TIDMCUSN
RNS Number : 8583L
Cornish Metals Inc.
18 May 2022
CORNISH METALS RELEASES AUDITED FINANCIAL STATEMENTS AND
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEARED JANUARY 31,
2022
May 18, 2022
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, 2022. 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 year ended January 31, 2022 and for the
period ending May 17 , 2022
(All figures expressed in Canadian dollars unless otherwise
stated)
-- Completion of listing and concurrent financing on AIM in
February 2021 raising gross proceeds of GBP8.2 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 February 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 February 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 JORC (2012) compliant Indicated and Inferred
Mineral Resource Estimates of contained tin / tin equivalent by
10.2% and 129.8%, respectively, for the Lower Mine in an updated
Mineral Resource Estimate for the 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
3,927 meters of drilling reported to date, with further assay
results to be reported when available (news releases dated July 5,
2021 , August 30, 2021 , November 3, 2021 and December 6, 2021 )
;
-- Agreement reached for the restructuring of outstanding
deferred consideration relating to the acquisition of the South
Crofty tin project and associated mineral rights (news releases
dated July 1, 2021 , October 4, 2021 and November 3, 2021 ) ;
-- Conditional financing announced in March 2022 to raise gross
proceeds of up to GBP40.5 million ($66.8 million based on closest
available exchange rate), including a strategic investment by
Vision Blue Resources of GBP25.0 million ($41.2 million), to
advance the South Crofty tin project to a potential construction
decision, with completion of the financing subject to, among other
things, receipt of TSX-V and shareholder approvals (news release
dated March 28, 202 2 ) ; and
-- Mr. Stephen Gatley appointed as an independent non-executive
director to the Board in October 2021.
Richard Williams, CEO of Cornish Metals, stated, "After the
successful listing on AIM in early 2021, I am delighted with the
progress which the Company has made across a number of fronts.
These included the simplification of the Company's capital
structure, advancing the exploration program at United Downs,
increasing the Mineral Resource Estimate for South Crofty, reaching
agreement on the deferred consideration for the Cornish assets and
agreeing to the leasing of additional mineral rights at South
Crofty.
These initiatives culminated in the announcement of a successful
launch of a financing at the end of March which included a
strategic investment by Vision Blue Resources. Subject to approvals
being received, this financing shall open a new chapter for the
Company as South Crofty is advanced towards a potential
construction decision.
In the coming months, I look forward to reporting on progress at
South Crofty and the substantial benefits this will bring to
Cornwall and more widely, the UK mining industry."
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 GBP0.07 ($0.12), raising gross proceeds of GBP8,205,860
($14,434,108 based on the closing exchange rate as at February 12,
2021). 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.
In connection with the admission of its shares on AIM, the
Company, SP Angel Corporate Finance LLP ("SP Angel", 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 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.
Agreement of South Crofty leases and disposal of mine water
treatment waste
On March 8, 2021, agreement was reached with Brownfield
Investments Limited and Roskear Minerals LLP ("Roskear Minerals")
to lease a 1.2 hectare site surrounding New Roskear Shaft in
Camborne, Cornwall for up to 23 years. This agreement secures
access to the New Roskear Shaft, a 650 meter deep, six meter
diameter, vertical shaft in the center of Camborne, which is
important for ventilation and secondary access / egress to the
South Crofty mine.
Also on March 8, 2021, agreement was reached to lease the
mineral rights owned by Roskear Minerals within the South Crofty
tin project for up to 25 years. This agreement enables the Company
to explore and develop the mineral resources that are contained in
the Roskear section of the South Crofty mine. During the 1980s and
1990s, much of the ore mined from the South Crofty mine originated
from this part of the mine, and it is considered by the Company to
be a key area for delineation of additional mineral resources.
Additionally, a binding heads of terms was agreed on March 8,
2021 with Wheal Jane Limited for the disposal of waste material
derived from the treatment of mine water from the South Crofty mine
into the Wheal Jane tailings dam located 12 kilometers east of
South Crofty. The agreement will become effective when dewatering
of the South Crofty mine commences.
