metrics from our 2020 scoping study versus what the European continent requires in terms of tungsten, we believe we can be a significant producer in that continental space, supplying up to 30% of Europe's supply and demand when we are in production. We're a significant high-grade resource hosted in a sheeted vein system. We have a resource statement as of 2019, mineral resource estimate of just under 12 million tons at 0.56% tungsten, 0.5% copper, 0.1% tin. As I'll go into shortly, we stack up extremely competitively against our peer group, particularly in terms of grade.
That's really the catchphrase of this presentation is to note that we are an extremely high-grade opportunity in the tungsten space. Where are we today? Well, this project has had a lot of work done on it in the past, and has been extremely well managed by Dennis Rowland, who I'll introduce in a moment, who's the managing director of Cornwall Resources and the team over the last couple of years. However, the project has ostensibly been lost in the eyes of the market for a number of years, and we're here to relaunch it. We've recapitalized, we've restructured. I'm delighted to say we started drilling again in the summer of this year. 9 drill holes planned from now until the end of the year.
All three of the first drill holes from pad one have intersected this high-grade sheeted vein system. As Dennis will brief in a second, we've had some exceptional results already in terms of assays and market data released last week. We're now six holes in. The seventh hole is halfway through with two to go. We're on track for a very successful drilling season up until the end of the year. We've also reanalyzed some historic drill hole samples to better understand the historical resource and really confirm this high-grade opportunity in the tungsten space. I'm gonna hand over to Dennis, our Managing Director of Cornwall Resources, to give a bit more color on those exceptional drill results and brief on the project in more detail. Dennis.
Perfect. Thank you, Mark. Hello, everyone. The borehole that was announced last week in our RNS was the first borehole of a 9-borehole program. This borehole intersected the full thickness of the Redmoor sheeted vein system. That is a 90-meter thick package of veins and wall rock, with our high-grade mineralization sitting within the veins and the wall rock being barren of mineralization. As you can see from the highlights, going down hole, we intersected multiple zones of high grade. These are made up of several samples of mineralization, and they represent the highest grade tungsten results reported by a CRIRSCO or JORC compliant project this year, and actually for several years. The results are for tungsten and copper, and our tin assays are still pending from the lab.
These follow further check analysis and some high-grade ore finishes. The purpose of the 9 boreholes that we are drilling this year are several. One of those is with regards to the first borehole is that we are twinning a series of 1980s boreholes at Redmoor. This is over 30 boreholes that intersect the Redmoor sheeted vein system. Subject to validation of the datasets by analytical techniques, we aim to incorporate those holes into our future MRE mineral resource estimate update. These holes have had their data already validated, including their lab analysis and their check samples from the 1980s, and they are shown to be robust, and we look forward to therefore hopefully being able to incorporate them into the resource.
This not only further strengthens the resource, but it significantly reduces the infill drilling requirements to take Redmoor from an inferred resource to an indicated resource. The other purposes of this year's drilling are to test the short-scale continuity of grade and structure. This will also feed into the assumptions between the drill hole spacing needed for indicated and what we already use for inferred. We are showing so far with our drilling that the grades are continuous and that we can accurately predict the structures. The final purpose of this year's drilling is to test a portion of our exploration target. Not only do we have an 11.7 million ton resource, but we have a 4-8 million ton exploration target at similar grades to the resource.
By filling in a portion of this and an area that is integral to the 2020 scoping study, we therefore aim to not only add more resources to Redmoor, but also to feed that straight through into the mining and economic updates. Mark, can you go to the next page? This year's exploration is part funded by the UK government through the Shared Prosperity Fund for a total budget of GBP 1.52 million. This is roughly a 50/50 share. We spend the money, and then on a basis we claim that back from the Cornwall Council.
This application process and the grant funding was heavily supported by the U.K. government with the Department for Business and Trade writing in support of our application, and by basically showing that we are not only integral to the U.K.'s critical mineral strategy, but we feed into the UK industrial strategy. The full program itself to be delivered by the end of March 2026, has several work outputs. That includes the nine boreholes, but also a full series of metallurgical test works and an ore sorting amenability test works. Alongside the re-logging of historical core and some additional analysis, all of these outputs will feed into the mineral resource estimate update in Q1 of 2026. We aim, therefore, to be able to expand the mineral resource, but also to improve our recoverabilities.
