REG - Cornish Metals Inc. - AUDITED FINANCIAL STATEMENTS ENDED DEC 31, 2023
21/03/2024 07:00
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RNS Number : 6822H Cornish Metals Inc. 21 March 2024
CORNISH METALS RELEASES AUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S
DISCUSSION AND ANALYSIS FOR THE PERIOD ENDED DECEMBER 31, 2023
Vancouver, March 21, 2024
Cornish Metals Inc. (AIM/TSX-V: CUSN) ("Cornish Metals" or the "Company"), a
mineral exploration and development company focused on advancing the South
Crofty tin project ("South Crofty" or the "Project"), located in Cornwall,
United Kingdom, to a construction decision, is pleased to announce that it has
released its annual audited financial statements and management's discussion
and analysis ("MD&A") for the period ended December 31, 2023. The reports
are available under the Company's profile on SEDAR+ (www.sedarplus.ca
(http://www.sedarplus.ca) ) and on the Company's website
(www.cornishmetals.com (http://www.cornishmetals.com/) ).
Highlights for the period ended December 31, 2023 and for the period ending
March 20, 2024
(All figures expressed in Canadian dollars unless otherwise stated)
· Refurbishment of New Cook's Kitchen ("NCK") shaft has commenced ahead
of schedule:
o Rephasing shaft refurbishment will improve the functionality of NCK shaft
and enable larger equipment to access the mine at an earlier stage in its
re-development (news release dated March 3, 2024
(https://cornishmetals.com/site/assets/files/5657/2024-03-03_shaft_refurb.pdf)
).
· Commissioning of the Water Treatment Plant ("WTP") completed at the
end of October 2023:
o Discharge of treated water to the Red River commenced in early November
2023 in accordance with permitted standards;
o Dewatering of the mine progressed well with water levels drawing down as
expected. The rate of dewatering has been reduced to allow shaft refurbishment
and dewatering to proceed concurrently (news releases dated January 17, 2024
(https://cornishmetals.com/site/assets/files/5654/2024-01-17_shu.pdf) and
March 3, 2024
(https://cornishmetals.com/news/2024/cornish-metals-to-bring-forward-refurbishment-of-new-cooks-kitchen-shaft/)
).
· Updated Mineral Resource Estimate ("MRE") for South Crofty mine
released in September 2023:
o 31.6% increase to contained tin in the Indicated Mineral Resource category
for the Lower Mine (news release dated September 13, 2023
(https://cornishmetals.com/site/assets/files/5612/2023-09-13_mre_final.pdf) );
· Drill programme to collect samples for metallurgical testwork as part
of the South Crofty Feasibility Study completed in June 2023:
o Visible tin mineralisation confirmed in all 28 drill holes with assay
results reported (news release dated July 3, 2023
(https://cornishmetals.com/site/assets/files/5597/2023-07-03_drill_results_final.pdf)
);
o Ore sorting testwork completed with excellent results from X-Ray
Transmission ("XRT") confirming the potential to materially reduce tonnes
milled, and reduce process plant capital and operating costs (news release
dated October 8, 2023
(https://cornishmetals.com/site/assets/files/5629/2023-10-08_sc_project_update_ore_sorting_results.pdf)
);
· Drill programme started at the Wide Formation target in the Carn Brea
exploration area (news release dated September 19, 2023
(https://cornishmetals.com/site/assets/files/5613/2023-09-19_wf_drilling_final.pdf)
):
o Drill results from the first six holes confirm the Wide Formation
structure over a 1.6km strike length;
o A new mineralised structure has been identified lying directly beneath the
Great Flat Lode and several high-grade, steeply dipping tin zones (news
release dated February 4, 2024
(https://cornishmetals.com/site/assets/files/5655/2024-02-04_wide_formation_update.pdf)
).
· Shaft re-access work completed in readiness for commencement of
refurbishment of NCK shaft:
o South headframe above NCK shaft remediated with installation of new sheave
wheel;
o New temporary egress headframe arrangement installed inside the existing
north headframe;
o South winder building refurbished with new exterior cladding and
associated civil works for accommodating new winding apparatus;
o Main and auxiliary drum winders installed and commissioned.
· Work on the Feasibility Study continues and is well underway:
o Preliminary Economic Assessment ("PEA") expected to be published in Q2
2024 to provide interim guidance ahead of the publication of the Feasibility
Study (news release dated January 17, 2024
(https://cornishmetals.com/site/assets/files/5654/2024-01-17_shu.pdf) ).
