Cornish Metals Releases Unaudited Financial Statements And Management’s Discussion And Analysis For The Six Months Ended July 31, 2021
23 September 2021
(Vancouver, September 22, 2021) 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 interim unaudited financial statements and management, discussion and analysis (“MD&A”) for the six months ended July 31, 2021. The reports are available under the Company’s profile on SEDAR (www.sedar.com) and on the Company’s website (www.cornishmetals.com).
Highlights for the six months ended July 31, 2021 and for the period ending September 22, 2021
(All figures expressed in Canadian dollars unless otherwise stated)
- Completion of listing and concurrent financing on AIM in February 2021 raising gross proceeds of £8.2 million ($14.4 million based on closest available exchange rate) to advance the United Downs exploration project and for general working capital purposes (news release dated Feb. 15, 2021);
- Conversion of Osisko loan note in February 2021 into two royalty agreements over mineral properties in Cornwall with an accompanying simplified and reduced security package (news release dated Feb. 22, 2021);
- Agreements reached for the leasing of additional mineral rights at the South Crofty tin project and surface land surrounding the New Roskear Shaft, and binding heads of terms agreed for the disposal of waste material derived from the dewatering of the South Crofty mine (news release dated March 8, 2021);
- Increases in Indicated Resource and Inferred JORC (2012) Compliant Resource of contained tin / tin equivalent by 10.2% and 129.8%, respectively, for the Lower Mine in an updated Mineral Resource Estimate for South Crofty Mine published in June 2021 (news release dated June 9, 2021);
- Commencement of phased exploration program at the United Downs exploration project in April 2021 with results from first 3,042 meters of drilling reported to date, with a further 5,000 to 6,000 meters of drilling planned under the program (news releases dated July 5, 2021 and August 30, 2021);
- Agreement reached for the restructuring of outstanding deferred consideration relating to the acquisition of the South Crofty tin project and associated mineral rights, subject to regulatory approval (news release dated July 1, 2021); and
- Financing options continue to be considered to progress the South Crofty tin project.
Richard Williams, CEO of Cornish Metals, stated, “The past six months has been a busy period for the Company after the successful listing on AIM earlier in the year. The Company’s capital structure has been simplified through the conversion of the Osisko loan note into royalties and the restructuring of the deferred consideration payable in respect of the acquisition of the Cornwall mineral properties into fixed payments linked to project related milestones.
Operationally, after the commencement of the exploration program at United Downs in April, we have reported promising results from the first 3,000 meters of drilling, with further drilling planned to fully determine the extent of mineralization at United Downs. We have also reported a substantial increase in mineral resource for South Crofty with further potential with the major lode structures remaining open along strike.
After the simplification of our capital structure and increase in mineral resource, we are assessing various financing options to progress South Crofty which remains a key strategic asset for the Company. South Crofty could potentially play a pivotal role in securing a domestic and sustainable source of battery metals as the UK transitions to a low carbon economy.”
Review of activities
Listing on AIM
On February 16, 2021, the Company completed its listing and concurrent financing on AIM issuing 117,226,572 common shares at a price of £0.07 ($0.12), raising gross proceeds of £8,205,860 ($14,434,108 based on February 12, 2021 closing exchange rate). The Company’s shares continue to be listed and traded on the TSX-V.
The proceeds from the AIM listing are being used to conduct a drill program at the United Downs exploration project to determine the resource potential of a 1,000 meter strike section of the main target area, to conduct initial field work (soil sampling and geophysics and possible drill testing) on other high priority exploration targets within transport distance of the proposed South Crofty process plant, and for general working capital purposes.
Pursuant to the Listing, the Company, SP Angel Corporate Finance LLP (the Company’s nominated adviser on AIM) and Osisko Development Corporation (“ODV”, a significant shareholder of the Company), entered into a Relationship Agreement which governed ODV’s conduct as a significant shareholder in the Company. Following exercises of warrants subsequent to the Company’s listing on AIM, ODV’s shareholding in the Company has since fallen below 20.0%, which has resulted in the termination of the Relationship Agreement.
Conversion of Osisko loan note into royalties
On February 19, 2021, Osisko Gold Royalties Limited (“Osisko”) exercised its royalty option and converted its loan note with a face value of $7.17 million into two royalties as follows:
a perpetual 1.5% NSR on the South Crofty tin project; and
a perpetual 0.5% NSR on any other mineral rights held by the Company in Cornwall that do not form part of the South Crofty tin project, (together, the “Royalty Agreements”).
In connection with the conversion of the loan note, Osisko agreed to release the comprehensive security package entered into by the Company in January 2018 pursuant to the loan note, and has instead agreed to a more simplified and reduced security package for the Royalty Agreements. The reduced security package is in practice restricted to the Company’s subsidiary, Cornish Minerals Limited (Bermuda), which holds the Company’s mineral rights. Liquidated damages also become payable to Osisko in the event of default.
Both royalties become payable from the commencement of production which is defined in the Royalty Agreements. The royalties are payable on all products which include any and all metals, minerals and products or by-products thereof.