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.
Updated Mineral Resource Estimate released for South Crofty
mine
An initial Mineral Resource Estimate ("MRE") was prepared in
2016 by P&E Mining Consultants. Since then, additional sampling
information has been audited, verified and added to the resource
model leading to an updated MRE for the Lower Mine and a re-stated
MRE for the Upper Mine using updated metal prices to calculate tin
equivalent grades.
An updated MRE for South Crofty mine was released on June 9,
2021 which showed a 10.2% increase in Indicated Mineral Resource to
2.08 million tonnes, grading 1.59% tin, and a 129.8% increase in
Inferred Mineral Resource to 1.94 million tonnes, grading 1.67%
tin. These figures are for the Lower Mine and are prepared in
accordance with the JORC Code (2012).
A summary of the updated MRE is tabulated below:
South Crofty Summary Mineral Resource Estimate
Area Classification Mass (000' Grade Contained Tin Increased in
tonnes) / Tin Equivalent contained Tin
(000' tonnes) / Tin equivalent
from 2016 MRE
Lower Mine Indicated 2,084 1.59% Sn 33 10.2%
Inferred 1,937 1.67% Sn 32 129.8%
Upper Mine Indicated 277 1.01% SnEq 3 9.5%
Inferred 493 0.93% SnEq 5 8.0%
The Lower Mine MRE is reported using a 0.6% tin cut-off grade
and the Upper Mine is reported using a 0.6% tin equivalent cut-off
grade, the same cut-off grades applied in the MRE prepared in 2016.
The MRE was prepared by the Company's geological team and
independently reviewed and verified by AMC Consultants (UK)
Ltd.
The Lower Mine contains tin mineralization within
quartz-tourmaline veins or "lode" structures, which are hosted
entirely within granitic rocks. The Upper Mine contains tin, copper
and zinc mineralization within quartz-chlorite veins, predominantly
hosted within meta-sedimentary units. The major lode structures
that comprise the MRE remain open along strike and to depth.
Mineral resources which are not mineral reserves do not have
demonstrated economic viability. The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
title, taxation, socio-political, marketing or other relevant
issues.
Results from ongoing exploration program at United Downs
The Company commenced its exploration program at United Downs in
early April 2021. The drilling activities have been contracted to
Priority Drilling Limited, under the supervision of the Company's
geological team.
The first phase of the drill program focused on tracing the
recently discovered high-grade copper-tin mineralization in the
structure named "UD Lode" (formerly Lithium Lode) along strike and
down dip.
The key points to date arising from the exploration program
are:
-- The UD Lode has been traced over a 200 meter strike length and 400 meter down dip;
-- Several additional zones of copper - tin - silver - zinc
mineralization have been intersected adjacent to the UD Lode;
and
-- Multiple zones of high-grade copper mineralization have been
intersected down dip beneath the historic United Mines.
A second target 900 meters to the south of the UD Lode, called
Trenares Lode, has also been drill tested. The Trenares Lode is
within the United Downs project area.
Details of the intercepts from the ongoing drill program
reported to date can be found in the press releases dated July 5,
2021 and August 30, 2021 , November 3, 2021 and December 6, 2021 .
The results reported to date represent a total of 3,927 meters of
drilling from 11 drill holes.
To date, 17 holes have been drilled into the UD Lode totaling
6,676 meters. For the Trenares Lode, nine holes have been drilled
totaling 2,683 meters. The drill program into the UD Lode is
continuing and assay results will follow when available.
Outside of the United Downs project area, a third target, Carn
Brea has also been drill tested. Carn Brea is located 1.5
kilometers southeast of the South Crofty tin project.
At Carn Brea, eight holes have been drilled totaling 2,504
meters. Drilling has now ceased and assays will follow when
available .
Restructuring of the 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 ("SPA") have been replaced with fixed payments linked to
pre-agreed project related milestones.
