REG - Cornish Metals Inc. - UNAUDITED FINANCIAL STATEMENTS ENDED 30 APRIL 2023
22/06/2023 07:00
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RNS Number : 5179D Cornish Metals Inc. 22 June 2023
CORNISH METALS RELEASES UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S
DISCUSSION AND ANALYSIS FOR THE THREE MONTHS ENDING 30 APRIL 2023
Vancouver, June 21, 2023
Cornish Metals Inc. (TSX-V/AIM: CUSN) ("Cornish Metals" or the "Company"), a
mineral exploration and development company focused on its projects in
Cornwall, United Kingdom, is pleased to announce that it has released its
unaudited financial statements and management, discussion and analysis
("MD&A") for the three months ended April 30, 2023. The reports are
available under the Company's profile on SEDAR (www.sedar.com
(http://www.sedar.com) ) and on the Company's website (www.cornishmetals.com
(http://www.cornishmetals.com/) ).
Highlights for the three months ended April 30, 2023 and for the period ending
June 21, 2023
(All figures expressed in Canadian dollars unless otherwise stated)
· Drill program nearing completion at South Crofty to collect samples
for metallurgical testwork as part of the Feasibility Study, with drilling
expected to be finished by the end of June 2023;
· Construction of the water treatment plant ("WTP") substantially
complete with commencement of dewatering expected later in summer 2023 at a
construction cost estimated to be between £6.5 million and £7.0 million
($11.1 million and $11.9 million at quarter end exchange rate);
· First submersible pump currently being installed in New Cook
Kitchen's ("NCK") shaft with the second pump expected to commence installation
by the end of June 2023;
· Two single drum winders have been ordered for the shaft re-access
work, with the main winder due on site in October 2023 and the emergency
winder due for delivery in August 2023;
· Remedial work underway on the south headframe above NCK shaft in
readiness for the installation of the main winder;
· Work on the Feasibility Study continues with completion planned by
the end of 2024; and
· Further digitization of historic assay information and data from the
metallurgical drilling program is being incorporated into an updated Mineral
Resource Estimate with a targeted release date for the end of September 2023;
Richard Williams, CEO of Cornish Metals, stated, "It is just over a year since
the £40.5m financing led by Vision Blue Resources completed, and we are
pleased with the excellent progress that has been made during this time.
Dewatering of the mine is on track for commencing later this summer and other
aspects of the project are well underway.
"With the completion of the metallurgical drill programme this month, we look
forward to continuing the exploration programme of the Wide Formation at Carn
Brea in the coming weeks to demonstrate the Mineral Resource potential of this
target."
Financial highlights for the three months ended April 30, 2023 and April 30,
2022
Three months ended (unaudited)
April 30, 2023 April 30, 2022
(Expressed in Canadian dollars)
Total operating expenses $924,120 $627,115
Loss for the period $206,802 $979,427
Net cash used in operating activities $1,030,901 $625,384
Net cash used in investing activities $7,027,003 $1,184,673
Net cash used in financing activities $723 $555,449
Cash at end of the period $49,078,875 $4,286,535
· Increase in operating costs impacted by higher insurance costs
attributable to more site-based activities primarily relating to the
construction of the WTP and related dewatering work;
· Expenditure of $3.4 million incurred during the period on the
construction of the WTP and related dewatering equipment, as well as new or
replacement equipment for the mine;
· Other project related costs of $3.4 million incurred during the
period relating to the advancement of South Crofty to a potential construction
decision, primarily for the metallurgical drill program and planning
activities for dewatering and shaft re-access;
· Interest income of $388,384 arising from increased interest rates
being received on higher cash balance following the Offering; and
· Recognition of foreign currency translation gain of $3.0 million for
those assets located in the UK when translated into Canadian dollars for
presentational purposes.
Construction progress of water treatment plant at South Crofty
· Construction progress of the WTP at South Crofty has included various
enabling works, including completion of the treated water discharge duct from
the WTP and the concrete foundation pad for the WTP itself. The pipelines
carrying water from the submersible pumps in NCK shaft to the WTP are also
complete;
· The WTP comprises nine reaction tanks for increasing and decreasing
the pH to precipitate the various metals in solution, and six inclined plate
settling tanks (lamella clarifiers) to remove the precipitated solids. All
the tanks and clarifiers have been installed, as have the structural steel
supports and walkways which provide access to the WTP;
· The installation of mechanical, electrical and instrumentation
equipment is expected to be completed in the first half of August 2023.
Reagent storage, make-up and dosing equipment have been supplied as complete
packages from specialist manufacturers;
· The building housing the high voltage power supply/sub-station and
the variable speed drives required to operate the pumps is complete, and the
11kV power supply is scheduled to be in place by the end of June 2023. A
turbine will be added ahead of the discharge point that will generate up to
15% of the electricity required to operate the WTP;
· Wet commissioning of the WTP is expected to commence in August 2023,
with commencement of mine dewatering expected shortly thereafter; and
· Overall, the cost of construction for the WTP is expected to be
between £6.5 million and £7.0 million ($11.1 million and $11.9 million at
quarter end exchange rate).