· Fifteen-month power supply contract agreed for the provision of 100%
renewably generated power thereby providing certainty over power costs during
the mine dewatering phase (news release dated July 18, 2023
(https://cornishmetals.com/site/assets/files/5601/2023-07-18_2nd_pump_and_power.pdf)
);
· Cornish Metals Chief Executive Officer ("CEO"), Richard Williams,
will depart the Company effective on March 31, 2024, when he will also leave
the Company's Board (news release dated March 15, 2024
(https://cornishmetals.com/news/2024/cornish-metals-announces-change-in-executive-management/)
):
o Mr. Williams will remain available to the Company on a consulting basis
going forward;
o Ken Armstrong, a non-executive director, will be appointed as Interim CEO
and Patrick Anderson, Chairman of the Board, will become the Executive
Chairman of the Company during the transition.
· Samantha Hoe-Richardson joined the Board as independent non-executive
director effective January 8, 2024 (news release dated January 8, 2024
(https://cornishmetals.com/site/assets/files/5644/2024-01-08_shr_appointment.pdf)
).
Patrick F. N. Anderson, Executive Chairman of Cornish Metals, stated, "The
Cornish Metals team made excellent progress in 2023, achieving several
important milestones, in particular, the construction and commissioning of the
water treatment plant, further de-risking South Crofty and advancing the
project closer towards a construction decision. On behalf of the Board of
Directors I want to thank Richard for the many achievements he made and
obstacles overcome to bring the Company and the South Crofty Project to where
it is today.
2024 is shaping up to be another busy year for the Company with mine
dewatering and the refurbishment of NCK shaft progressing to deeper levels of
the mine. The South Crofty PEA is nearing completion and we look forward to
reporting the updated mine plan and project economics in Q2 this year. We are
also excited by the ongoing Wide Formation drilling programme, with results to
date confirming our model that this represents a new, large-scale, tin-bearing
exploration target lying beneath the historically mined Great Flat Lode,
demonstrating the exploration upside of this area, which we view as having
substantial potential to add to our current Mineral Resource base at South
Crofty.
We appreciate the continued support of our shareholders, the local community
and other stakeholders."
Review of activities
Updated Mineral Resource Estimate released for South Crofty Mine
An updated MRE for South Crofty Mine, prepared in accordance with the
requirements of the JORC Code (2012 Edition), was released on September 13,
2023 ("Updated MRE"). This updates and supersedes the MRE published on June 9,
2021 ("2021 MRE").
Since the 2021 MRE, the Company's geological team has continued to digitize
and incorporate historic assay data into the Mineral Resource model for the
Lower Mine. Furthermore, confirmation of existing structures at depth through
the recent metallurgical drilling programme (as described below) has been
incorporated into the Updated MRE.
The Updated MRE for the Lower Mine area of South Crofty Mine reports a:
· 39.0% increase in tonnes and a 31.6% increase in contained tin in the
Indicated Mineral Resource category from the 2021 MRE; and
· 35.6% increase in tonnes and 15.5% increase in contained tin in the
Inferred Mineral Resource category from the 2021 MRE.
The Updated MRE for the tin-only Lower Mine is summarized below:
Summary of South Crofty Lower Mine Area Mineral Resource Estimate at 0.6% Sn
Cut-Off Grade (September 6, 2023)
Classification Mass Grade Contained Tin (t) Increase to Contained Tin from 2021 MRE (t /
%)
(kt) (% Sn)
Indicated 2,896 1.50 43,573 10,475 / 31.6%
Inferred 2,626 1.42 37,422 5,026 / 15.5%
The Mineral Resource Estimate for South Crofty is available in a report titled
"South Crofty Tin Project - Mineral Resource Update NI 43-101 Technical Report
(https://cornishmetals.com/site/assets/files/5449/south_crofty_tin_project_mineral_resource_update_ni_43-101_technical_report_sedarb.pdf)
", dated October 27, 2023, co-authored by Mr. N. Szebor (MCSM, MSc, BSc,
CGeol, EurGeol, FGS) and Mr. R. Chesher (FAusIMM(CP), RPEQ, MTMS) of AMC
Consultants, and can be accessed through the above link and on the Company's
SEDAR+ page.
The majority of new Mineral Resources are contained within the central part of
the mine in No. 1, No. 2, No. 3, Main, Intermediate, North and Great Lodes
following digitization and modelling of historic data.
The Updated MRE for the Lower Mine area is reported using a 0.6% tin cut-off
grade, the same cut-off grade applied in the MREs prepared in 2016 and 2021.
The Updated MRE was prepared by the Company's geological team and
independently reviewed and verified by AMC Consultants (UK) Ltd.
