REG - Cornish Metals Inc. - AUDITED FINANCIAL STATEMENTS ENDED JAN 31, 2023
27/04/2023 07:15
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RNS Number : 6699X Cornish Metals Inc. 27 April 2023
CORNISH METALS RELEASES AUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S
DISCUSSION AND ANALYSIS FOR THE YEAR ENDED JANUARY 31, 2023
Vancouver, April 26, 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
annual audited financial statements and management, discussion and analysis
("MD&A") for the year ended January 31, 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 year ended January 31, 2023 and for the period ending April
26, 2023
(All figures expressed in Canadian dollars unless otherwise stated)
· Completion of 10,159 meters of drilling at the United Downs exploration
project with assay results from the program confirming management's belief in
the potential to develop a Mineral Resource in the United Downs project area,
subject to the availability of further funding;
· Four main targets were drill-tested: UD Lode, United Mines, Mount
Wellington and Trenares Lode, with all four targets returning results
warranting further follow-up drilling (news releases dated July 5, 2021
(https://cornishmetals.com/site/assets/files/5440/2021-07-05_ud_1st_drill_results_wire.pdf)
, August 30, 2021
(https://cornishmetals.com/site/assets/files/5454/2021-08-31_ud_drilling_release.pdf)
, November 3, 2021
(https://cornishmetals.com/site/assets/files/5467/2021-11-02_galena_closing_wire.pdf)
, December 6, 2021
(https://cornishmetals.com/site/assets/files/5472/2021-12-07_ud_assays_dec.pdf)
, June 29, 2022
(https://cornishmetals.com/site/assets/files/5518/2022-06-29_trenares_drilling.pdf)
and August 23, 2022
(https://cornishmetals.com/site/assets/files/5521/2022-08-23_mt_wellington.pdf)
);
· Discovery of the Wide Formation during the exploration program at
Carn Brea with a follow-up drill programme required to determine the
continuity of mineralization and to define the geometry and extent of the
target, subject to the availability of exploration funding (news release dated
January 10, 2023
(https://cornishmetals.com/news/2023/cornish-metals-makes-new-discovery-and-reports-other-high-grade-tin-intercepts-from-the-south-crofty-project/)
);
· Completion of financing for gross proceeds of £40.5 million ($65.1
million based on closest available exchange rate), including a strategic
investment by Vision Blue Resources Limited ("VBR") of £25.0 million ($40.1
million), to advance the South Crofty tin project ("South Crofty") to a
construction decision (news releases dated March 27, 2022
(https://www.cornishmetals.com/news/2022/cornish-metals-to-raise-up-to-40.5-million-through-a-25-million-strategic-investment-by-sir-mick-davis-vision-blue-resources/)
and May 23, 2022
(https://www.cornishmetals.com/news/2022/cornish-metals-successfully-closes-40.5-million-financing/)
);
· Issuance of a second tranche of common shares pursuant to the
restructuring of the deferred consideration relating to the acquisition of the
South Crofty tin project and associated mineral rights in Cornwall (news
release dated May 29, 2022
(https://www.cornishmetals.com/news/2022/cornish-metals-issues-shares-as-deferred-consideration-for-cornwall-assets/)
);
· Drill program underway at South Crofty to collect samples for
metallurgical testwork as part of the South Crofty Feasibility Study, with
completion of the program expected in early summer 2023 (news release dated
July 10, 2022
(https://cornishmetals.com/site/assets/files/5519/2022-07-10_sc_met_drilling.pdf)
);
· Key positions appointed to the South Crofty project management team,
including Project Manager for the construction and commissioning of the water
treatment plant ("WTP"), Feasibility Study Manager, Project Engineer, Health
& Safety Officer and Human Resources Advisor, with additional employees
appointed to the mining team to support greater mining related activities
(news releases dated November 7, 2022
(https://cornishmetals.com/site/assets/files/5548/2022-11-07_project_update.pdf)
and March 5, 2023
(https://cornishmetals.com/site/assets/files/5577/2023-03-05_shu.pdf) );
· Construction of the WTP is nearing completion including the
installation of the treated water discharge duct, concrete foundation pad,