Prior to entering into the Side Letter, the balance of
consideration payable to the Sellers pursuant to the SPA was as
follows:
-- the issuance of 2,000,000 common shares to the Sellers on
delivery of a positive feasibility study or commencement of
commercial production for the South Crofty tin project, whichever
occurs first; and
-- a cash and / or common share payment to the Sellers equal to
25% of the Net Present Value ("NPV") of the project upon making a
decision to go into production. In the event that the Company's
market capitalization is less than the NPV of the project when a
production decision is made, the Company will pay the equivalent of
25% of its market value to the Sellers and the balance (between the
25% of market value and 25% of the NPV of the project) will be paid
out as a 5% net profits interest from production.
Pursuant to the Side Letter, the new fixed payments comprising
the balance of consideration payable to the Sellers are as
follows:
-- the issuance of 7,000,000 common shares to the Sellers
("Closing Shares") immediately upon receipt of shareholder and
applicable regulatory approval (issued October 29, 2021 at a value
of $1,750,000 in accordance with IFRS pursuant to the satisfaction
of this commitment);
-- in addition to the 7,000,000 Closing Shares, a total of
US$9,750,000 to be paid in common shares (the "Milestone Shares")
as certain milestones are reached. The Milestone Shares will be as
follows:
o US$4,750,000 to be paid in common shares upon closing of
either the financing for the dewatering of the mine at the South
Crofty tin project, and / or any interim financings (up to 10% of
the gross proceeds of such interim financings). This payment is
expected to be settled by the end of May 2022 subject to receipt of
shareholder and TSX-V approvals and closing of the conditional
financing as noted below; and
o US$5,000,000 to be paid in common shares upon making 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 .
Shareholder approval for the issuance of 7,000,000 common shares
pursuant to the Side Letter was received on July 31, 2021.
TSX-V approval for the Side Letter was received on November 3,
2021, other than for the issuance of the Closing Shares which was
received in October 2021. The future issuance of the Milestone
Shares by the Company is subject to TSX-V approval prior to such
issuance with the TSX-V determining the acceptability of the
pricing of the Milestone Shares at the time of such approval.
Strategic investment by Vision Blue Resources
On March 28, 2022, a conditional financing of up to GBP40.5
million ($66.8 million based on the closing exchange rate as at
March 25, 2022) (the "Offering") was announced, which includes a
GBP25.0 million (approximately $41.2 million based on the closing
exchange rate as at March 25, 2022) strategic investment by Vision
Blue Resources Limited ("VBR"). The balance of the Offering is
expected to be 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 release dated March 28, 2022 .
The Offering is being structured through a unit offering
comprising one common share at GBP0.18 ($0.30 for Canadian
investors) and a warrant to purchase one common share priced at
GBP0.27 ($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
are expected to be issued, comprising around 44.0% of the issued
share capital as enlarged by the Offering, excluding the effect of
the issuance of the Milestone Shares as described above. VBR is
expected to hold 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 will retain the
following rights, among others, subject to certain terms and
conditions:
-- For so long as its shareholding in the Company are 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");
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 will enter into a Relationship
Agreement with the Company and SP Angel, 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 is subject to receipt of TSX-V and shareholder
approvals. Completion is expected by the end of May 2022.
As described above, the Company expects to issue to the Sellers,
on or about the closing of the Offering, certain Milestone Shares
with an aggregate value of US$4,750,000 at the offering price of
the financing (converted into US dollars at the exchange rate on
the fifth business day before the date of the issue), subject to
receipt of approval of the TSX-V.
Appointment of new director
On October 13, 2021, Mr. Stephen Gatley was appointed to the
Board as an independent non-executive director. Mr. Gatley is based
in the UK and has previously served as a non-executive director of
Union Resources Ltd. and Sunridge Gold Corp. He has also been a
director of numerous Lundin Mining Corp subsidiary companies and
remains as a director of their Portuguese subsidiary, Somincor
S.A.