The Lower Mine area contains tin mineralisation within quartz-tourmaline vein
or "lode" structures, which are hosted entirely within granitic rocks. The
major lode structures that comprise the Updated MRE remain open along strike
and to depth.
Mineral Resources for the Upper Mine area of the South Crofty Updated MRE were
reported accounting for a recalculation of tin equivalent grades due to
changes in metal prices since the 2021 MRE was published (refer news release
dated September 13, 2023
(https://cornishmetals.com/site/assets/files/5612/2023-09-13_mre_final.pdf) ).
Mineral Resources which are not Mineral Reserves do not have demonstrated
economic viability. The estimate of Mineral Resources may be materially
affected by environmental, permitting, legal, title, taxation,
socio-political, marketing or other relevant issues.
The Updated MRE will be incorporated into the mine plan to be included in the
Feasibility Study as described below.
Commissioning of water treatment plant at South Crofty and commencement of
dewatering
The construction of the WTP at South Crofty involved various enabling works,
including completion of the treated water discharge duct from the WTP, various
roadways and the concrete foundation pad for the WTP itself. Pipelines
carrying water from the submersible pumps in NCK shaft to the WTP were also
laid along with electrical and communication systems.
The WTP comprises nine reaction tanks for altering the chemical properties to
precipitate the various metals out of solution, and six inclined plate
settling tanks (lamella clarifiers) to remove the precipitated solids. At the
back end of the WTP, a sludge storage and thickening system has been
installed, consisting of storage tanks for unthickened and thickened sludge
and a deep cone thickener to thicken the sludge.
At the mine end is a building housing the high voltage power
supply/sub-station and the variable speed drives ("VSDs") required to operate
the pumps. A new power supply contract (refer below) provides the 11kV power
supply needed. At the WTP end, a large motor control centre and automation
system was installed in a new building, which National Grid connected to their
network with another new substation.
A hydro-turbine has been added ahead of the discharge point that is generating
up to 20% of the electricity required to operate the WTP. Other renewable
energy opportunities are also being explored.
Wet commissioning of the WTP was completed during September and October 2023.
After successful commissioning, the WTP was officially opened on October 26,
2023, with discharge of treated water to the Red River commencing in early
November 2023. The treated water exceeds the Company's permitted standards set
by the Environment Agency for its discharge into the Red River. Dewatering of
the mine progressed well with the water level drawing down as expected. With
the commencement of refurbishment of NCK shaft (as more fully described
below), the rate of mine dewatering has been reduced, with the water level
being maintained, to allow shaft refurbishment and dewatering to proceed
concurrently. Mine dewatering and shaft refurbishment are expected to be
complete by September 2025.
Installation of submersible pumps and commissioning of variable speed drives
Two submersible pumps manufactured by KSB in Germany have been installed in
NCK shaft for the first stage of the two-stage mine dewatering programme. The
pumps are specialist high head, vertical pumps that are controlled by VSDs to
enable the 25,000m(3)/day pumping rate to the WTP to be maintained as the
water level drops and the pumping head increases. The VSDs were manufactured
by Schneider Electric and supplied by Siemag Tecberg UK.
The pumps were installed in NCK shaft in mid-2023. Commissioning teams from
Siemag Tecberg UK and Schneider Electric were on-site for testing the pumps
and VSDs that were successfully commissioned and ran through a series of
performance tests to demonstrate their ability to meet the target flow rate to
the WTP.
The pumps were initially lowered to approximately 360 metres below surface and
suspended from 120 three-metre-long pipes that form the temporary rising main.
When the water level reaches the level at approximately 360 metres below
surface, a permanent set of pumps will be installed at that level. The
submersible pumps will then be lowered to approximately 730 metres below
surface for the second stage of dewatering.
Since the commencement of the dewatering of the South Crofty mine (refer
above), the pumps have been pumping mine water from approximately 360 metres
below surface to the WTP from where the treated mine water is discharged to
the Red River.
Execution of power supply contract for South Crofty
In July 2023, South Crofty entered into a 15-month supply contract with NPower
for the provision of 100% renewably generated power. The supply contract
allows South Crofty to advance through the mine dewatering phase with
certainty over the power costs for the next 15 months. This added certainty is
an important financial consideration given the power price volatility seen
over the last two years.
Preparation for re-accessing New Cook's Kitchen shaft
Two single drum winders were ordered for the shaft re-access work, with the
primary access winder supplied by Siemag Tecberg UK and an emergency egress
winder provided by Zitrón S.A. These winders will enable NCK shaft to be
re-accessed once dewatering activities have sufficiently progressed. Both
winders arrived on site by the beginning of November 2023 and have been
installed and commissioned in December 2023 and January 2024, respectively.
