REG - Cornish Metals Inc. - UNAUDITED FINANCIAL STATEMENTS AND MD&A
14/12/2023 07:15
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RNS Number : 7180W Cornish Metals Inc. 14 December 2023
CORNISH METALS RELEASES UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S
DISCUSSION AND ANALYSIS FOR THE NINE MONTHS ENDED 31 OCTOBER 2023
Vancouver, December 13, 2023
Cornish Metals Inc. (TSX-V/AIM: CUSN) ("Cornish Metals" or the "Company"), a
mineral exploration and development company focused on advancing the South
Crofty tin project to a production decision, located 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 nine
months ended October 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 nine months ended October 31, 2023 and for the period
ending December 13, 2023
(All figures expressed in Canadian dollars unless otherwise stated)
· Commissioning of the water treatment plant ("WTP") completed at the
end of October 2023 with discharge of treated water to the Red River
commencing shortly thereafter in accordance with permitted standards (news
release dated October
(https://cornishmetals.com/site/assets/files/5630/2023-10-25_start_of_mine_dewatering.pdf)
25,
(https://cornishmetals.com/site/assets/files/5630/2023-10-25_start_of_mine_dewatering.pdf)
2023
(https://cornishmetals.com/site/assets/files/5630/2023-10-25_start_of_mine_dewatering.pdf)
);
· Good progress is being made on the mine dewatering with the water
level falling faster than expected in the first month of dewatering (news
release dated December 6, 2023
(https://cornishmetals.com/site/assets/files/5639/2023-12-06_dewatering_update.pdf)
);
· Updated Mineral Resource Estimate ("MRE") for South Crofty mine
released in September 2023 showing a 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 program to collect samples for metallurgical testwork as part of
the South Crofty Feasibility Study completed in June 2023 with assay results
reported (news release dated July 3, 2023
(https://cornishmetals.com/site/assets/files/5597/2023-07-03_drill_results_final.pdf)
);
· Ore sorting testwork completed with excellent results: 55% mass
rejection with less than 3% metal loss (XRT: -50mm to +15mm size fraction) and
50% mass rejection with less than 5% metal loss (HLS: -15mm to +0.85mm size
fraction) (news release dated October 8, 2023
(https://cornishmetals.com/site/assets/files/5629/2023-10-08_sc_project_update_ore_sorting_results.pdf)
);
· Metallurgical testwork results confirm the potential to upgrade the
mineralization of the South Crofty mine and enable process design optimization
work on the size of the mineral processing plant (news release dated October
8, 2023
(https://cornishmetals.com/site/assets/files/5629/2023-10-08_sc_project_update_ore_sorting_results.pdf)
);
· Two submersible pumps installed in New Cook's Kitchen ("NCK") shaft
with the pumps and variable speed drives successfully commissioned in July
2023 (news releases dated June 26, 2023
(https://cornishmetals.com/site/assets/files/5594/2023-06-26_pump_1_installation.pdf)
and July 18, 2023
(https://cornishmetals.com/site/assets/files/5601/2023-07-18_2nd_pump_and_power.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)
);
· Two single drum winders for the shaft re-access delivered to site by
early November 2023 with their installation underway;
· Remedial work underway on the south headframe above NCK shaft and the
winder building in readiness for the installation of the main winder;
· Work on the Feasibility Study continues and is well underway, and
· Commencement of follow-up exploration drill program 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)
).
Richard Williams, CEO of Cornish Metals, stated, "Looking back on 2023, I want
to commend the Cornish Metals team for the outstanding progress that has been
achieved at South Crofty with some very important milestones being met, in
particular, the commissioning of the water treatment plant and the subsequent
commencement of mine dewatering that is tracking ahead of expectations. This
progress would not have been achieved without the support of suppliers, the
community and other local stakeholders.
Looking ahead to 2024, we can look forward to another busy year. The
continuation of dewatering at deeper levels will allow access to the mine for
the first time in over 25 years. We remain focussed on our objective to
complete the dewatering of South Crofty within 18 months from commencement.
The expected completion of the Feasibility Study will move South Crofty a
stage further towards a construction decision. I also look forward to
reporting on the results of the drill program at the Wide Formation which, if
successful, will benefit the economics of South Crofty with the potential to
increase production and extend the mine life.
The financial position of the Company remains healthy and we appreciate the
continuing support and advice from our major shareholder, Vision Blue
Resources."
Financial highlights for the nine months ended October 31, 2023 and October
31, 2022
Nine months ended (unaudited)
October 31, 2023 October 31, 2022
(Expressed in Canadian dollars)
Total operating expenses $3,281,200 $2,616,299
Loss for the period $1,571,831 $3,557,556
Net cash (used in) operating activities $(1,761,034) $(3,047,818)
Net cash (used in) investing activities $(23,335,112) $(5,760,776)
Net cash provided by (used in) financing activities $(723) $61,456,627
Cash at end of the period $31,579,386 $57,840,129
· 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;
· Interest income of $1.5 million arising from increased interest rates
being received on higher cash balance following the Offering;
· Expenditure of $12.4 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 $8.4 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;
· Costs of $0.8 million incurred for the continuation of the exploration
program at Carn Brea which re-commenced in June 2023; and
· Recognition of foreign currency translation gain of $1.6 million for
those assets located in the UK when translated into Canadian dollars for
presentational purposes.
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.
Within 30 months from the closing of the Offering, the Company's objectives
are as follows:
· Commence dewatering of the mine and thereafter complete the dewatering
of the mine within 18 months;
· Complete a Feasibility Study using all reasonable commercial efforts;
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 program 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 program at United Downs and
evaluating other high potential, exploration targets within transport distance
of the planned processing plant site at South Crofty.