tanks and clarifiers, structural steel supports and walkways, with the
mechanical, electrical and instrumentation equipment being installed from
April 2023;
· Commissioning of the WTP is planned for the summer of 2023 with a
completion cost estimated to be between £6.5 million and £7.0 million ($10.7
million and $11.5 million at year end exchange rate);
· Pump and pipe handling infrastructure installed in readiness for the
expected lowering of the pumps and pipes into New Cook's Kitchen in May 2023
ahead of the commissioning of the WTP;
· Work on the Feasibility Study continues with completion planned by
the end of 2024; and
· Mr. Tony Trahar nominated by Vision Blue Resources as its
representative on the Company's board of directors (news release dated June 5,
2022
(https://www.cornishmetals.com/news/2022/vision-blue-resources-nominates-mr-tony-trahar-to-cornish-metals-board-of-directors/)
)
Richard Williams, CEO of Cornish Metals, stated, "We are very pleased with the
excellent progress achieved on the advancement of South Crofty in recent
months. The construction of the water treatment plant is nearing completion
and we anticipate its commissioning this summer, followed by commencement of
dewatering the mine.
Similarly, good progress is being on the metallurgical drill programme with
its completion anticipated in early summer. The results of this programme
are feeding into the Feasibility Study which is also progressing well. All
these workstreams should result in a potential construction decision being
taken by the end of 2024.
After completion of the metallurgical drill programme in early summer, we are
considering options for the continuation of the exploration programmes at the
Wide Formation, located along the southern boundary of South Crofty
Underground Permission area and only one kilometre south of the South Crofty's
Tuckingmill Decline, and United Downs, located 8km east of South Crofty, to
demonstrate the Mineral Resource potential of these targets.
We are continuing to actively engage with and receive strong support from the
local community and Cornwall Council."
Review of activities
Results from exploration program at United Downs
The Company commenced its exploration program at United Downs in April 2021.
The drilling activities were contracted to Priority Drilling Limited, under
the supervision of the Company's geological team.
Four targets were drill-tested: UD Lode, United Mines, Mount Wellington and
Trenares Lode. The key points to date arising from this drill program are:
· Multiple zones of copper - tin - silver - zinc mineralization were
intersected;
· High-grade copper - tin mineralization was intersected down dip
beneath the historic United Mines; and
· A transition from high-grade copper to high-grade tin at depth as well
as increasing tin grades with depth has been encountered, similar to the
mineralization transition seen at South Crofty.
Details of the intercepts from the drill program can be found in the press
releases dated July 5, 2021
(https://cornishmetals.com/news/2021/cornish-metals-reports-resultw-from-ongoing-united-downs-drill-programme/)
, August 30, 2021
(https://cornishmetals.com/site/assets/files/5454/2021-08-31_ud_drilling_release.pdf)
, November 3, 2021
(https://cornishmetals.com/site/assets/files/5468/2021-11-03_ud_assays.pdf) ,
December 6, 2021
(https://cornishmetals.com/site/assets/files/5472/2021-12-07_ud_assays_dec.pdf)
, June 29, 2022
(https://cornishmetals.com/site/assets/files/5518/2022-06-29_trenares_drilling.pdf)
and August 23, 2022
(https://cornishmetals.com/site/assets/files/5521/2022-08-23_mt_wellington.pdf)
. In total, 26 holes were drilled at United Downs amounting to 10,159
meters, of which all assay results have been reported in these press releases.
Drilling ceased at the end of May 2022, with the metallurgical study drill
program at South Crofty commencing soon thereafter, as described below.
In summary, results from the United Downs exploration program confirm
management's belief in the potential to develop a Mineral Resource in the
United Downs project area, especially the down dip section of the United Mine
where high-grade copper, tin and silver grades were encountered. The Company
is considering the next steps for advancing the United Downs project.