The south headframe sitting above NCK shaft has been remediated and
strengthened as required. New sheave wheels and associated apparatus have been
ordered to replace the originals which were beyond economic repair. The South
Winder house, housing the primary access winder, has been remediated with its
structural steelwork checked and refurbished, and new exterior cladding
erected. The secondary egress winder has been housed in a new temporary
winding house which was erected in October 2023.
Pump and pipe handling infrastructure has also been installed around the
headframe to facilitate the lowering of the pumps and pipes and subsequent
dewatering activities.
Refurbishment of New Cook's Kitchen Shaft
After assessment of the condition of the timbers in NCK shaft, refurbishment
of the shaft has commenced ahead of schedule (refer news release dated March
3, 2024). Rephasing shaft refurbishment will improve the functionality of NCK
shaft, enable larger equipment to access the mine at an earlier stage in its
re-development and ensure that high health and safety standards are applied as
the underground mine workings are accessed.
As stated above, shaft refurbishment and mine dewatering will proceed
concurrently and are expected to be complete by September 2025. The
rephasing of shaft refurbishment is expected to have no impact on the overall
South Crofty project development timeline and there is no anticipated impact
on the overall cost of re-opening South Crofty arising from this rephasing.
Metallurgical study drill programme at South Crofty
A metallurgical drill programme as part of the Feasibility Study was completed
between July 2022 and June 2023. The programme was designed to collect samples
for various metallurgical studies, including XRT ore sorting, flowsheet
optimisation and paste backfill studies. This testwork should allow
acceleration of the Feasibility Study in advance of dewatering the mine and
will provide key information for the mineral processing flowsheet.
The programme comprised 10,312 metres of diamond drilling with three drill
rigs contracted from Priority Drilling Limited, under the supervision of the
Company's geological team.
Samples were collected from the North Pool Zone (eastern section of Mineral
Resource), the No. 4 and No. 8 Lodes (central part of the Mineral Resource),
Roskear and Dolcoath South (western part of the Mineral Resource). These five
main lodes / mineralised zones contain the majority of the mineralised
material anticipated to be processed during the first six years of the
proposed mine life.
The metallurgical drill programme comprised 14 parent and daughter drill holes
targeting No. 4 and No. 8 Lodes, and 14 parent and daughter holes targeting
the Roskear Lode. Visible tin mineralisation was observed in all 28 drill
holes. Three holes from each Lode were assayed for base metals and associated
elements and the rest of the drill intercepts were used for metallurgical
studies. The assay results were reported in the news release dated July 3,
2023.
Four parent and 29 daughter holes targeting the North Pool Zone and the
Dolcoath South Lode, respectively, were also completed.
Metallurgical testwork results
The metallurgical testwork was conducted on samples from the metallurgical
drill programme (as more fully described above) across five mineralised zones
(North Pool Zone, No. 4 and No. 8 Lodes, Roskear and Dolcoath South),
representing the majority of the potential production areas in the first six
years of the proposed mine life.
XRT ore sorter testwork of bulk composite samples was completed by TOMRA
Sorting GmbH. Heavy Liquid Separation ("HLS") testwork of bulk composite
samples was completed by Wardell Armstrong International.
Both XRT ore sorting and HLS pre-concentration testwork yielded excellent
results:
· XRT: 55% mass rejection with less than 3% metal loss (-50mm to
+15mm size fraction); and
· HLS: 50% mass rejection with less than 5% metal loss (-15mm to
+0.85mm size fraction).
The metallurgical testwork results confirm the potential to materially reduce
tonnes milled and reduce process plant capital and operating costs as well as
the associated environmental footprint. The testwork results are being
incorporated in the Feasibility Study as described below.
Preparation of Feasibility Study
Good progress is being made in advancing the South Crofty Feasibility Study
with a substantial amount of the study completed. All study components, with
the exception of infill drilling, are expected to be finalised by the end of
June 2024.