These outputs will then feed into a mining model and an economic model update from the outputs from the 2020 scoping study. All of these, again, will then feed into an investment-ready business case, which is basically the delivery plan timeline and costings for PFS. We have started some of that work already, and we aim to update it with the outputs of this year's work to therefore lead to costings for PFS. Thank you, Mark.
Moving on to where we sit versus our peer group. Many of you will have seen this investor friendly bubble chart before, but I just want to highlight a couple of key points here. Redmoor is highlighted with a red circle. As you can see, we're a small but mighty project. We are the highest grade amongst our peers. There is indeed Mactung in Canada to our right, which is a standout asset globally, however, suffers from some significant infrastructure challenges and a large infrastructure bill. We take that away from the equation. We really sit at the top of the pile.
Also, we would like to clearly increase the size of that bubble, in tonnage and move it up the page to the north, with more drilling, starting this year. Also like to draw your attention to the top left-hand corner, where we have the Hemerdon mine in the U.K. That is in Devon, about 50 km away from us. That's a very different style of mineralization. It's high tonnage, low grade, and really demonstrates how valuable the Redmoor asset is, relatively speaking, given the grade component. As a mining investor, grade really is king. In 2020, we published a scoping study. I appreciate that the metal pricing assumptions used in that study are significantly below where the current market prices are between 30% and 50%.
The CapEx figure will also need to be updated because there has been relatively significant inflation in CapEx in the mining industry since 2021. However, it's a very good lens into what we are and what we can become. On those 2020 numbers, we had significant profitability with a post-tax NPV8 of $128 million on a capital spend of $85 million. We hope to retain those two pillars of economic profitability as we move into our updated scoping study next year, then to PFS and to DFS. All to say that we intend to be a highly profitable, high grade, cash flowing opportunity with relatively near-term production and with low capital intensity. The 2020 scoping study had some key benefits and areas for optimization.
We already have a good understanding of where our recoveries are, but we're delighted to say we've started new metallurgical test work to increase our understanding and increase those recoverability benchmarks. We're also looking at ore sorting technologies, which is a modern way of reducing the amount of tonnage that effectively goes through the processing flow sheet, so we can reduce costs but increase grade and increase significantly the quality of the product at the mine gate. Those studies are ongoing at the moment. On the right-hand side, the scoping study demonstrated that there was an additional exploration target of between 4-8 million tons on top of the existing resource of 12 million tons.
We're confident from the current drilling that we're seeing at the moment and the results we've released, that we'll be able to achieve that and thereby increase the resource meaningfully over the next couple of years, while also retaining the high-grade nature. That's really coming through in the drill results we've announced to the market last week already. I'm going to ask Dennis to brief on the overall security of our land tenure. This slide is to really say to the market that while mining projects in the U.K. are considered small scale and in local areas, we actually think this is a district-scale opportunity. We've spent a lot of time, worked very hard on increasing the land package, just under 100 sq km in the local area, with some of the biggest and best landowners and stakeholders.
Over time, we fully intend to demonstrate further occurrences of high-grade tungsten, tin, and copper, as well as some precious metals exposure. That sort of gives a flavor of the broader opportunity. I'm gonna hand over to Dennis to give a bit more detail.
Thank you, Mark. Mineral rights in the U.K. are a privately held asset. They are not licensed by the U.K. government. The mineral rights that Redmoor sits in are a 23-kilometer square package, owned by a local business owner. This license has been in place since 2012, with exploration undertaken since 2017. The license was recently extended until 2037, giving a significant security with regards to our tenure, whilst we undertake exploration activities. The license comes with an option where we can convert it to a mining lease, and this is for a 50-year term that can also be extended further beyond that, subject to need. We also recently, and, uniquely, with regards to listed companies in the U.K. and, other companies, took a mineral license with the Duchy of Cornwall.
We are the first company to be able to do this in over 40 years, and we actually co-wrote the license with the Duchy, and any other company that takes licenses with the Duchy going forwards will have to use the license that we co-wrote. This area and the Redmoor area both sit within the Tamar Valley mining district, an area that is historically mined but quite heavily, but very under-explored. We can example that with regards to the fact that last year we had a master's student working within the Duchy license area who discovered a tin tungsten vein at surface in situ that has previously been unmapped, unmined, and was unknown. However, with regards to more nearer term targets, we also have access to the Duchy's archives. We are, again, the only company that has these access.
