CORNISH METALS RELEASES
UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND
ANALYSIS FOR THE THREE MONTHS ENDED 31 MARCH 2024
Vancouver, May 22, 2024
Cornish Metals Inc. (TSX-V/AIM: CUSN)
("Cornish Metals" or the "Company"), a mineral exploration and
development company focused on its 100% owned and permitted South
Crofty tin project in Cornwall, United Kingdom, is pleased to
announce that it has released its unaudited financial statements
and management, discussion and analysis ("MD&A") for the three
months ended March 31, 2024. The reports are available under the
Company's profile on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.cornishmetals.com).
Highlights for the three months ended March 31, 2024 and for
the period ending May 22,
2024
(All figures expressed in Canadian dollars unless otherwise
stated)
· South Crofty
Preliminary Economic Assessment ("PEA") completed, validating the
South Crofty tin project's economic viability (news release
dated April
30, 2024):
o After-tax Net Present Value ("NPV") of US$201 million and
Internal Rate of Return ("IRR") of 29.8%;
o Average annual tin production of over 4,700 tonnes for years
two through six, totaling 49,310 tonnes over a 14-year Life of
Mine;
o Total after-tax cash flow of approximately US$626 million from
start of production.
· Purchase
of land totaling 7.7 acres located immediately adjacent to South
Crofty surface infrastructure (news release dated May 21,
2024):
o The
purchased land removes reliance on existing right-of-passage
agreements, providing the Company with direct access to all surface
infrastructure as well as additional space for future site works,
opportunities for potential operating cost savings, renewable
energy initiatives and improved overall property
security.
·
Refurbishment of NCK shaft has commenced:
o Rephasing shaft
refurbishment will improve the functionality of New Cook's Kitchen
("NCK") shaft and enable larger equipment to access the mine
at an earlier stage in its re-development (news release dated
March
3, 2024);
o Winders and cages are now installed, fully commissioned and
certified to allow for safe transport of equipment and workers
within NCK shaft.
· Mine dewatering
continues with the submersible pumps and Water Treatment Plant
("WTP") operating to specifications:
o Water level in NCK shaft is being maintained at approximately
280 meters below surface with the rate of dewatering being
reduced to allow shaft refurbishment and dewatering to proceed
concurrently;
o Treated water being discharged to the Red River continues to
exceed the standards permitted by the Environment
Agency.
·
The Company announced the appointment of Ken
Armstrong, a non-executive director, as Interim Chief Executive
Officer ("CEO") effective March 31, 2024, replacing Richard
Williams, who also stepped down from the Company's
Board:
o Patrick Anderson, Chairman of the Board, became the Executive
Chairman of the Company for the transition period until a permanent
CEO is appointed (news release dated March
15, 2024);
o The
process for the appointment of a permanent CEO has commenced with
the assistance of an appointed executive search
consultant.
·
Samantha Hoe-Richardson joined the Board as
independent non-executive director effective January 8, 2024 (news
release dated January
8, 2024).
Ken
Armstrong, Interim CEO and Director of Cornish Metals,
stated, "The Cornish Metals team has
recently accomplished an important milestone for the Company,
completing a Preliminary Economic Assessment of the South Crofty
project that confirms the Project's potential to be a low-cost and
long-life tin mining operation. The PEA results are compelling with
a post-tax NPV8% of US$201 million and IRR of about 30%,
representing a strong foundation for further evaluation of the
Project and enabling the Company to move forward with additional
preparation work and progress towards a construction
decision."
Financial highlights for the three months ended March 31, 2024
and April 30, 2023
|
Three months ended
(unaudited)
|
|
March 31,
2024
|
April 30,
2023
|
(Expressed in Canadian dollars)
|
|
|
Total operating expenses
|
2,759,198
|
924,120
|
Loss for the period
|
2,561,669
|
206,802
|
Net
cash used in operating activities
|
1,148,564
|
1,030,901
|
Net
cash used in investing activities
|
7,895,388
|
7,027,003
|
Net
cash used in financing activities
|
85,646
|
723
|
Cash at end of the period
|
17,015,749
|
49,078,875
|
· Increase in
operating expenses impacted by higher travel and marketing
expenditure arising from increased investor engagement and
termination settlement payable to the former CEO;
·
Expenditure of $1.0 million on new or replacement
equipment for the mine, including the final payments for the
permanent pumps for the underground pump station, cages and the new
winders;
·
Dewatering costs of $1.3 million for power,
reagents, sludge disposal and maintenance of the WTP;
· Other project
related expenditure of $2.5 million relating to the advancement of
South Crofty to a potential construction decision, primarily for
the ongoing feasibility study and NCK shaft re-access;
·
Costs of $0.8 million incurred for the
continuation of the exploration program at Carn Brea;
and
· Cash
decreased by $9.1 million to $17.0 million at the period end mainly
due to ongoing development activities at the South Crofty tin
project.