The Feasibility Study continues to progress, or has completed, the following
activities:
· Geotechnical testwork - televiewer investigations and geotechnical
rock testing completed on the primary mining areas by RobertsonGeo to confirm
known historical structural and rock mass property data;
· Headframe structural modelling and refurbishment completed by IMEC
and Entech Mining / RSV Group;
· Concept numerical modelling of the proposed underground mining
methods and stope designs completed by MiningOne;
· Phase 1 of the metallurgical testwork programme completed by Wardell
Armstrong (mineralogy, physical competency, characterisation XRT, heavy liquid
separation and gravity response testwork). Phase 2 of the testwork programme
(flowsheet development) is progressing well;
· Ground investigations for the new mineral processing plant completed
by AGS Ground Solutions;
· Mineral processing plant design and layout in advanced stages by
Fairport Engineering, incorporating the results of the metallurgical testwork
programme and potential future throughput expansions;
· Underground mine design and optimisation completed using the
September 2023 South Crofty updated MRE;
· Concept mine ventilation study, underground infrastructure design and
hoisting analysis completed;
· Concept engineering on paste backfill options and sighter testwork
completed by Paterson & Cooke (UK);
· Feasibility Study level engineering design for the paste backfill
plant is underway;
· Hydrogeology (Piteau Associates), environmental, social, closure (SLR
Consulting) and market studies (Project Blue and CRU Group) completed; and
· AMC Consultants (UK) has been commissioned to review and provide
overall Feasibility Study sign-off.
Exploration drill programme at Carn Brea South
A 9,000-metre exploration drill programme commenced at the Wide Formation
target in the Carn Brea South exploration area. The drill programme is
designed to test the geometry and the continuity of tin mineralisation within
the recently discovered Wide Formation target (refer news release dated
January 10, 2023).
The mineralisation style in the Wide Formation, comprising pervasive
tourmaline and quartz (termed 'blue peach'), is similar in character to that
associated with No. 8 Lode, one of the most prolific tin producing lodes in
the latter years of operation of the South Crofty mine. The drill programme is
testing an area measuring 2,500 metres along strike (northeast to southwest)
and 500 metres downdip (north to south).
Drill results from the first six holes (refer news release dated February 4,
2024) confirm the Wide Formation structure over a 1.6km strike length, a
downdip extent of at least 525 metres and thicknesses ranging from 1.8 metres
- 4.8 metres. The structure remains open. Notable tin intercepts from the Wide
Formation include 1.21 metres grading 0.87% Sn in CB23_004.
Drilling also identified a new mineralised structure lying directly beneath
the Great Flat Lode Splay, and several high-grade, steeply dipping tin zones
between the Great Flat Lode and the Wide Formation. Notable tin intercepts
from the newly identified Great Flat Lode Splay include 3.38 metres grading
1.01% Sn in CB23_002.
Notable tin intercepts from multiple steeply-dipping, high-grade tin zones
mainly intersected between the Great Flat Lode and the Wide Formation
including 3.09 metres grading 1.21% Sn in CB23_001.
To date, nine drill holes (totalling approximately 6,119 metres) have been
completed.
Departure of CEO, Richard Williams
On March 15, 2024, the Company announced the departure of CEO, Richard
Williams, effective on March 31, 2024, when he will also leave the Company's
Board. Mr. Williams will remain available to the Company on a consulting basis
going forward. Ken Armstrong, a non-executive director, will be appointed as
Interim CEO and Patrick Anderson, Chairman of the Board, will become the
Executive Chairman of the Company during the transition and search for a
permanent CEO to lead the Company through the next stage of development of
South Crofty as the Company moves towards construction.
Appointment of Samantha Hoe-Richardson as independent non-executive director
On January 8, 2024, the Company announced that Samantha Hoe-Richardson joined
the Board of Directors as an independent non-executive director (refer news
release dated January 8, 2024). Ms. Hoe-Richardson is an experienced
non-executive director from a global mining, infrastructure and insurance
background. She is currently a non-executive director of Kew Soda Ltd, Assured
Guaranty UK Ltd, Ascot Underwriting Limited, 3i Infrastructure plc and an
independent advisor on climate change & sustainability to Laing O'Rourke.
Ms. Hoe-Richardson was Head of Environment & Sustainable Development at
Network Rail until 2017 and prior to that spent 16 years at Anglo American
plc, latterly as Head of Environment. She previously worked in investment
banking and audit. Ms. Hoe-Richardson holds a Masters Degree in nuclear and
electrical engineering from the University of Cambridge, and is also a
non-practicing Chartered Accountant.