That gives us access to exploration records, mining records, mine plans, and company records for companies that have undertaken mining and exploration with the Duchy of Cornwall in the past. These records have brought to light a series of exploration drill holes that were undertaken in the 1970s, and we are currently undertaking a test-based analysis of one of these targets, which is called the Plantation Vein, which we've previously discussed. On the completion of this test-based study and the modeling of this, we aim to therefore be able to announce the outputs of that study. To again put into perspective, the Plantation Vein is less than 10 minutes drive from Redmoor, and the aim going forward into the future is subject to a mine at Redmoor.
We can therefore develop further spokes on a wheel of assets to provide increased feed to our mine at Redmoor. The Redmoor project sits within Callington Town Council's remit. Councils within the U.K. have been asked to develop local area development plans or similar plans. The plan that Callington Town Council have produced includes a please put a mine here on their map and within their writing. This has gone through local consultation. It's also gone through legal compliance at Cornwall Council, and it's now back for again pre-consultation with the residents of Callington and Calstock. Subject to its final approval and subject to us submitting a planning application in the future, this will be given a positive weight on our planning application, which further strengthens our position and our ability to gain planning permission in the future. Mark, I'll let you continue.
Thank you. Now, a couple of slides on the commodity complex and the position of where we sit in the market. It's an extremely big topic to bottom out in an hour, but to give you some highlights. Tungsten has been designated as critical by the U.K., the EU, and the U.S.A., and we're glad to say that we are in discussions with governmental and commercial organizations in all three jurisdictions about how to better the Redmoor project and how to integrate it more quickly into the European and the Western supply chain. The tin and copper exposure at Redmoor is also not insignificant.
As a three-exposure company, we tick off some of the major critical minerals that are so necessary for all the uses on the right-hand side in the automotive industry, aviation, technology, and clean technology. Tungsten, as we've given the flavor of though, is the real driver of the value of the project and also the driver of the interest from the market. Tungsten is mainly used in high tensile industrial applications, as well as the defense industry, supporting a 6% or nearly 6% compound annual growth rate over the short to medium term.
The price of tungsten has really been supercharged in the last two months up towards and above the $50,000 a ton level, really down to geopolitical tensions between the USA and China, noting that 80% of refined tungsten is currently exclusively sourced from China for the global supply chain. The need to onshore and to secure Western supply chains, particularly in Europe, where we sit, is ever more needed. That gives us a very good strategic foundation upon which to build this project. Moving now to the Cobre magnetite stockpile. This is our asset in New Mexico in the USA, where we generate revenue and cash flow, which can be redeployed to support the topco of Strategic Minerals Plc, as well as reinvest into the Redmoor project in Cornwall. I'll hand over to Charles to give some highlights.
Thank you, Mark. At its heart, our fully owned subsidiary, the Southern Minerals Group, is a fairly straightforward logistics business. We operate at the site of the Chino mine, which is located approximately 15 miles to the east of Silver City in New Mexico, and we currently enjoy, as has been previously announced, a secure long-term exclusive access to the tailings from the copper mine. The access is currently secured until 2029. The tailings are essentially magnetite, and we sell the magnetite to a variety of customers in a range of industries, including the fertilizer industry and the paint industry, but the predominant usage is in the cement industry. Our customers arrive at our site with their trucks, which are weighed.
They're then loaded with magnetite and then re-weighed, with the difference obviously being the amount of magnetite that's been taken. We issue an invoice to the buyer, which is typically paid within about two weeks, so as you can see, it's a very straightforward model. 2023 was, as reported, a very poor year for sales, but as you will have seen, we recovered well in 2024, especially in the second half of the year.
By the end of 2024, we had shipped a total of around 70,000 tons for a total sales revenue of approximately $4.7 million. In 2025, we've already announced that in the first half of the year, our sales by volume were slightly down on 2024 by around 6%. That small decline was largely because in the second half of June, right at the end of the half-year period, there was a huge bushfire not too far from the site. Although our operation was never in danger, the authorities evacuated all personnel. That fire cost us about 7 or 8 days of production, and it was only ultimately extinguished by a torrential downpour that was so severe that the pit was then flooded for 2 days.