The Company changed its financial
year end from January 31 to December 31 with effect from December 31, 2023
with the result that the current period of reporting is the three
months ended March 31, 2024. The comparative period of
reporting is the three months ended April 30, 2023.
The Company has allocated funding
for near term opportunities to progress the project, the most
significant being the purchase of the land located immediately
adjacent to South Crofty surface infrastructure. As a consequence
of pursuing these opportunities, additional financing will be
required before the end of 2024.
Outlook
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;
· Advancing
all stages of the Feasibility Study;
·
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 will also continue subject
to the receipt of satisfactory drill results.
ABOUT CORNISH METALS
Cornish Metals is a dual-listed
mineral exploration and development 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, 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 one of the highest grade tin Mineral Resources globally
and benefits from existing mine infrastructure including multiple
shafts that can be used for future operations;
· The 2024
Preliminary Economic Assessment for South Crofty validates the
Project's potential (see news release dated April
30, 2024):
o US$201 million
after-tax NPV8% and 29.8% IRR
o 3-year after-tax
payback
o 4,700 tonnes average
annual tin production in years two through six
o Life of mine all-in
sustaining cost of US$13,700 /tonne of payable tin
o Total after-tax cash
flow of US$626 million from start of production
· Tin is a
Critical Mineral as defined by the UK, American, and Canadian
governments;
·
Approximately two-thirds of the tin mined today comes 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, regional and national
government support.
· Cornish
Metals has a growing team of skilled people, local to Cornwall, and
the Project could generate up to 320 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
"Kenneth A. Armstrong"
Kenneth A. Armstrong
P.Geo.
Engage with us directly at our
investor hub. Sign up at: https://investors.cornishmetals.com/link/WrAnXP
For additional information please
contact:
Cornish Metals
|
Fawzi Hanano
Irene Dorsman
|
investors@cornishmetals.com
info@cornishmetals.com
|
|
|
Tel: +1 (604) 200 6664
|
SP
Angel Corporate Finance LLP
(Nominated Adviser & Joint
Broker)
|
Richard Morrison
Charlie Bouverat
Grant Barker
|
Tel: +44 203 470 0470
|
|
|
|
Cavendish Capital Markets Limited
(Joint
Broker)
|
Derrick Lee
Neil McDonald
Leif Powis
|
Tel: +44 131 220 6939
Tel: +44 207 220 0500
|
|
|
|
Hannam & Partners
(Financial
Adviser)
|
Matthew Hasson
Andrew Chubb
Jay Ashfield
|
cornish@hannam.partners
Tel: +44 207 907 8500
|
|
|
|
BlytheRay
(Financial PR)
|
Tim Blythe
Megan Ray
|
tim.blythe@blytheray.com
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 and NCK Shaft
refurbishment expectations, timing of completion of a technical
report summarising the results of the PEA; the development,
operational and economic results of the PEA, including cash flows,
capital expenditures, development costs, extraction rates, recovery
rates, mining cost estimates; estimation of mineral resources;
statements about the estimate of mineral resources; magnitude or
quality of mineral deposits; anticipated advancement of the South
Crofty project mine plan; future operations; the completion and
timing of future development studies; anticipated advancement of
mineral properties or programmes; 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 CONDENSED INTERIM STATEMENTS OF FINANCIAL
POSITION
(Unaudited)
(Expressed in
Canadian dollars)
|
March 31, 2024
|
December 31,
2023
|
|
|
|
ASSETS
|
|
|
Current
|
|
|