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 is an enabler of 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.
An updated Mineral Resource was completed in September 2023 with a 39%
increase in tonnes and 32% increase in contained tin in the Indicated category
for the Lower Mine (see news release dated September 13, 2023
(https://cornishmetals.com/site/assets/files/5612/2023-09-13_mre_final.pdf) )
as summarised below:
South Crofty Summary (JORC 2012) Mineral Resource Estimate
Area Classification Mass Grade Contained Tin /
(kt) Tin Equivalent
(kt)
Lower Mine Indicated 2,896 1.50% Sn 43.6
Inferred 2,626 1.42% Sn 37.4
Upper Mine Indicated 260 0.99% SnEq 2.6
Inferred 465 0.91% SnEq 4.2
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.
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 mineralization 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
"Richard D. Williams"
Richard D. Williams, P.Geo
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
Hannam & Partners Matthew Hasson cornish@hannam.partners (mailto:cornish@hannam.partners)
(Joint Broker) 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 "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)
October 31, 2023 January 31, 2023
ASSETS
Current
Cash $31,579,386 $55,495,232
Marketable securities 2,636,751 2,718,936
Receivables 1,004,604 656,407
Prepaid expenses 314,331 371,977
35,535,072 59,242,552
Deposits 84,600 54,165
Property, plant and equipment 22,209,962 9,721,352
Exploration and evaluation assets 44,966,254 33,088,129
$102,795,888 $102,106,198
LIABILITIES
Current
Accounts payable and accrued liabilities $ 2,573,144 $ 2,494,642
Lease liability - 642
2,573,144 2,495,284
NSR liability 9,506,886 9,149,804
12,080,030 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 592,272 384,758
Foreign currency translation reserve 970,103 (648,962)
Deficit (41,248,834) (39,677,003)
90,715,858 90,461,110
$102,795,888 $102,106,198
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Canadian dollars)
Nine months ended
October 31, 2023 October 31, 2022
EXPENSES
Travel and marketing $488,797 $ 399,321
Depreciation - 443
Insurance 511,899 99,295
Office, miscellaneous and rent 148,925 74,615
Professional fees 794,167 500,737
Generative exploration expense 5,433 96,108
Regulatory and filing fees 73,171 144,468
Share-based compensation 130,136 -
Salaries, directors' fees and benefits 1,128,672 1,301,312
Total operating expenses (3,281,200) (2,616,299)
Interest income 1,456,697 136,216
Foreign exchange gain (loss) 394,980 (1,907,824)
Gain on the disposal of royalty - 318,147
Unrealized gain (loss) on marketable (147,296) 512,204
securities
Loss before income taxes (1,576,819) (3,557,556)
Income tax recovery 4,988 -
Loss for the period (1,571,831) (3,557,556)
Foreign currency translation 1,619,065 (2,365,115)
Total comprehensive income (loss) for the period $ 47,234 $ (5,922,671)
Basic and diluted income (loss) per share $ 0.00 $ (0.01)
Weighted average number of common shares outstanding: 535,268,881 430,111,396
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Canadian dollars)
For the Nine months ended
October 31, 2023 October 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (1,571,831) $ (3,557,556)
Items not involving cash:
Depreciation - 443
Share-based compensation 130,136 -
Gain on the disposal of royalty - (318,147)
Unrealized loss (gain) on marketable securities 147,296 (512,204)
Foreign exchange loss (gain) (394,980) 1,907,824
Income tax recovery (4,988) -
Income taxes paid (11,012) -
Changes in non-cash working capital items:
Increase in receivables (348,196) (565,408)
Decrease in prepaid expenses 105,201 69,395
Increase (decrease) in accounts payable and accrued liabilities 187,340 (72,165)
Net cash used in operating activities (1,761,034) (3,047,818)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (11,817,289) (1,569,968)
Acquisition of exploration and evaluation assets (11,489,073) (4,181,597)
Increase in deposits (28,750) (9,211)
Net cash used in investing activities (23,335,112) (5,760,776)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the Offering - 65,135,746
Proceeds from option and warrant exercises - 227,000
Share issue costs - (3,966,076)
Proceeds from the disposal of royalty - 63,147
Lease payments (723) (3,190)
Net cash provided by (used in) financing activities (723) 61,456,627
Impact of foreign exchange on cash 1,181,023 (1,730,608)
Change in cash during the period (23,915,846) 50,917,425
Cash, beginning of the period 55,495,232 6,922,704
Cash, end of the period $ 31,579,386 $ 57,840,129
Cash paid during the period for interest $- $ -
Cash paid during the period for income taxes $11,012 $-
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(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 - (3,966,076) - - - - - (3,966,076)
Warrant exercises 900,000 87,000 25,000 - - - - 112,000
Option exercises 575,000 115,000 - - - - - 115,000
Shares issued pursuant to property option agreement 20,298,333 9,844,692 - - - - - 9,844,692
Foreign currency translation - - - - - (2,365,115) - (2,365,115)
Loss for the period - - - - - - (3,557,556) (3,557,556)
Balance at October 31, 2022 532,623,490 $128,062,712 $ 25,000 $2,007,665 $630,265 $(2,539,238) $ (42,156,592) $ 86,029,812
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 - - - - - 1,619,065 - 1,619,065
Share-based compensation - - - - 207,514 - - 207,514
Loss for the period - - - - - - (1,571,831) (1,571,831)
Balance at October 31, 2023 535,270,712 $128,394,652 $- $2,007,665 $592,272 $ 970,103 $ (41,248,834) $ 90,715,858
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