Results from exploration program at Carn Brea
Outside of the United Downs project area, a further target, Carn Brea, was
also drill tested. Carn Brea is located along the southern boundary of the
South Crofty underground permission area. At Carn Brea, eight holes were
drilled totaling 2,501 meters. The drill holes confirmed up-dip, near-surface,
extensions of the historic Great Flat Lode and discovered tin mineralization
in a new target called the 'Wide Formation', inferred to lie parallel to,
north of, and beneath the Great Flat Lode. The Great Flat Lode was mined
historically over a five kilometer strike length.
Management is of the view that there is merit in further exploring the Wide
Formation as this discovery is immediately adjacent to the South Crofty tin
project. The Company is considering the next steps for continuing the
exploration program on the Wide Formation to better define its geometry
(strike and dip).
Construction progress of water treatment plant at South Crofty
The Company has employed key project management personnel, including a Project
Manager and Project Engineer, for construction and commissioning of the WTP.
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 New Cook's Kitchen shaft to the WTP are
substantially 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. The structural steel supports and
walkways which provide access to the WTP are currently being installed.
The mechanical, electrical and instrumentation equipment is expected to
commence installation by the end of April 2023 along with reagent storage,
make-up and dosing equipment, which are being supplied as complete packages
from specialist manufacturers.
Sand Separation Systems Limited, an industry leader in the treatment of mine
water, have supported the running of a pilot plant to optimise the water
treatment process flowsheet. This workstream has resulted in a reduction in
reagent consumption, an improvement to metal and suspended solids recovery and
an expected reduction in operating costs.
Overall, the current cost estimate for the WTP is expected to be between £6.5
million and £7.0 million, with commissioning planned in summer 2023.
Preference has been given, where feasible, to suppliers located in Cornwall.
Preparation for mine dewatering at South Crofty
The Company has recruited additional employees to its mining team in
anticipation of increased mining related activities during dewatering of the
mine and support for underground drilling. All mine staff are receiving
enhanced training reflecting the increased level of underground activities.
Two mine rescue teams have also been established as part of the mutual aid
scheme operating in the south-west of the UK.
New self-contained self-rescuers have been purchased and commissioned, with a
new underground refuge chamber also having been constructed and commissioned.
New ventilation ducting has been installed in support of the underground
drilling for the metallurgical study drill program, as noted below. WiFi
connections have been installed underground to provide improved communications
with surface.
The two submersible pumps for the mine dewatering purchased in 2018 are being
tested ahead of their lowering into the New Cook's Kitchen shaft. Lowering of
the pumps into New Cook's Kitchen shaft will commence in May 2023. Pump and
pipe handling infrastructure has also been installed around the headframe in
readiness for the lowering of the pumps and pipes.
A new single drum winder has been ordered with delivery expected in October
2023. This winder will enable the New Cook's Kitchen's shaft to be
re-accessed once dewatering activities are underway.
Metallurgical study drill program underway at South Crofty
A drill program as part of the South Crofty Feasibility Study was started in
July 2022. The drill program is anticipated to require approximately between
8,000 and 12,000 meters of drilling.
Three drill rigs have been contracted from Priority Drilling Limited, under
the supervision of the Company's geological team. Two rigs are drilling from
surface and one rig is drilling from underground, collecting samples 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 / mineralized
zones contain the majority of the mineralized material anticipated to be
processed during the first six years of mine life.
All mineralized sample material required from No. 4 Lode, No. 8 Lode, Roskear
and North Pool Zone has been collected and initial metallurgical studies have
commenced. All of the metallurgical studies, except for Dolcoath South, are
expected to be completed by the end of 2023 for inclusion in the Feasibility
Study planned for completion by the end of 2024.
The program is designed to collect samples for various metallurgical studies,
including XRT ore sorting, flowsheet optimisation and paste backfill studies,
as well as collecting assay data to complement the current Mineral Resource
estimate. 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, especially the amenability of the mineralized
zones to ore sorting which, if successful, will present an opportunity to
deliver higher grade feed and reduce the size of the processing plant.
