REG - Cornish Metals Inc. - UNAUDITED FINANCIAL STATEMENTS FOR Q1 2024
23/05/2024 07:00
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RNS Number : 5478P Cornish Metals Inc. 23 May 2024
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 (http://www.sedarplus.ca) ) and on the Company's
website (www.cornishmetals.com (http://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
(https://investors.cornishmetals.com/announcements/6315981) ):
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
(https://investors.cornishmetals.com/announcements/6347322) ):
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
(https://investors.cornishmetals.com/announcements/6229157) );
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
(https://investors.cornishmetals.com/announcements/6248718) );
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
(https://investors.cornishmetals.com/announcements/6152972) ).
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 NPV(8%)
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
(https://investors.cornishmetals.com/announcements/6315981) ):
o US$201 million after-tax NPV(8%) 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
(https://investors.cornishmetals.com/link/WrAnXP)
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
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 (2,369,406) (3,179,655)
Acquisition of exploration and evaluation assets (5,525,982) (3,818,598)
Increase in deposits - (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 $ $ -
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, 2023 535,020,712 $128,377,152 $ 17,500 $ 2,007,665 $ 384,758 $ (648,962) $ (39,677,003) $ 90,461,110
Warrant exercise 250,000 17,500 (17,500) - - - - -
Foreign currency translation - - - - - 2,963,722 2,963,722
-
Loss for the period - - - - - - (206,802) (206,802)
Balance at April 30, 2023 535,270,712 $128,394,652 $ - $ 2,007,665 $ 384,758 $2,314,760 $ (39,883,805) $ 93,218,030
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
Foreign currency translation - - - - - 1,413,937 1,413,937
-
Share-based compensation - - - - 178,149 - - 178,149
Loss for the period - - - - - - (2,561,669) (2,561,669)
Balance at March 31, 2024 535,270,712 $128,394,652 $ - $ 2,007,665 $ 889,839 $ 2,783,083 $ (44,952,827) $ 89,122,412
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