Without these extreme events, I believe the sales in the first half of 2025 would have been very similar to those of the first half of 2024. It's a rather unexciting business, but in this instance, that's really good. The cash flow that we derive from the operation is invaluable, and as a board, we really love the benefits that this business brings to us. Mark and I will be visiting the operation in New Mexico next week. And amongst other things, one of our priorities is to investigate how we can grow these sales numbers, following up a number of leads and thereby enhance the cash flows, something that our concurrent contractual arrangement allows us to do. It's a business that we cherish enormously.
It makes us unique, as I said at the beginning, amongst junior exploration companies in having our own cash flow, and we're very fortunate to have this business. Now I'll pass you back to Mark to talk about our copper oxide project in South Australia, Lee Creek.
The last asset in our portfolio is the Lee Creek Copper Mine. This was a former producer in 2010 and 2011, but shuttered quickly and put on care and maintenance, and Strategic Minerals acquired the asset in 2018. Located in South Australia, it's an interesting project and a near-term opportunity for development. However, it's non-core to us. It's in an awkward time zone if we're focusing on our sales efforts in New Mexico, USA, and also laser-focused on developing a critical minerals asset in the U.K. We've decided to divest of this asset and redistribute any proceeds into Redmoor. We have signed an option agreement with a sophisticated financial purchaser in Australia.
If that option is executed, we will receive just under AUD 6 million in cash payments and a share of first production, noting that production could occur as early as next year. We will retain 19.9% of a listed vehicle that purchaser intends to vend this asset into, thereby ensuring we have a very sufficient carry in an Australian copper developer and producer, which in any mining investment sense is a good option. As I said, we will use these funds to redistribute into developing Redmoor and other parts of the business. Moving on to the summary slide, some key highlights for you.
We really are unique amongst explorers, we believe, because we have, revenue and cash flow, and a mix of development assets, and so we can ideally support the top co and reinvest into our main flagship projects without necessarily having to come back to the market. We have world-leading grades at Redmoor. We really do believe this is a world leading asset, top-tier asset. And as shown throughout the presentation, there are significant opportunities to only increase that. We have highly profitable economics already on 2020 scoping study numbers, which incidentally used very conservative pricing assumptions. We will work hard to recalibrate those in the coming months and years. We have an accelerated timeline.
As I highlighted, we could be a low capital intensity option, and therefore a relatively near-term producer of tungsten, copper, and tin in the Cornwall region, and we fully intend to put this into production. We're significantly undervalued. Here we've given a snapshot of where we sit relative to those conservative scoping study post-tax numbers, but also to highlight that there is a Zeus research note that also demonstrates our fair value is way above where the current share price and market cap sit despite our re-rating in the last couple of weeks. That concludes our presentation this morning, and thank you very much for your time. We'll leave you here with our contact details and also a fabulous photo of drilling live, almost live in Redmoor, Cornwall.
I'm now gonna switch over to what is a huge set of questions, and we really are grateful for your interest in the project. We'll do our very best to work through all of these. Jake, I'd be grateful if you could give me a shout if we're running out of time. I'm just gonna take a couple of seconds to read each question carefully so that we understand as a board what we're answering, and then we'll do our best to move through them, myself in the lead, and then with support from Dennis and Charles as we move through. Number 1, when do you anticipate a new updated website will be produced plus more regular PR? I'll take that one.
Delighted to say that we relaunched our website last week. That can be found at www.strategicminerals.net as per the final slide of our presentation. I think it's a brilliant website. It's very functional. It works on all applications and all devices. We've also engaged with Vigo Consulting, who are a designated investor relations and PR firm in London, and we work very closely with them on our media strategy, our PR, both across social media as well as RNS mediums, and we really do want to sort of start telling a good story here. Number two, can you confirm latest position on LCCM, Lee Creek Copper Mine, and the expected timelines? I'm gonna ask you to respectfully review our RNSs on that particular issue.
As I said, we've signed a call option with a sophisticated financial buyer that has a six-month term, and I can confirm we're in close negotiations and well within that timeframe for ongoing developments and completion. Number three, what's the roadmap for developing Redmoor? I will ask Dennis to help with that in a second, but you know, the highlights are we are doing the work right now. We are internally working out how long it takes, what steps we need to take, and how much it'll cost. I can give you a flavor, which will be an updated scoping study, moving to a pre-feasibility study, moving to a definitive feasibility study, and then a final investment decision.