Preparation of Feasibility Study
Work on the Feasibility Study has been underway since June 2022. In addition
to the metallurgical testwork program noted above, the Feasibility Study
continues to advance with the following activities:
· Fairport Engineering has been engaged to design the process plant and
estimate capital and operating costs;
· A geotechnical site investigation for the process plant has been
completed by AGS Ground Solutions;
· MiningOne has been engaged to conduct numerical modelling and ground
control studies for underground mining method and stope designs; and
· Entech Mining has been engaged to provide a study on the
refurbishment, re-equipping and operation of New Cook's Kitchen shaft.
It is planned that the Feasibility Study will be completed by the end of 2024.
Agreement of South Crofty mineral leases
On February 4, 2022, agreement was reached with Sir Ferrers Vyvyan of
Trelowarren in Cornwall to lease certain mineral rights owned by the Vyvyan
family. The mineral lease covers an area of 222 hectares and is valid for 25
years. The lease will enable the Company to explore and mine within all the
mineral right areas owned by the Vyvyan family inside the South Crofty mine,
and to explore certain other mineral right areas adjacent to the South Crofty
mine.
In addition, on October 19, 2022, agreement was reached with Roskear Minerals
LLP ("Roskear Minerals") to lease certain mineral rights located immediately
adjacent to the southern boundary of the South Crofty mine. The agreement
covers an area of 49 hectares which includes part of the historic Great Flat
Lode and lies within the Company's Carn Brea exploration area, as noted above.
The agreement is for an initial prospecting lease for five years, with the
Company having the option to extend for a further five years if required.
The agreement can be converted to a mining lease at any time within the ten
year period. The agreement will enable the Company to explore and, if
successful, mine within the lease area, subject to receipt of mining
permissions for that particular area that lies outside of the current South
Crofty underground permission area.
These agreements supplement the agreement reached with Roskear Minerals in
March 2021 (the "Roskear Agreement") to lease their mineral rights within the
South Crofty tin project. The Roskear Agreement enables the Company to
explore and develop the Mineral Resources that are contained in the Roskear
section of the South Crofty mine.
Strategic investment by Vision Blue Resources
On May 24, 2022, a financing of £40.5 million ($65.1 million based on the
closing exchange rate as at May 24, 2022) (the "Offering") was completed,
which included a £25.0 million (approximately $40.1 million based on the
closing exchange rate as at May 24, 2022) strategic investment by VBR. The
balance of the Offering was completed through a private placement with certain
Canadian and UK investors and eligible private investors.
A summary of the Offering is described below. Further details can be found in
the press releases dated March 27, 2022
(https://cornishmetals.com/site/assets/files/5498/2022-03-27_placing_rns.pdf)
and May 23, 2022
(https://cornishmetals.com/site/assets/files/5505/2022-05-23_closing.pdf) .
The Offering was structured through a unit offering comprising one common
share at £0.18 ($0.30 for Canadian investors) and a warrant to purchase one
common share priced at £0.27 ($0.45 for Canadian investors) for a period of
36 months from the closing date of the Offering. A total of 225,000,000
units have been issued, comprising around 44.0% of the issued share capital as
at May 24, 2022, excluding the effect of the issuance of the Milestone Shares
as described below. VBR held approximately 27.2% of the enlarged issued share
capital upon 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 on-site early works in
advance of a potential construction decision. The proceeds raised under the
Offering are budgeted to fund a 30 month program from closing of the Offering.
Pursuant to an Investment Agreement entered into between the Company and VBR,
upon closing of the Offering, VBR retains the following rights, among others,
subject to certain terms and conditions:
· For so long as its shareholding in the Company is in aggregate not
less than 10% of the Company's issued share capital:
o Nomination of one person to the Company's board of directors as a
non-executive director as an additional director to the current board of
directors (the "Investor Director"), with Mr. Trahar being appointed to this
position on June 6, 2022, as described below;
o Nomination of one person to the Company's technical committee to be formed
from closing of the Offering, which person may be a person other than the
Investor Director; and
o A participation right to maintain its percentage ownership interest in the
Company upon any offering of securities at the subscription price and similar
terms as are applicable to such offering; and
· For so long as its shareholding and its affiliates' shareholdings in
the Company are in aggregate not less than 5% of the Company's issued share
capital, the appointment of an observer to the board of directors of the
Company.