Financial highlights for the period ended December 31, 2023 and the year ended
January 31, 2023
Eleven months ended
December 31, 2023 Year ended
January 31, 2023
(Expressed in Canadian dollars)
Total operating expenses 4,859,889 3,448,124
Loss before income taxes 2,887,255 1,202,257
Loss for the period 2,714,155 1,218,257
Net cash (used in) operating activities (2,732,773) (3,607,008)
Net cash (used in) investing activities (28,164,958) (10,318,376)
Net cash (used in) provided by financing activities (32,082) 61,657,081
Cash at end of the financial period 25,791,552 55,495,232
· Increase in operating costs impacted by higher insurance costs
attributable to more site-based activities primarily relating to the
construction of the WTP, related dewatering and NCK shaft re-access work;
· Interest income of $1.7 million benefitted from increased interest
rates being received on higher cash balance following the Offering;
· Cash refund received of $168,112 relating to research and development
tax credit arising from South Crofty drill programme completed in 2020, with
further applications underway for subsequent activities;
· Expenditure of $14.8 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;
· Dewatering costs of $1.3 million incurred since October 2023 for
power, reagents, sludge disposal and maintenance of the WTP;
· Other project related costs of $10.6 million incurred during the
period relating to the advancement of South Crofty to a potential construction
decision, primarily for the metallurgical drill programme, the feasibility
study and planning activities for dewatering and NCK shaft re-access;
· Costs of $1.2 million incurred for the continuation of the
exploration programme at Carn Brea which re-commenced in June 2023; and
· Recognition of foreign currency translation gain of $2.0 million for
those assets located in the UK when translated into Canadian dollars for
presentational purposes.
The Company changed its financial year end from January 31 to December 31 to
better align the Company's financial reporting periods to that of its peer
group in the mineral resources sector. In addition, the calendar year end
coincides with traditional financial, taxation and operational cycles. The
change in year end takes effect from December 31, 2023 with the result that
the current period of reporting is the eleven months ended December 31,
2023. The comparative period of reporting is the twelve months ended January
31, 2023.
Outlook
As described above, the Company is advancing the South Crofty tin project to a
potential construction decision. The Company's objectives are as follows:
· Dewater South Crofty mine and refurbish NCK shaft by September 2025;
· Publish a PEA for South Crofty in the second quarter of 2024;
· Complete a Feasibility Study with the outcome of the PEA providing
guidance for the timing for the completion of the Feasibility Study and
outstanding work programmes;
· All study components of the ongoing Feasibility Study, with the
exception of infill drilling, expected to be completed by the end of June
2024;
· Complete the 14-hole / 9,000 metre Wide Formation exploration drill
programme, and
· Commence basic and detailed engineering studies, construction of the
processing plant, refurbishment of underground facilities and other on-site
early works.
The follow-up exploration drill programme at the Wide Formation target at Carn
Brea South will also continue subject to the receipt of satisfactory drill
results.
Subject to the availability of financing, consideration will also be given to
continuing with the Company's exploration programme at United Downs and
evaluating other high potential, exploration targets within transport distance
of the planned processing plant site at South Crofty.
The Company continues to target first tin production from South Crofty mine by
the end of 2026, subject to securing project financing.
ABOUT CORNISH METALS
Cornish Metals is a dual-listed company (AIM and TSX-V: CUSN) focused on
advancing the South Crofty high-grade, underground tin Project through to a
construction decision, as well as exploring its additional mineral rights, all
located in Cornwall, United Kingdom.
· South Crofty is a historical, high-grade, underground tin mine that
started production in 1592 and continued operating until 1998 following over
400 years of continuous production;
· The Project possesses Planning Permission for underground mining
(valid to 2071), to construct new processing facilities and all necessary site
infrastructure, and an Environmental Permit to dewater the mine;
· South Crofty has the 4(th) highest grade tin Mineral Resource
globally and benefits from existing mine infrastructure including multiple
shafts that can be used for future operations;
· Tin is a Critical Mineral as defined by the UK, USA, and Canadian
governments, with approximately two-thirds of the tin mined today coming from
China, Myanmar and Indonesia;
· There is no primary tin production in Europe or North America;
· Tin connects almost all electronic and electrical infrastructure,
making it critical to the energy transition - responsible sourcing of critical
minerals and security of supply are key factors in the energy transition and
technology growth;
· South Crofty benefits from strong local community and regional and
national government support.
· Cornish Metals has a growing team of skilled people, local to
Cornwall, and the Project could generate 250 - 300 direct jobs.
TECHNICAL INFORMATION
The technical information in this news release has been compiled by Mr. Owen
Mihalop who 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.