Mr. Gatley is a mining engineer and graduate of the Royal School
of Mines, London. He spent the early part of his career working in
the Cornish tin industry at both Wheal Jane and South Crofty mines
and was the General Manager at South Crofty at the time of its
closure in 1998. He also worked for Rio Tinto plc in senior
positions at underground base metal mines in both Europe and South
America, prior to joining Lundin Mining Corp where he served as
Vice President Technical Services from 2012 to 2021.
Financial highlights for the years ended January 31, 2022 and
2021
Years ended
January 31, January 31,
2022 2021
(Expressed in Canadian dollars)
Total operating expenses 3,007,748 1,986,727
Loss for the year 2,911,140 1,598,400
Net cash used in operating
activities 3,085,862 1,264,568
Net cash used in investing
activities 3,988,978 1,646,685
Net cash provided by financing
activities 13,963,043 1,970,752
Cash at end of the financial
year 6,922,704 353,601
-- Increase in operating expenses impacted by $368,325 of costs
relating to AIM listing not eligible for capitalization;
-- Higher operating expenses incurred more generally relating to
AIM listing, media/investor activities and corporate initiatives,
offset by reduction in costs arising from closure of Vancouver
office in April 2021;
-- Unrealized gain of $445,703 arising from increased valuation
of Company's holding in Cornish Lithium based on allotment price
following its fundraising completed in December 2021;
-- Costs of $2,108,368 and $419,078, capitalized in connection
with the ongoing exploration program at United Downs and Carn Brea,
respectively (excluding capitalized depreciation and other non-cash
items); and
-- Gross proceeds raised from AIM listing of $14.4 million
(GBP8.2 million) with share issue costs of $1.5 million.
Outlook
As described above, subject to receipt of regulatory and
shareholder approvals of the Offering which was announced in March
2022, the gross proceeds raised from this Offering will be used to
advance the South Crofty tin project to a potential construction
decision within 30 months from 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 .
Within 30 months from the closing of the Offering, the Company's
plans are as follows:
-- Construct the water treatment plant within six months and
thereafter complete the dewatering of the mine within 18
months;
-- Complete an underground drill program which is expected to
commence in June 2022 in order to delineate a Measured and
Indicated Mineral Resource and increase the Indicated and Inferred
Mineral Resource once access to the underground workings is
obtained;
-- Complete a Feasibility Study using all reasonable commercial
efforts on or before 31 December 2024;
-- Commence basic and detailed engineering studies, construction
of the processing plant, refurbishment of underground facilities
and other on-site early works; and
-- Evaluate downstream beneficiation opportunities in the UK and the rest of Europe.
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 ). 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
In the UK:
SP Angel Corporate
Finance LLP
(Nominated Adviser
& Joint Broker) Tel: +44 203 470 0470
Richard Morrison
Charlie Bouverat
Grant Barker
Hannam & Partners
(Joint Broker) Tel: +44 207 907 8500
Matthew Hasson
Andrew Chubb
Ernest Bell
BlytheRay
(Financial PR/IR-London) Tel: +44 207 138 3204
Tim Blythe tim.blythe@blytheray.com
Megan Ray 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". These
forward-looking statements are statements regarding the Company's
intentions, beliefs or current expectations concerning, among other
things, the Company's projections, outlook, forecast, estimates,
plans, potential results of operations or upcoming work programs,
financial condition, prospects, growth, strategies and the industry
in which the Company operates, including, without limitation:
statements in connection with the Offering, including the strategic
investment by VBR and the issuance of the units, the amounts
expected to be invested, the timeline of certain events in respect
thereof, expected security holdings of VBR in the Company following
closing of the Offering, the expected participation by other
investors in the Offering, the board nomination rights and other
rights expected to be granted to VBR under the Investment Agreement
following closing of the Offering, the terms and conditions of the
Relationship Agreement to be entered into with VBR, the expected
use of proceeds of the Offering, including in respect of certain
work programs and the potential completion of a feasibility study
on the South Crofty mine and the timing and expected benefits in
respect thereof, the satisfaction of conditions for closing of the
Offering, including the potential receipt of TSX-V and shareholder
approvals in respect of the Offering, the expected issuance of the
Milestone Shares subject to TSX-V approval, the Company's ability
to obtain financing when required and on terms acceptable to the
Company, the terms of the Company's Royalty Agreements and other
agreements in connection with the South Crofty tin project and
other Cornwall mineral properties, the estimation of mineral
reserves and resources, the realization of mineral reserve
estimates, and exploration activities and the potential success in
respect thereof.