On closing of the Offering, VBR entered into a Relationship Agreement with the
Company and SP Angel Corporate Finance LLP (the Company's nominated adviser on
AIM), relating to the carrying on of the Company's business in an independent
manner following the closing of the Offering.
The Company has undertaken to VBR to use its reasonable commercial efforts to
complete a Feasibility Study in respect of South Crofty on or before 31
December 2024.
The Offering was subject to the approval of the TSX-V and shareholders, both
of which were received by May 19, 2022.
Issuance of shares as deferred consideration payable for the Cornwall mineral
properties
On June 30, 2021, agreement was reached with Galena Special Situations Limited
(formerly Galena Special Situations Master Fund Limited) and Tin Shield
Production Inc. (together the "Sellers") to restructure the outstanding
deferred consideration payable to the Sellers on the acquisition of the South
Crofty tin project and associated mineral rights (the "Side Letter"). The
fixed and variable payments that existed under the original share purchase
agreement were replaced with fixed payments linked to pre-agreed project
related milestones.
Pursuant to the Side Letter, 20,298,333 common shares were issued to the
Sellers on May 31, 2022 ("Milestone Shares"). This payment was triggered by
the Company raising funding for the dewatering of the South Crofty mine within
the planned use of proceeds from the Offering, as described above.
The Milestone Shares represent consideration equivalent to an amount of
US$4,750,000 ($6,089,500 at a US dollar / Canadian dollar exchange rate of
1.2820) at a deemed price of $0.30 per common share. The deemed price was
the same price under which Canadian investors subscribed to the Offering
pursuant to the terms of the Side Letter. The value of the Milestone Shares
in accordance with IFRS is $9,844,692, being the market price of the Milestone
Shares at their date of issuance.
As a result of this payment, the remaining deferred consideration payable to
the Sellers is US$5,000,000 in common shares, payable upon a decision to
proceed with the development and/or construction of a mine either at the South
Crofty tin project or at the United Downs property.
Disposal of Sleitat royalty to Electric Royalties
On May 27, 2022, the disposal of a 1% Net Smelter Royalty on the Sleitat
tin-silver project located in Alaska, USA to Electric Royalties Limited was
completed. The consideration was $100,000 and 1,000,000 common shares in
Electric Royalties, which in aggregate amounted to $355,000 at the date of
completion.
Appointment of new director
On June 6, 2022, Mr. Tony Trahar was nominated by VBR to serve as its
representative on the Company's board of directors. Mr. Trahar is currently
a special adviser to VBR.
Mr. Trahar has had a 40 year career in the mining, natural resources and
industrial sectors. From 2000 to 2007 he was Chief Executive of Anglo American
Plc, one of the world's largest mining groups, and was also a director of
Anglo Gold, Anglo Platinum and De Beers.
From 1985 to 2000, Mr. Trahar was Chief Executive, and then Chairman of Mondi
Ltd (now listed in London as Mondi Plc), a multinational forestry, pulp, paper
and packaging group. Since leaving Anglo American, Mr. Trahar has also held a
number of senior advisory roles for Barclays Natural Resource Investments
(2007 to 2013) and Macquarie Bank (2014 to 2016).