Outlook
The proceeds raised from the Offering completed in May 2022 are being used to
advance the South Crofty tin project to a potential construction decision
within 30 months from closing of the Offering. The planned use of the
proceeds from the Offering is to complete the dewatering program and
Feasibility Study at South Crofty, evaluate downstream beneficiation
opportunities and commence potential early works on-site in advance of a
potential construction decision.
Within 30 months from the closing of the Offering, the Company's plans are as
follows:
· Construct WTP and commence dewatering during summer 2023 and
thereafter complete the dewatering of the mine within 18 months;
· Complete a drill program for metallurgical studies and to produce an
updated JORC (2012) compliant Mineral Resource estimate for a Feasibility
Study;
· Complete a Feasibility Study using all reasonable commercial efforts
by the end of 2024; and
· Commence basic and detailed engineering studies, construction of the
processing plant, refurbishment of underground facilities and other on-site
early works.
A follow up drill program is also being planned to determine the continuity of
mineralization and to better define the geometry and extent of the Wide
Formation at Carn Brea. This follow-up program is expected to commence at the
beginning of July 2023, as soon as the metallurgical drill program as
described above is completed.
Subject to the availability of financing, consideration will also be given to
continuing with the Company's exploration program at United Downs and
evaluating other near-surface, high potential, exploration targets within
transport distance of the planned processing plant site at South Crofty.
ABOUT CORNISH METALS
Cornish Metals completed the acquisition of the South Crofty tin and United
Downs copper / tin projects, plus additional mineral rights located in
Cornwall, UK, in July 2016 (see Company news release dated July 12, 2016
(https://www.cornishmetals.com/site/assets/files/5021/2016-07-12_nr.pdf) ).
The additional mineral rights cover an area of approximately 15,000 hectares
and are distributed throughout Cornwall. Some of these mineral rights cover
old mines that were historically worked for copper, tin, zinc, and tungsten.
TECHNICAL INFORMATION
The technical information in this news release has been compiled by Mr. Owen
Mihalop. Mr. Mihalop has reviewed and takes responsibility for the data and
geological interpretation. Mr. Owen Mihalop (MCSM, BSc (Hons), MSc, FGS,
MIMMM, CEng) is Chief Operating Officer for Cornish Metals Inc. and has
sufficient experience relevant to the style of mineralisation and type of
deposit under consideration and to the activity which he is undertaking to
qualify as a Competent Person as defined under the JORC Code (2012) and as a
Qualified Person under NI 43-101. Mr. Mihalop consents to the inclusion in
this announcement of the matters based on his information in the form and
context in which it appears.
For additional information please contact:
In North America:
Irene Dorsman at (604) 200 6664 or by e-mail at irene@cornishmetals.com
(mailto:irene@cornishmetals.com)
In the UK:
SP Angel Corporate Finance LLP Tel: +44 203 470 0470
(Nominated Adviser & Joint Broker)
Richard Morrison
Charlie Bouverat
Grant Barker
Hannam & Partners Tel: +44 207 907 8500
(Joint Broker)
Matthew Hasson
Andrew Chubb
Jay Ashfield
BlytheRay Tel: +44 207 138 3204
(Financial PR/IR-London)
Tim Blythe tim.blythe@blytheray.com (mailto:tim.blythe@blytheray.com)
Megan Ray megan.ray@blytheray.com (mailto:megan.ray@blytheray.com)
ON BEHALF OF THE BOARD OF DIRECTORS
"Richard D. Williams"
Richard D. Williams, P.Geo
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
Caution regarding forward looking statements
This news release contains "forward-looking statements" including, but not
limited to, statements in connection with the expected use of proceeds of the
Offering, including in respect of certain work programs, expected
construction, including in respect of the WTP, and the potential completion of
a Feasibility Study on the South Crofty mine and the timing thereof, the
exploration program at United Downs and other exploration opportunities
surrounding the South Crofty tin project, expected recruitment of various
personnel, and expectations respecting tin pricing and other economic
factors. Forward-looking statements, while based on management's best
estimates and assumptions at the time such statements are made, are subject to
risks and uncertainties that may cause actual results to be materially
different from those expressed or implied by such forward-looking statements,
including but not limited to: risks related to receipt of regulatory
approvals, risks related to general economic and market conditions; risks
related to the COVID-19 global pandemic and any variants of COVID-19 which may
arise; risks related to the availability of financing when required and on
terms acceptable to the Company and the potential consequences if the Company
fails to obtain any such financing, such as a potential disruption of the
Company's exploration program(s); the timing and content of upcoming work
programs; actual results of proposed exploration activities; possible
variations in Mineral Resources or grade; failure of plant, equipment or
processes to operate as anticipated; accidents, labour disputes, title
disputes, claims and limitations on insurance coverage and other risks of the
mining industry; changes in national and local government regulation of mining
operations, tax rules and regulations.