The timeline for that and the costs for that are to be updated, and we will update the market in H1 next year once we've completed that work. I'm confident that we will be competitive relative to in the current industry standards, both in cost and timeline. Dennis, would you like to give a little bit more flavor if we can?
Yeah. As part of the ongoing grant-funded project, we've already undertaken the gap analysis between the Redmoor scoping study and where we need to be for PFS. As part of updating the mineral resource estimate, the economic model, and the mining model, we will therefore, and subject to the inclusion of the 1980s data sets, we will therefore come up with a drilling plan for moving Redmoor from inferred to indicated and also then a refined model of how to take Redmoor through its feasibility studies, and this will be announced in Q1 of 2026 as part of the final output of the grant-funded works.
Thank you. Another question, how are you increasing your exposure to institutional investors as opposed to retail ones? What other steps are you taking to broaden your appeal to a wider audience? Well, thank you. That's a very important and timely question. We've just completed a roadshow with our joint brokers, SP Angel and Zeus, and I can confirm we had 20 meetings with institutional and ultra-high-net-worth individuals, to really do exactly that, increase our exposure to those, investors. I can confirm within our collective networks at the board level as well, we also have significant links into institutional and sophisticated investors globally, and we continue to tell the story all the time. Now that we've relaunched and now that we've started drilling, this is an exciting phase in the business, and the market really wants to see critical mineral assets.
We are fully engaged, and we're looking forward to updating institutional investors even further into the end of this year. Can you give an indication of the CapEx required to start production? Is there scope for joint processing with Tungsten West PLC? And when do you envisage updating on the preliminary feasibility study? Thank you. We've touched upon that, and I'll sort of reiterate a couple of points and then hand over to Dennis as well. On the CapEx, look, we can't give you a firm number right now. We need to recalibrate the 2020 scoping study numbers. As I said, you know, we hope to hang on to one of those key pillars, which is that this is a low capital intensity operation, which will therefore lead to a near-term cash flow scenario.
Is there scope for joint processing with Tungsten West? I would say yes. We're in close contact with all our peers in the market. It is very handy. There is a processing facility a mere 50 km away from us, and clearly there are some interesting conversations to be had as we both move towards joint production decisions. At the moment, we are, you know, maintain a good relationship, but there's nothing formal to speak about. When do you envisage updating on the preliminary feasibility study or PFS? Well, as I said, we're doing that work at the moment, and the timeline and the costing will be competitive. I can't update on that at the moment, but, you know, I think within a suitable timeframe, you'll see some good numbers from us. Dennis, have I missed anything?
No. Just to say that CapEx inflation has been a thing in the last five years, especially since both the Russia-Ukraine war and the kind of supply chain shocks coming out of COVID. However, we are seeing the fact that metal prices are outpacing CapEx in inflation, so we hope therefore to see, you know, a positive increase in economics going forwards. With regards to the pre-feasibility study and with regards to Tungsten West, the pre-feasibility study is an options model. You know, we look at all options of how you are going to build the mine and develop it.
Part of that, therefore, options model is to look at nearer-term ways of getting processing undertaken and the CapEx effects that would have with regards to processing off-site. It will form part of a PFS in the future.
Thank you. Next question. Do the higher tungsten grades at Strategic Minerals compared to Tungsten West make the economic case more viable? Again, hard to say right now, and clearly we won't comment on other peer groups' production decisions. All to say the high grade really makes a difference when it comes to capital intensity and profitability. I think, you know, we will demonstrate a very compelling economic opportunity because of our high grade. Also in any declining price scenario in the market, higher grade really gives a cushion, and also sophisticated stakeholders or potential acquirers will look for a high-grade option above a low-grade option. I think, again, we will provide a very compelling and robust opportunity moving forward.
Mark, can I just add into that as well?
Of course.
Part of the work that we're doing with the gap analysis and the outputs is looking at stope optimization, and as part of the remodeling of the mineral resource and the mining economic output, that is looking at, you know, metal prices currently and how that affects and how that interlinks with our grades and showing just how much of the deposit will be economic subject to, you know, a significant market change. High grades does also mean that we have the option of therefore being an underground mine. We can high-grade the deposit, and again, that provides different routes to and different outcomes when it comes to economics. When it comes to processing high grades, processing plants like high grade, they work more efficiently with high grade.