ON BEHALF OF THE BOARD OF DIRECTORS
"Patrick F. N. Anderson"
Patrick F. N. Anderson
For additional information please contact:
Cornish Metals Fawzi Hanano investors@cornishmetals.com (mailto:investors@cornishmetals.com)
Irene Dorsman info@cornishmetals.com (mailto:info@cornishmetals.com)
Tel: +1 (604) 200 6664
SP Angel Corporate Finance LLP Richard Morrison Tel: +44 203 470 0470
(Nominated Adviser & Joint Broker) Charlie Bouverat
Grant Barker
Cavendish Capital Markets Limited Derrick Lee Tel: +44 131 220 6939
(Joint Broker) Neil McDonald
Leif Powis Tel: +44 207 220 0500
Hannam & Partners Matthew Hasson cornish@hannam.partners (mailto:cornish@hannam.partners)
(Financial Adviser) Andrew Chubb Tel: +44 207 907 8500
Jay Ashfield
BlytheRay Tim Blythe tim.blythe@blytheray.com (mailto:tim.blythe@blytheray.com)
(Financial PR) Megan Ray megan.ray@blytheray.com (mailto:megan.ray@blytheray.com)
Tel: +44 207 138 3204
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 certain "forward-looking information" and
"forward-looking statements" (collectively, "forward-looking statements").
Forward-looking statements include predictions, projections, outlook,
guidance, estimates and forecasts and other statements regarding future plans,
the realisation, cost, timing and extent of mineral resource or mineral
reserve estimates, estimation of commodity prices, currency exchange rate
fluctuations, estimated future exploration expenditures, costs and timing of
the development of new deposits, success of exploration activities, permitting
time lines, requirements for additional capital and the Company's ability to
obtain financing when required and on terms acceptable to the Company, future
or estimated mine life and other activities or achievements of Cornish Metals,
including but not limited to: mineralisation at South Crofty, mine dewatering
expectations, Cornish Metals' exploration drilling programme, exploration
potential and project growth opportunities for the South Crofty tin project
and other Cornwall mineral properties and the timing thereof, timing and
results of Cornish Metals' feasibility study, the Company's ability to
evaluate and develop the South Crofty tin project and other Cornwall mineral
properties, strategic vision of Cornish Metals and expectations regarding the
South Crofty mine, timing and results of projects mentioned. Forward-looking
statements are often, but not always, identified by the use of words such as
"seek", "anticipate", "believe", "plan", "estimate", "forecast", "expect",
"potential", "project", "target", "schedule", "budget" and "intend" and
statements that an event or result "may", "will", "should", "could", "would"
or "might" occur or be achieved and other similar expressions and includes the
negatives thereof. All statements other than statements of historical fact
included in this news release, are forward-looking statements that involve
various risks and uncertainties and there can be no assurance that such
statements will prove to be accurate and actual results and future events
could differ materially from those anticipated in such statements.
Forward-looking statements 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 availability of
financing; the timing and content of upcoming work programmes; actual results
of proposed exploration activities; possible variations in Mineral Resources
or grade; outcome of the current Feasibility Study; projected dates to
commence mining operations; 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. The list is not exhaustive of the factors that may
affect Cornish's forward-looking statements.
Cornish Metals' forward-looking statements are based on the opinions and
estimates of management and reflect their current expectations regarding
future events and operating performance and speak only as of the date such
statements are made. Although the Company has attempted to identify important
factors that could cause actual actions, events or results to differ from
those described in forward- looking statements, there may be other factors
that cause such actions, events or results to differ materially from those
anticipated. There can be no assurance that forward-looking statements will
prove to be accurate and accordingly readers are cautioned not to place undue
reliance on forward-looking statements. Accordingly, readers should not place
undue reliance on forward-looking statements. Cornish Metals does not assume
any obligation to update forward-looking statements if circumstances or
management's beliefs, expectations or opinions should change other than as
required by applicable 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 STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian dollars)
As at As at
December 31, 2023 January 31, 2023
ASSETS
Current
Cash $25,791,552 $55,495,232
Marketable securities 2,665,454 2,718,936
Receivables 1,112,638 656,407
Prepaid expenses 591,264 371,977
Deferred financing fees 135,242 -
30,296,150 59,242,552
Deposits 85,954 54,165
Property, plant and equipment 23,788,325 9,721,352
Exploration and evaluation assets 50,050,323 33,088,129
