Strategic Minerals plc: SML Proposed Acquisition of Ebony Iron Pty Ltd ("Ebony")

LONDON, August 19, 2011 -

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Strategic Minerals Plc (AIM: SML) today announces that it has entered into a heads of terms agreement with Ebony, a privately held Australian mining company, for its acquisition (the “Acquisition”). The Acquisition is subject to the completion of satisfactory due diligence and Strategic Minerals agreeing a sale and purchase agreement with the shareholders of Ebony (”SPA”).  Further announcements will be made in due course.

It is intended that under the SPA Strategic Minerals will acquire 100% of the issued share capital of Ebony for a consideration of 10 million pounds sterling to be satisfied by the issue of 100 million new fully-paid ordinary shares in SML to Ebony at an issue price of 10 pence per share.  Ebony shareholders will, in aggregate, receive a further consideration of 50 million new ordinary SML shares subject to the confirmation of an Australasian Joint Ore Reserves Committee Code (”JORC”) indicated resource of a minimum of 200 million tonnes of iron ore by Ebony.

The board of directors of SML (the “Board”) considers the acquisition to be an excellent opportunity for the Company, providing it with positive cash flow within the short term and access to additional iron ore production and exploration assets, while strengthening the Board and Company management.

Ebony has revenue generating assets comprising magnetite stockpile which are already contracted or in negotiation and a full update will be made in due course. Stockpile projects eliminate mining risk and are production ready.

Additional Ebony assets comprise:

*the iron ore rights to three tenements in the Northern Territory of Australia (the “Northern Territory”) close  to known iron ore reserves; and

*in addition, negotiations are underway to acquire the iron ore rights on a further two tenements in the Northern Territory and the iron ore rights to four tenements in Western Australia close to known iron ore reserves and infrastructure.

On completion of the Acquisition, it is the intention of the Company to appoint Mr Peter Bennetto and Mr James Chisholm who are current directors of Ebony and both shareholders in Ebony, to the Board of Strategic Minerals.

Peter Bennetto:

Mr Bennetto has over 30 years’ experience in banking and investment having held a number of company director positions in exploration, mining and manufacturing companies listed on the Australian Stock Exchange (”ASX”) since 1990.  He is a founding director of Anaconda Nickel Ltd and currently Non-Executive Chairman of Ironbark Zinc Ltd and Waratah Gold Ltd.

James Chisholm:

Mr Chisholm worked in the engineering, oil, gas and mining sectors for the past 28 years.  He has specialised in providing market research, strategy development and M&A assistance to mining, engineering, oil and gas companies.  He is a founding shareholder of Doyles Creek Mining, co-founded The Chairmen1 Pty Ltd and Fertoz P/L.

Pat Griffiths, CEO of Strategic Minerals, commented:

“This decision is in line with the Directors’ objectives outlined in our recent admission document where we stated that “the Directors are aware of the prospects for expansion by acquisition and will investigate any suitable potential opportunities as and when they arise.”

“We see the Ebony acquisition as a positive step towards the development of Strategic Minerals into a well-balanced mining and exploration company with short term positive cash flow providing additional security to shareholders.”

Peter Bennetto, Chairman of Ebony, commented: “Melding SML’s exploration assets and capital markets access with our production expertise and the Ebony team’s ability to acquire positive cash flow operations to fast track growth, we feel we can build a great company and a powerful business.”

About Strategic Minerals plc

Strategic Minerals is a Queensland-based company incorporated in the UK on 16 November 2010.  The Company’s wholly owned subsidiary, Iron Glen Pty Ltd, has title to the Iron Glen Tenement that is located approximately 40 kilometres southwest of Townsville, Queensland (the “Tenement”).  The Tenement covers an area of approximately 2,100 hectares and lies around 10km from existing rail and road infrastructure that links into Townsville’s deep water port, which has all year round bulk loading facilities.  For more information about Strategic Minerals, please go to strategicminerals.co.uk.

You can also follow the Company on Twitter @StrategicMinrls as well as Facebook and LinkedIn.  

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About Ebony Iron Pty Ltd

Ebony was formed on 30 November 2010 to acquire the rights to an existing magnetite tailings dam with approximately 1-1.5 million tonnes of magnetite at an average 62% Fe.

Since acquiring the rights to the magnetite tailings, Ebony has researched additional stockpiles and tailings sites, as well as reviewing highly prospective iron ore tenements around Australia, Asia, South America and the USA

The Company seeks to achieve this exposure by combining the development of finite, income generating iron ore stock piles with exploration and extraction of known or highly prospective in-ground iron ore assets.

www.ebonyiron.com

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Strategic Minerals plc
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