We have the option to further high-grade our resource looking at ore sorting, as well, and therefore the economics of processing a higher-grade deposit are very beneficial.
Next question is, what would really accelerate free cash at the American operations being Cobre? The simple answer there is increasing sales. We've had some very high-quality customers, some very competitive pricing. But we are, as we've indicated, you know, below capacity there by nature of the number of customers we have. Increasing those customers or increasing the purchase levels of those customers over time will accelerate our free cash flow, given the large extent of the operating costs are fixed. Next question. What is the plan with the Duchy of Cornwall land? Dennis, I'm gonna hand that one to you.
We've got a number of ongoing work streams. We have increased the team here at Redmoor, including a project geologist. As part of his role, he is undertaking the desk-based reviews of the datasets that we have both collected ourselves and those that we've gained access through the Duchy of Cornwall's archives. That kind of forms the main basis of our initial targeting. We've also undertaken some soil sampling within one of the kind of extension areas adjacent to Redmoor with the Duchy, and we aim to extend that sampling over the next year across a larger area of the Duchy. We have undertaken and it's kind of leading into what we already did with Redmoor a few years ago with the Deep Geothermal Cornwall project.
We've undertaken geophysics that overlaps into the Duchy area, and we will look at both expanding and then further processing this dataset to again look at targets. But the main part of and the main plan for the Duchy is to continue our activities to develop and to find targets that aren't just, you know, small scale intercepts, but actually can lead to development of additional resources and for these additional resources to feed into a future mine at Redmoor.
Next question is any plans to move from the AIM market to the main market at the earliest opportunity? Well, thank you for the question. There's a carefully crafted plan here to restructure and recapitalize, and we are moving through that plan. I would say to move to the main market in the very immediate term, the answer is no. We really need to increase our institutional shareholder exposure first and to increase the market cap even from where we are at the moment, and more towards fair value. We would then make a decision on moving exchange, but at the moment, we won't be. You mentioned silver at the outset. Do you have any idea of the potential number of ounces? Dennis, if you could take that one.
The Tamar Valley is historically known for its silver production, including the historical mines that form the Redmoor Consolidated Mines. These are four lode structures that contained tungsten, copper, tin, and other metals, but also had silver production. These four mines were joined together by a north-facing lode that contained lead and silver as well and were also mined for their silver. The wider area is also noted to have contained significant resources of silver, with our license area having a number of mines, including Wheal Brothers, the Prince of Wales mine, and others that produced silver in the past. Our RNS from June 2025 included an initial review of our copper grades. We understand that the silver at Redmoor is incorporated into our chalcopyrite.
When we are reporting grades of copper, we are potentially also reporting silver as well. For our average resource grade of 0.5% copper, we report about 18.9 grams per ton of silver. We also note that in the higher grade copper part of the resource, we're reporting significantly higher amounts of silver as well. Our modeling and analysis this year, including the metallurgical test works, will both look at the silver values across the resource, but also the recoveries of potential silver from the copper stream, as part of the metallurgical test works.
Following that update and following the model and the recoverabilities from the metallurgical test works, we'll be able to therefore add numbers to the ounces of potential silver that may be produced on an annual basis from a mine at Redmoor. However, you can read the Zeus note from their initiation of research at Redmoor, which includes a small commentary with regards to their expected additional added value to Redmoor by the silver.
Forgive me, I just dropped out there. So thank you, Dennis, for taking that question. Next question. Are there expected to be any significant permitting or environmental hurdles to overcome to develop the mine? Well, thank you for the question. It's important because developing a mine in any jurisdiction is rigorous, and developing a large industrial project in the U.K. is even more rigorous. I'm confident that we have done an extremely good job in being in line with all environmental requirements so far and having built extremely strong relationships with all the necessary planning environmental bodies in the region. I'm gonna hand over to Dennis to give a bit more of a flavor on that. As with any operation in any country, there could be misuse. As I said, I'm confident we are on top of all of them.
This year's work, again, looking at the gap analysis between our scoping study and our PFS, have come with a number of additional items and a number of work streams that were already underway or things that we need to do going forwards. This includes the permitting and environmental monitoring. Some of those that we've already started, and some of them that we will start as part of the PFS and other feasibility projects. The team at Redmoor were the first exploration team to gain permission via a full planning permission for borehole drilling. Most borehole drilling in the U.K. is done by General Permitted Development Order, which allows companies to drill for six months. We, however, took a decision to take a full planning permission.