Financial highlights for the years ended January 31, 2023 and 2022
Years ended
January 31, 2023 January 31, 2022
(Expressed in Canadian dollars)
Total operating expenses 3,448,124 3,007,748
Loss before income taxes 1,202,257 2,911,140
Loss for the year 1,218,257 2,911,140
Net cash (used in) operating activities (3,607,008) (3,085,862)
Net cash (used in) investing activities (10,318,376) (3,988,978)
Net cash provided by financing activities 61,657,081 13,963,043
Cash at end of the financial year 55,495,233 6,922,704
· Higher promotional and corporate expenses following successful
fundraise cornerstoned by VBR and progression of the South Crofty tin project;
· Unrealized gain of $752,368 arising from increased valuation of
holding in Cornish Lithium (carrying value: $2.3 million at January 31, 2023)
following its most recent fundraising completed in June 2022;
· Costs of $676,059 and $222,236 capitalized in connection with the
exploration programs at United Downs and Carn Brea, respectively (excluding
capitalized depreciation and other non-cash items);
· Expenditure of $4.0 million on the construction of the WTP, related
dewatering equipment and new or replacement equipment for the mine;
· Other project related costs of $5.6 million incurred since the closing
of the Offering relating to the advancement of the South Crofty tin project to
a potential construction decision, primarily for the metallurgical drill
program and planning activities for the WTP;
· Gross proceeds raised from the Offering of £40.5 million ($65.1
million), following gross proceeds raised from the AIM listing in comparative
period of £8.2 million ($14.4 million);
· Interest income of $417,136 arising from increased interest rates
being received on higher cash balance following the Offering; and
· Foreign exchange gain of $758,216 arising from appreciation of the
British pound compared to the Canadian dollar since closing of the Offering
and the resulting translation impact on the cash balance.
Outlook
As described above, 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 (December
2024). 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 on-site early works in
advance of a potential construction decision.
Within 30 months from the closing of the Offering, the Company's plans are as
follows:
· Construct and commission the WTP by the summer of 2023 and thereafter
complete the dewatering of the mine within 18 months;
· Complete drill programs for metallurgical studies and to produce an
updated JORC 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.
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
Ernest Bell
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 STATEMENTS OF FINANCIAL POSITION
AS AT JANUARY 31
(Expressed in Canadian dollars)
2023 2022
ASSETS
Current
Cash $ 55,495,232 $ 6,922,704
Marketable securities 2,718,936 1,574,506
Receivables 656,407 107,230
Prepaid expenses
371,977 231,933
59,242,552 8,836,373
Deposits 54,165 42,448
Property, plant and equipment 9,721,352 6,437,175
Exploration and evaluation assets 33,088,129 20,772,029
$ 102,106,198 $ 36,088,025
LIABILITIES
Current
Accounts payable and accrued liabilities $ 2,494,642 $ 613,178
Lease liability 642 4,204
Commitment to issue shares - 6,041,525
2,495,284 6,658,907
Lease liability - 667
NSR liability 9,149,804 8,717,330
11,645,088 15,376,904
SHAREHOLDERS' EQUITY
Capital stock 128,377,152 56,846,350
Share subscriptions received in advance 17,500 -
Capital contribution 2,007,665 2,007,665
Share-based payment reserve 384,758 630,265
Foreign currency translation reserve (648,962) (174,123)
Deficit (39,677,003) (38,599,036)
90,461,110 20,711,121
$ 102,106,198 $ 36,088,025
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
YEARS ENDED JANUARY 31
(Expressed in Canadian dollars)
2023 2022
EXPENSES
Accretion $ - $ 15,764
Advertising and promotion 515,166 372,910
Depreciation 443 25,507
Finance cost - 3,895
Insurance 145,462 95,918
Office, miscellaneous and rent 102,540 81,533
Professional fees 744,585 1,027,481
Generative exploration costs 122,797 37,047
Regulatory and filing fees 164,798 129,633
Share-based compensation - 80,554
Salaries, directors' fees and benefits 1,652,333 1,137,506
Total operating expenses (3,448,124) (3,007,748)
Interest income 417,136 1,099