Cash
|
$
17,015,749
|
$
25,791,552
|
Marketable
securities
|
2,795,644
|
2,665,454
|
Receivables
|
1,092,930
|
1,112,638
|
Prepaid
expenses
|
686,699
|
591,264
|
Deferred
financing fees
|
224,867
|
135,242
|
|
21,815,889
|
30,296,150
|
|
|
|
Deposits
|
87,380
|
85,954
|
Property, plant and
equipment
|
24,235,161
|
23,788,325
|
Exploration and
evaluation assets
|
56,705,272
|
50,050,323
|
|
|
|
|
$ 102,843,702
|
$
104,220,752
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Current
|
|
|
Accounts payable and accrued liabilities
|
$
4,434,411
|
$
5,063,940
|
|
4,434,411
|
5,063,940
|
NSR
liability
|
9,286,879
|
9,064,817
|
|
13,721,290
|
14,128,757
|
SHAREHOLDERS' EQUITY
|
|
|
Capital stock
|
128,394,652
|
128,394,652
|
Capital
contribution
|
2,007,665
|
2,007,665
|
Share-based payment
reserve
|
889,839
|
711,690
|
Foreign currency
translation reserve
|
2,783,083
|
1,369,146
|
Deficit
|
(44,952,827)
|
(42,391,158)
|
|
|
|
|
89,122,412
|
90,091,995
|
|
|
|
|
$
102,843,702
|
$
104,220,752
|
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
(Unaudited)
(Expressed in
Canadian dollars)
|
Three
months ended
|
|
March 31, 2024
|
April 30, 2023
|
|
|
|
EXPENSES
|
|
|
Travel and
marketing
|
$ 214,138
|
$
89,590
|
Insurance
|
203,063
|
172,430
|
Office, miscellaneous
and rent
|
56,505
|
51,613
|
Professional fees
|
275,093
|
200,735
|
Generative exploration
costs
|
1,191
|
2,607
|
Regulatory and filing
fees
|
29,265
|
33,274
|
Share-based compensation
|
123,799
|
-
|
Salaries, directors'
fees and benefits
|
1,856,144
|
373,871
|
|
|
|
Total operating
expenses
|
(2,759,198)
|
(924,120)
|
|
|
|
Interest income
|
265,666
|
388,384
|
Foreign exchange gain (loss)
|
(18,900)
|
370,892
|
Unrealized loss on marketable securities
|
(49,237)
|
(41,958)
|
|
|
|
Loss for the period
|
(2,561,669)
|
(206,802)
|
|
|
|
Foreign
currency translation
|
1,413,937
|
2,963,722
|
Total comprehensive income (loss) for the
period
|
$
(1,147,732)
|
$ 2,756,920
|
|
|
|
Basic and diluted income (loss) per share
|
$
(0.00)
|
$
0.01
|
|
|
|
Weighted average number of common shares
outstanding:
|
535,270,712
|
535,265,094
|
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH
FLOWS
(Unaudited)
(Expressed in
Canadian dollars)
|
For the
three months ended
|
|
March 31, 2024
|
April 30, 2023
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
Loss for the
period
|
$ (2,561,669)
|
$
(206,802)
|
Items not involving
cash:
|
|
|
Share-based
compensation
|
123,799
|
-
|
Unrealized
loss on marketable securities
|
49,237
|
41,958
|
Foreign
exchange loss (gain)
|
18,900
|
(370,892)
|
|
|
|
Changes in non-cash
working capital items:
|
|
|
Decrease (increase) in receivables
|
19,706
|
(528,374)
|
Increase in prepaid expenses
|
(16,527)
|
(167,194)
|
Increase in accounts payable and accrued liabilities
|
1,217,990
|
200,403
|
|
|
|
Net cash used in
operating activities
|
(1,148,564)
|
(1,030,901)
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
Acquisition of property,
plant and equipment
Acquisition of exploration
and evaluation assets
Increase in deposits
|
(2,369,406)
(5,525,982)
-
|
(3,179,655)
(3,818,598)
(28,750)
|
Net cash used in
investing activities
|
(7,895,388)
|
(7,027,003)
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
Increase in deferred
financing fees
|
(85,646)
|
-
|
Lease
payments
|
-
|
(723)
|
|
|
|
Net cash used in
financing activities
|
(85,646)
|
(723)
|
|
|
|
Change in cash during the period
|
(9,129,598)
|
(8,058,627)
|
Cash, beginning of the period
|
25,791,552
|
55,495,232
|
Impact of foreign exchange on cash
|
353,795
|
1,642,270
|
|
|
|
Cash, end of the period
|
$
17,015,749
|
$
49,078,875
|
|
|
|
Cash paid during the period for interest
|
$
-
|
$
-
|
|
|
|
Cash paid during the period for income taxes
|
$
|
$
-
|