This meant a more vigorous review of our environmental standards and our permitting routes, but it allowed us up to two years’ worth of drilling instead of six months. This was also decided via delegated authority from the council's planning officers rather than going in front of the full planning board, again, showing the strengths of the application and the thoroughness of our works. For our future planning application for our Redmoor mine, again, our local area development plan includes the prospect of having a mine in the area, and that will gain some weighting. Cornwall Council itself has shown that it is highly supportive of the extractive industries, and especially for critical minerals, and their aim is to aid in the planning permitting of these projects.
The U.K. government has recently taken the decision to back other projects that are submitting or going through the planning permitting process and helping them with the ability for them to gain planning permission at an accelerated pace. This is something that we will look forward to potentially reviewing with the government in the future. Thank you, Mark.
Next one. In light of recent developments of the U.S. government investing in domestic explorers or developers, have you had any approach from the U.K. government in this regard? I'm delighted to say we're very closely connected to the U.K. government, in all sorts of ways. One, the U.K. government, through the UK Shared Prosperity Fund, has invested directly in the research and development of this project, as we've briefed this morning. Dennis Rowland is a committee member of the Critical Minerals Association, which is in direct contact with the government on all areas of critical minerals strategy. You will have seen from other companies operating in our region that there is significant interest from the U.K. government in supporting those operations through grant or shared cost funding. We are closely connected with them.
We will continue to press on those relationships and I hope we can, you know, build on our track record of already securing UK government funds for the research and development phase of this project. When will you roughly expect to see the next set of borehole or drill hole results for the remaining mineral investigations? As you would have seen last week, we announced our first set of assay results. Between now and Christmas, we will continue to update the market on our drilling results as and when we receive assays from the lab. I'm not gonna give a firm timeline on that, but between now and Christmas will be our key news flow phase.
Is it feasible that profits from Cobre over the coming years could be used to complete the PFS and full feasibility study without the need for further dilution or reduction of 100% ownership for Redmoor? Thank you for the question. It is a key question and focus of the board. Ideally, yes, Cobre is a significant asset for us in terms of revenue and cash flow. We believe that we can fund the majority of our development processes at Redmoor going forward from that operation and the sale of the Lee Creek copper asset.
As you will have seen, we have only raised money in the market under our tenure for strategic objectives, i.e., to accelerate a project forward or to recapitalize, and we fully intend to maintain that strategy only coming to the market when we really have to. I hope that answers that question. Should the rest of the drilling results be favorable, what is the next step? How long before we start mining? What will be the cost? What will this be self-funded, or are there further placements? I hope we've answered some of those questions from above to say that once the drilling results are out on this particular phase, we will then move to further phases of drilling to complete PFS and DFS.
As I've said, we don't intend to come back to the market unless we really have to. I hope that we will be self-funded to the vast majority right the way through. Noting that, with 10 minutes to go, we have a lot of questions to go, and I appreciate your huge interest in the project. A number of these questions have already sort of we've touched upon, so forgive me if I'm skipping through those. We do want to get all sort of key points of this discussion. The Redmoor deposit is very deep. What is the mining plan, please, and are the costings realistic? Dennis, could you take that?
I don't think it's very deep in a Cornish context with regards to if you look at South Crofty, their deepest workings are well over 700 meters deep. The mining model that was used in the 2020 scoping study is long-hole stoping on retreat, which is again a kind of expected and traditional and well-used mining method for this type of deposit and one that is being used in Cornwall. The mining plan and study for the scoping study was undertaken by Wardell Armstrong, who again are, you know, an international standard consultancy for this type of work. The processing part of that was undertaken by Fairport, again who produce output reports for global leading mining companies across multiple types of projects.
The cost assumptions were appropriate for 2020, and obviously there has been some CapEx inflation since then. However, again, the metal price assumptions have also gone up, and therefore we look to be fairly in line. With regards to the CapEx assumptions as well, the feasibility study will look at other styles of mining and other ways of processing the ore or other localities for processing the ore. Again, these will affect future potential CapEx requirements for the project. We are very confident in the work that has already been undertaken at Redmoor.