Foreign exchange gain (loss) 758,216 (346,883)
Gain on the disposal of royalty 318,147 -
Unrealized gain on marketable securities 752,368 445,703
Realized loss on marketable securities - (237)
Loss on the disposal of property, plant and equipment - (3,074)
Loss before income taxes (1,202,257) (2,911,140)
Income tax expense (16,000) -
Loss for the year (1,218,257) (2,911,140)
Foreign currency translation (474,839) (413,151)
Total comprehensive loss for the year $ (1,693,096) $ (3,324,291)
Basic and diluted loss per share $ (0.00) $ (0.01)
Weighted average number of common shares outstanding: 456,262,207 267,601,284
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JANUARY 31
(Expressed in Canadian dollars)
2023 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year $ (1,218,257) $ (2,911,140)
Items not involving cash:
Accretion - 15,764
Depreciation 443 25,507
Share-based compensation - 80,554
Finance cost - 3,895
Gain on the disposal of royalty (318,147) -
Unrealized gain on marketable securities (752,368) (445,703)
Realized loss on marketable securities - 237
Loss on the disposal of property, plant and equipment - 3,074
Foreign exchange gain (loss) (758,217) 346,883
Income tax expense 16,000 -
Changes in non-cash working capital items:
Increase in receivables (549,177) (83,586)
Increase in prepaid expenses (96,025) (137,354)
Increase in accounts payable and accrued liabilities 68,740 16,007
Net cash used in operating activities (3,607,008) (3,085,862)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (2,729,942) (303,071)
Acquisition of exploration and evaluation assets (7,576,717) (3,683,498)
Proceeds from the sale of marketable securities, net - 3,063
Increase in deposits (11,717) (5,472)
Net cash used in investing activities (10,318,376) (3,988,978)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from AIM listing - 14,244,206
Proceeds from the Offering 65,135,746 -
Proceeds from option and warrant exercises 411,222 1,135,500
Proceeds from the warrant exercises received in advance of share 17,500 -
issue
Share issue costs (3,966,075) (1,162,613)
Proceeds from the disposal of royalty 63,147 -
Conversion of Royalty Option costs - (226,290)
Lease payments (4,459) (27,760)
Net cash provided by financing activities 61,657,081 13,963,043
Impact of foreign exchange on cash 840,832 (319,100)
Change in cash during the year 48,572,529 6,569,103
Cash, beginning of the year 6,922,704 353,601
Cash, end of the year $ 55,495,233 $ 6,922,704
Cash paid during the year for interest $ - $ -
Cash paid during the year for income taxes $ - $ -
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
YEARS ENDED JANUARY 31
(Expressed in Canadian dollars)
Number of shares Capital stock Share subscriptions received in advance Capital contribution Share-based payment reserve Foreign currency translation Deficit Total
reserve
Balance at January 31, 2021 149,918,585 $ 40,737,065 $ 189,902 $ 2,007,665 $ 846,212 $ 239,028 $ (35,687,896) $ 8,331,976
Foreign currency translation - - - - - (413,151) (413,151)
-
Share issuance pursuant to 117,226,572 14,434,108 (189,902) - - - - 14,244,206
AIM listing
Shares issued pursuant to property option agreement 7,000,000 1,750,000 - - - - - 1,750,000
Share issue costs - (1,506,824) - - - - - (1,506,824)
Warrant exercises 9,125,000 725,750 - - - - - 725,750
Option exercises 2,580,000 706,251 - - (296,501) - - 409,750
Share-based compensation - - - - 80,554 - - 80,554
Loss for the year - - - - - - (2,911,140) (2,911,140)
Balance at January 31, 2022 285,850,157 $ 56,846,350 $ - $ 2,007,665 $ 630,265 $ (174,123) $ (38,599,036) $ 20,711,121
Foreign currency translation - - - - - (474,839) (474,839)
-
Share issuance pursuant to the Offering 225,000,000 65,135,746 - - - - - 65,135,746
Shares issued pursuant to 20,298,333 9,844,692 - - - - - 9,844,692
property option agreement
Share issue costs - (3,966,075) - - - - - (3,966,075)
Warrant exercises 3,272,222 291,222 - - - - - 291,222
Option exercises 600,000 225,217 - - (105,217) - - 120,000
Expiry of options - - - - (140,290) - 140,290 -
Warrant exercises received in advance - - 17,500 - - - - 17,500
Loss for the year - - - - - - (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
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