$104,220,752 $102,106,198
LIABILITIES
Current
Accounts payable and accrued liabilities $ 5,063,940 $ 2,494,642
Lease liability - 642
5,063,940 2,495,284
NSR liability 9,064,817 9,149,804
14,128,757 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 711,690 384,758
Foreign currency translation reserve 1,369,146 (648,962)
Deficit (42,391,158) (39,677,003)
90,091,995 90,461,110
$104,220,752 $102,106,198
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
For the eleven month period ended December 31, 2023 and year ended January 31,
2023
(Expressed in Canadian dollars)
December 31, 2023 January 31, 2023
EXPENSES
Travel and marketing $634,145 $515,166
Depreciation - 443
Insurance 633,287 145,462
Office, miscellaneous and rent 175,164 102,540
Professional fees 1,048,676 744,585
Generative exploration costs 25,680 122,797
Regulatory and filing fees 86,760 164,798
Share-based compensation 205,026 -
Salaries, directors' fees and benefits 2,051,151 1,652,333
Total operating expenses (4,859,889) (3,448,124)
Interest income 1,695,837 417,136
Foreign exchange gain 394,621 758,216
Loss on the disposal of property, plant and equipment (921) -
Gain on the disposal of royalty - 318,147
Unrealized gain (loss) on marketable securities (116,903) 752,368
Loss before income taxes (2,887,255) (1,202,257)
Income tax recovery (expense) 173,100 (16,000)
Loss for the period (2,714,155) (1,218,257)
Foreign currency translation 2,018,108 (474,839)
Total comprehensive loss for the period $ (696,047) $(1,693,096)
Basic and diluted loss per share $ (0.00) $ (0.00)
Weighted average number of common shares outstanding: 535,269,215 456,262,207
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the eleven month period ended December 31, 2023 and year ended January 31,
2023
(Expressed in Canadian dollars)
December 31, 2023 January 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (2,714,155) $ (1,218,257)
Items not involving cash:
Depreciation - 443
Share-based compensation 205,026 -
Loss on the disposal of property, plant and equipment 921 -
Gain on the disposal of royalty - (318,147)
Unrealized loss (gain) on marketable securities 116,903 (752,368)
Foreign exchange gain (394,621) (758,217)
Income tax expense (recovery) (173,100) 16,000
Income taxes received during the period 157,100 -
Changes in non-cash working capital items:
Increase in receivables (456,230) (549,177)
Increase in prepaid expenses (204,107) (96,025)
Increase in accounts payable and accrued liabilities 729,490 68,740
Net cash used in operating activities (2,732,773) (3,607,008)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (14,192,068) (2,729,942)
Acquisition of exploration and evaluation assets (13,942,740) (7,576,717)
Increase in deposits (30,150) (11,717)
Net cash used in investing activities (28,164,958) (10,318,376)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the Offering - 65,135,746
Proceeds from option and warrant exercises - 411,222
Proceeds from the warrant exercises received in advance of share issue - 17,500
Share issue costs - (3,966,075)
Proceeds from the disposal of royalty - 63,147
Increase in deferred financing fees (31,359) -
Lease payments (723) (4,459)
Net cash provided by (used in) financing activities (32,082) 61,657,081
Change in cash during the period (30,929,813) 47,731,697
Cash, beginning of the period 55,495,232 6,922,704
Impact of foreign exchange on cash 1,226,133 840,831
Cash, end of the period $ 25,791,552 $ 55,495,232
Cash paid during the period for interest $- $-
Cash paid during the period for income taxes $11,012 $-
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
For the eleven month period ended December 31, 2023 and year ended January 31,
2023
(Expressed in Canadian dollars)
Share Foreign
Capital stock subscriptions Share-based currency
Number of received in Capital payment translation Shareholders'
shares Amount advance contribution reserve reserve Deficit equity - total
Balance at January 31, 2022 285,850,157 $56,846,350 $ - $2,007,665 $630,265 $(174,123) $(38,599,036) $20,711,121
Share issuance pursuant to the Offering 225,000,000 65,135,746 - - - - - 65,135,746
Share issue costs - (3,966,075) - - - - - (3,966,075)
Warrant exercises 3,272,222 291,222 - - - - - 291,222
Warrant exercises received in - - 17,500 - - - - 17,500
advance
Option exercises 600,000 225,217 - - (105,217) - - 120,000
Expiry of options - - - - (140,290) - 140,290 -
Shares issued pursuant to property option agreement 20,298,333 9,844,692 - - - - - 9,844,692
Foreign currency translation - - - - - (474,839) (474,839)
Loss for the period - - - - - - (1,218,257) (1,218,257)
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
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 exercises 250,000 17,500 (17,500) - - - - -
Foreign currency translation - - - - - 2,018,108 2,018,108
Share-based compensation - - - - 326,932 - - 326,932
Loss for the period - - - - - - (2,714,155) (2,714,155)
Balance at December 31, 2023 535,270,712 $128,394,652 $- $2,007,665 $711,690 $1,369,146 $(42,391,158) $90,091,995
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