Thank you. Are there other parts of the U.K. with the potential for exploring for rare earths? Well, I'm not gonna comment on rare earths, but are there other parts of the U.K. with the potential for exploring for some of the critical minerals we have? The answer is yes. We have a very commanding position, as you will have seen from our ability to restructure, recapitalize, and gain a lot of market interest. We have a commanding position in the Cornish region as well, and I hope that we will expand that land position and expand our ability to look at multiple assets, both in the Cornish region and the U.K. as we gain even further traction in the market. Couple here, more here about government engagement with the U.K. I think we've respectfully covered that.
As a new shareholder, can you talk about how the recent Redmoor tungsten results are compared to the old ones, which you already had? Dennis, that's a great question for you to add a little bit of color.
Yep. Our previous drilling results were spaced at an inferred spacing. For Redmoor, that's over 100 meters spaced across the resource. Some of the results therefore this year are spaced closer together. This is to test the spacing between what we would use for an inferred to an indicated resource that adds confidence and allows us the ability to move into PFS. One of the assumptions historically for a high-grade resource is, are you high grade? Have you just been lucky? You know, did every hole intersect just a big nugget of tungsten, or is Redmoor high grade? By testing that short space continuity of grade and structure, we can show that we are high grade. The first borehole that we have reported was within the zone of the Redmoor deposit.
It is also a twin of a 1980s hole. We have shown that the grades are high grade and consistent with the Redmoor deposit. We therefore hope that the additional holes that we have seen and we have drilled can continue to show this. The boreholes that we are drilling and have completed and reported as of yesterday have all intersected the sheeted vein system, some of these in areas of the deposit that have previously been untested. We have shown that the sheeted vein system is consistent across these holes and that again, the logged and visually logged and pXRF mineralization again is consistent with the rest of the sheeted vein system. Again, this confirms Redmoor as the highest grade undeveloped tungsten resource in Europe and one of the highest grades in the world.
Thank you. I'm told we have time for 2 more questions. Number one, what is the life of the Cobre stockpile? Well, we have access to that until and through part of 2029. And as Charles has mentioned, myself and Charles will be out in New Mexico next week, understanding that further. Last question. Can you give us a sense of how often drilling results will be coming through for Redmoor? If 3 have been drilled so far this year, how many more could be expected by year-end? Well, I'm delighted to say we're well on track to complete the 9 holes that we envisaged before year-end, and the results will be coming through between now and Christmas, and slightly after Christmas as well, as we receive assay results from the lab.
I'm confident that the results we've demonstrated so far, you'll be, you know, sufficiently pleased with the results coming through. Jake, thank you very much for mastering the Q&A session. I'm gonna hand back to you for the last comments.
Perfect. Guys, that's great. Thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this morning. Of course, if there are any further questions that do come through, I will make these available to you immediately after the presentation has ended. Mark, perhaps before really now just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that'd be great.
Thank you very much. Well, first of all, thank you very much for your interest, and we're absolutely delighted at how many people have turned up to this call and asked some really in-depth questions. We consider that relaunch of this company and relaunch of this asset complete, and I hope that we can continue to please you with our developments in the rest of this year and the coming years.
To summarize on this company, Strategic Minerals Plc is really unique among explorers in that we have a mix of production and development assets, and that allows us to use some of our revenue and cash flow from our asset in the U.S. to support the top co and to reinvest into Redmoor as a critical minerals asset at exactly the right time for critical minerals. We also, as we've highlighted, have other opportunities to redistribute cash into Redmoor, and I hope that we can, you know, go a very long way down the development path towards FID from those proceeds. We have world-leading grades at Redmoor. It's a tier one asset that is undiscovered, and we are just revealing the real nature and strategic value of that asset as we move forward into 2026.
We have good profitable economics already on a 2020 scoping study, and we're really looking forward to updating you on a recalibrated scoping study into feasibility study and into definitive feasibility study, where we hope to demonstrate high profitability, high grade, high quality product, low capital intensity. I'd just like to thank you all for sticking with us, and the journey so far, and I think we'll have a very exciting 2026 to come, and I look forward to meeting many of you in person or indeed online again in our future roadshows, both retail and institutional. Thank you very much for your time this morning.
That's great. Mark, Charles, Dennis, thank you once again for updating investors this morning. Could I please ask investors not to close this session, as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Strategic Minerals Plc, we would like to thank you for attending today's presentation. That now concludes today's session, so good afternoon to you all.