Although Cornish Metals has attempted to identify important factors that could
cause actual results to differ materially from those contained in
forward-looking statements, there may be other factors that cause results not
to be as anticipated, estimated or intended. There can be no assurance that
such statements will prove to be accurate, as actual results and future events
could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements. Cornish Metals undertakes no obligation or responsibility to
update forward-looking statements, except as required by law.
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Expressed in Canadian dollars)
April 30, 2023 January 31, 2023
ASSETS
Current
Cash $ 49,078,875 $ 55,495,232
Marketable securities 2,774,121 2,718,936
Receivables 1,184,781 656,407
Prepaid expenses 552,251 371,977
53,590,028 59,242,552
Deposits 85,554 54,165
Property, plant and equipment 13,452,835 9,721,352
Exploration and evaluation assets 38,418,329 33,088,129
$ 105,546,746 $ 102,106,198
LIABILITIES
Current
Accounts payable and accrued liabilities $ 3,022,646 $ 2,494,642
Lease liability - 642
3,022,646 2,495,284
NSR liability 9,306,070 9,149,804
12,328,716 11,645,088
SHAREHOLDERS' EQUITY
Capital stock 128,394,652 128,377,152
Share subscriptions received in advance - 17,500
Capital contribution 2,007,665 2,007,665
Share-based payment reserve 384,758 384,758
Foreign currency translation reserve 2,314,760 (648,962)
Deficit (39,883,805) (39,677,003)
93,218,030 90,461,110
$ 105,546,746 $ 102,106,198
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Canadian dollars)
Three months ended
April 30, 2023 April 30, 2022
EXPENSES
Travel and marketing $ 89,590 $ 110,878
Depreciation - 443
Insurance 172,430 33,509
Office, miscellaneous and rent 51,613 28,978
Professional fees 200,735 169,597
Generative exploration costs 2,607 333
Regulatory and filing fees 33,274 21,244
Salaries, directors' fees and benefits 373,871 262,133
Total operating expenses (924,120) (627,115)
Interest income 388,384 743
Foreign exchange gain (loss) 370,892 (353,055)
Unrealized loss on marketable securities (41,958) -
Loss for the period (206,802) (979,427)
Foreign currency translation 2,963,722 (1,152,758)
Total comprehensive income (loss) for the period $ 2,756,920 $ (2,132,185)
Basic and diluted income (loss) per share $ 0.01 $ (0.01)
Weighted average number of common shares outstanding: 535,265,094 285,850,157
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Canadian dollars)
For the three months ended
April 30, 2023 April 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (206,802) $ (979,427)
Items not involving cash:
Depreciation - 443
Unrealized loss on marketable securities 41,958 -
Foreign exchange loss (gain) (370,892) 353,055
Changes in non-cash working capital items:
Increase in receivables (528,374) (33,218)
Increase in prepaid expenses (167,194) (28,727)
Increase in accounts payable and accrued liabilities 200,403 62,490
Net cash used in operating activities (1,030,901) (625,384)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (3,179,655) (2,661)
Acquisition of exploration and evaluation assets (3,818,598) (1,171,500)
Increase in deposits (28,750) (10,512)
Net cash used in investing activities (7,027,003) (1,184,673)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from fundraising received in advance of share issue - 30,000
Increase in deferred financing fees - (584,359)
Lease payments (723) (1,090)
Net cash used in financing activities (723) (555,449)
Impact of foreign exchange on cash 1,642,270 (270,663)
Change in cash during the period (6,416,357) (2,636,169)
Cash, beginning of the period 55,495,232 6,922,704
Cash, end of the period $ 49,078,875 $ 4,286,535
Cash paid during the period for interest $ - $ -
Cash paid during the period for income taxes $ - $ -
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS'
EQUITY
(Unaudited)
(Expressed in Canadian dollars)
Number of shares Amount Share subscriptions received in advance Capital contribution Share-based payment reserve Foreign currency translation Deficit Total
reserve
Balance at January 31, 2022 285,850,157 $ 56,846,350 $ - $ 2,007,665 $ 630,265 $ (174,123) $ (38,599,036) $ 20,711,121
Commitment to issue shares - - 30,000 - - - - 30,000
pursuant to fundraise
Foreign currency translation - - - - - (1,152,758) (1,152,758)
-
Loss for the period - - - - - - (979,427) (979,427)
Balance at April 30, 2022 285,850,157 $ 56,846,350 $ 30,000 $ 2,007,665 $ 630,265 $(1,326,881) $ (39,578,463) $ 18,608,936
Balance at January 31, 2023 535,020,712 $128,377,152 $ 17,500 $ 2,007,665 $ 384,758 $ (648,962) $ (39,677,003) $ 90,461,110
Warrant exercise 250,000 17,500 (17,500) - - - - -
Foreign currency translation - - - - - 2,963,722 2,963,722
-
Loss for the period - - - - - - (206,802) (206,802)
Balance at April 30, 2023 535,270,712 $128,394,652 $ - $ 2,007,665 $ 384,758 $2,314,760 $ (39,883,805) $ 93,218,030
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