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 changes in exploration plans due to exploration results
and changing budget priorities of the Company or its joint venture
partners, changes in project parameters as plans continue to be
refined, risks related to completion of the Offering, including,
among other things, risks related to the satisfaction of all
closing conditions of VBR's subscription and the Offering, the
dilution of the Company's shareholders as a result of the Offering,
VBR's significant influence over the Company upon completion of the
Offering, the potential impacts of VBR's significant interest in
the Company on the liquidity of the shares following closing of the
Offering, restrictions under certain negative covenants agreed to
by the
Company under the Investment Agreement, the termination of the
Investment Agreement, risks that the Company may not be able to
deploy the proceeds of the Offering in the manner contemplated,
risks that VBR may not maintain its equity interest in the Company
following closing of the Offering, risks related to receipt of
regulatory approvals, risks related to delays in obtaining
governmental approvals or financing, risk of non-compliance with
planning and environmental permissions / licences, possible
variations in ore reserves, grade or recovery rates, risks related
to general economic and market conditions including credit risk,
potential changes to the interest rate, equity market risk and
commodity price risk, the timing and content of upcoming work
programs, actual results of proposed exploration activities, risks
related to the COVID-19 global pandemic and any variants of
COVID-19 which may arise, risks associated with the unplanned
departure of key personnel, environmental risks, 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, risks associated
with changes in national and local government regulation of mining
operations, tax rules and regulations, the effects of competition
in the markets in which the Company operates, judicial or
regulatory judgments and legal proceedings, operational and
infrastructure risks and the Company's anticipation of and success
in managing the foregoing risks.
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
Certain information contained in this announcement may have been
deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this announcement
.
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS AT JANUARY 31
(Expressed in Canadian dollars)
2022 2021
ASSETS
Current
Cash $ 6,922,704 $ 353,601
Marketable securities 1,574,506 1,004,307
Receivables 107,230 23,644
Deferred financing fees - 688,839
Deferred costs on conversion of royalty option - 151,037
Prepaid expenses 231,933 41,691
8,836,373 2,263,119
Deposits 42,448 36,976
Property, plant and equipment 6,437,175 6,371,852
Exploration and evaluation assets 20,772,029 9,507,859
$ 36,088,025 $ 18,179,806
LIABILITIES
Current
Accounts payable and accrued liabilities $ 613,178 $ 947,124
Lease liability 4,204 20,389
Commitment to issue shares 6,041,525
6,658,907 967,513
Lease liability 667 -
Debt - 5,993,803
Royalty option - 2,886,514
NSR liability 8,717,330 -
15,376,904 9,847,830
SHAREHOLDERS' EQUITY
Capital stock 56,846,350 40,737,065
Share subscriptions received in advance - 189,902
Capital contribution 2,007,665 2,007,665
Share-based payment reserve 630,265 846,212
Foreign currency translation reserve (174,123) 239,028
Deficit (38,599,036) (35,687,896)
20,711,121 8,331,976
$ 36,088,025 $ 18,179,806
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
YEARSED JANUARY 31
(Expressed in Canadian dollars)
2022 2021
EXPENSES
Accretion $ 15,764 $ 292,076
Advertising and promotion 372,910 134,790
Depreciation 25,507 87,034
Finance cost 3,895 9,717
Insurance 95,918 79,270
Office, miscellaneous and rent 81,533 36,708
Professional fees 1,027,481 305,633
Generative exploration costs 37,047 3,970
Regulatory and filing fees 129,633 30,567
Share-based compensation 80,554 304,204
Salaries, directors' fees and benefits 1,137,506 702,758
Total operating expenses (3,007,748) (1,986,727)
Interest income 1,099 4,537
Foreign exchange loss (346,883) (8,007)
Loss on disposal of property, plant and equipment (3,074) -
Unrealized gain on marketable securities 445,703 391,797
Realized loss on marketable securities (237) -
Loss for the year (2,911,140) (1,598,400)
Foreign currency translation (413,151) 89,032
Total comprehensive loss for the year $ (3,324,291) $ (1,509,368)
Basic and diluted loss per share $ (0.01) $ (0.01)
Weighted average number of common shares
outstanding: 267,601,284 135,320,393
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARSED JANUARY 31
(Expressed in Canadian dollars)
2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
$ ( 2,911,140 $ ( 1,598,400
Loss for the year ) )
Items not involving cash:
Accretion 15,764 292,076
Depreciation 25,507 87,034
Share-based compensation 80,554 304,204
Finance cost 3,895 9,717
Realized loss on marketable securities 237 -
Unrealized gain on marketable securities (445,703) (391,797)
Loss on disposal of property, plant and equipment 3,074 -
Foreign exchange loss 346,883 -
Changes in non-cash working capital items:
Increase in receivables (83,586) (116)
(Increase) decrease in prepaid expenses (137,354) 21,470
Increase in accounts payable and accrued liabilities 16,007 11,244
Net cash used in operating activities (3,085,862) (1,264,568)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (303,071) (315,779)
Acquisition of exploration and evaluation assets (3,683,498) (1,330,906)
Proceeds from the sale of marketable securities,
net 3,063 -
Increase in deposits (5,472) -
Net cash used in investing activities (3,988,978) (1,646,685)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from AIM listing 14,244,206 -
Proceeds from private placement financing - 1,177,500
Proceeds from fundraising received in advance
of share issue - 189,902
Proceeds from option and warrant exercises 1,135,500 1,134,500
Share issue costs (1,162,613) (49,427)
Increase in deferred financing fees - (344,211)
Conversion of royalty option costs (226,290) (49,174)
Lease payments (27,760) (88,338)
Net cash provided by financing activities 13,963,043 1,970,752
Impact of foreign exchange on cash (319,100) (11,151)
Change in cash during the year 6,569,103 (951,652)
Cash, beginning of the year 353,601 1,305,253
Cash, end of the year $ 6,922,704 $ 353,601
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)
Share Foreign
subscriptions Share-based currency
Number Capital received Capital payment translation
of shares stock in advance contribution reserve reserve Deficit Total
Balance at
January
31, 2020 86,768,585 $ 37,271,686 $ 1,175,000 $ 2,007,665 $ 732,930 $ 149,996 $ (34,280,418) $ 7,056,859
Foreign currency
translation - - - - - 89,032 - 89,032
Share issuance
pursuant
to private
placement
financing 47,050,000 2,352,500 (1,175,000) - - - - 1,177,500
Share issue
costs - (21,621) - - - - - (21,621)
Commitment to
issue
shares pursuant
to fundraising - - 189,902 - - - - 189,902
Warrant
exercises 16,100,000 1,134,500 - - - - - 1,134,500
Forfeiture and
expiry of
stock
options and
warrants - - - - (190,922) - 190,922 -
Share-based
compensation - - - - 304,204 - - 304,204
Loss for the
year - - - - - - (1,598,400) (1,598,400)
Balance at
January ( 35,687,896
31, 2021 149,918,585 40,737,065 189,902 2,007,665 846,212 239,028 ) 8,331,976
Foreign
currency
translation - - - - - (413,151) - (413,151)
Share
issuance
pursuant to
AIM listing 117,226,572 14,434,108 (189,902) - - - - 14,244,206
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
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