TIDMCUSN
RNS Number : 5179D
Cornish Metals Inc.
22 June 2023
CORNISH METALS RELEASES UNAUDITED FINANCIAL STATEMENTS AND
MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE MONTHSING 30
APRIL 2023
Vancouver, June 21, 2023
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 unaudited financial statements and
management, discussion and analysis ("MD&A") for the three
months ended April 30, 2023. 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 three months ended April 30, 2023 and for the
period ending June 21, 2023
(All figures expressed in Canadian dollars unless otherwise
stated)
-- Drill program nearing completion at South Crofty to collect
samples for metallurgical testwork as part of the Feasibility
Study, with drilling expected to be finished by the end of June
2023;
-- Construction of the water treatment plant ("WTP")
substantially complete with commencement of dewatering expected
later in summer 2023 at a construction cost estimated to be between
GBP6.5 million and GBP7.0 million ($11.1 million and $11.9 million
at quarter end exchange rate);
-- First submersible pump currently being installed in New Cook
Kitchen's ("NCK") shaft with the second pump expected to commence
installation by the end of June 2023;
-- Two single drum winders have been ordered for the shaft
re-access work, with the main winder due on site in October 2023
and the emergency winder due for delivery in August 2023;
-- Remedial work underway on the south headframe above NCK shaft
in readiness for the installation of the main winder;
-- Work on the Feasibility Study continues with completion planned by the end of 2024; and
-- Further digitization of historic assay information and data
from the metallurgical drilling program is being incorporated into
an updated Mineral Resource Estimate with a targeted release date
for the end of September 2023;
Richard Williams, CEO of Cornish Metals, stated, "It is just
over a year since the GBP40.5m financing led by Vision Blue
Resources completed, and we are pleased with the excellent progress
that has been made during this time. Dewatering of the mine is on
track for commencing later this summer and other aspects of the
project are well underway.
"With the completion of the metallurgical drill programme this
month, we look forward to continuing the exploration programme of
the Wide Formation at Carn Brea in the coming weeks to demonstrate
the Mineral Resource potential of this target."
Financial highlights for the three months ended April 30, 2023
and April 30, 2022
Three months ended (unaudited)
April 30, April 30,
2023 2022
----------------- --------------
(Expressed in Canadian dollars)
----------------- --------------
Total operating expenses $924,120 $627,115
----------------- --------------
Loss for the period $206,802 $979,427
----------------- --------------
Net cash used in operating activities $1,030,901 $625,384
----------------- --------------
Net cash used in investing activities $7,027,003 $1,184,673
----------------- --------------
Net cash used in financing activities $723 $555,449
----------------- --------------
Cash at end of the period $49,078,875 $4,286,535
----------------- --------------
-- 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;
-- Expenditure of $3.4 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 $3.4 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;
-- Interest income of $388,384 arising from increased interest
rates being received on higher cash balance following the Offering;
and
-- Recognition of foreign currency translation gain of $3.0
million for those assets located in the UK when translated into
Canadian dollars for presentational purposes .
Construction progress of water treatment plant at South
Crofty
-- Construction progress of the WTP at South Crofty has included
various enabling works, including completion of the treated water
discharge duct from the WTP and the concrete foundation pad for the
WTP itself. The pipelines carrying water from the submersible pumps
in NCK shaft to the WTP are also complete;
-- The WTP comprises nine reaction tanks for increasing and
decreasing the pH to precipitate the various metals in solution,
and six inclined plate settling tanks (lamella clarifiers) to
remove the precipitated solids. All the tanks and clarifiers have
been installed, as have the structural steel supports and walkways
which provide access to the WTP;
-- The installation of mechanical, electrical and
instrumentation equipment is expected to be completed in the first
half of August 2023. Reagent storage, make-up and dosing equipment
have been supplied as complete packages from specialist
manufacturers;
-- The building housing the high voltage power
supply/sub-station and the variable speed drives required to
operate the pumps is complete, and the 11kV power supply is
scheduled to be in place by the end of June 2023. A turbine will be
added ahead of the discharge point that will generate up to 15% of
the electricity required to operate the WTP;
-- Wet commissioning of the WTP is expected to commence in
August 2023, with commencement of mine dewatering expected shortly
thereafter; and
-- Overall, the cost of construction for the WTP is expected to
be between GBP6.5 million and GBP7.0 million ($11.1 million and
$11.9 million at quarter end exchange rate).
Outlook
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. 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 early works on-site in advance of a potential
construction decision .
Within 30 months from the closing of the Offering, the Company's
plans are as follows:
-- Construct WTP and commence dewatering during summer 2023 and
thereafter complete the dewatering of the mine within 18
months;
-- Complete a drill program for metallurgical studies and to
produce an updated JORC (2012) compliant Mineral Resource estimate
for a Feasibility Study;
-- Complete a Feasibility Study using all reasonable commercial efforts by the end of 2024; and
-- Commence basic and detailed engineering studies, construction
of the processing plant, refurbishment of underground facilities
and other on-site early works.
A follow up drill program is also being planned to determine the
continuity of mineralization and to better define the geometry and
extent of the Wide Formation at Carn Brea. This follow-up program
is expected to commence at the beginning of July 2023, as soon as
the metallurgical drill program as described above is
completed.
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
Jay Ashfield
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"
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)
April 30, January 31,
2023 2023
------------------------------------------------- ----------------------------- ------------------------
ASSETS
Current
Cash $ 49,078,875 $ 55,495,232
Marketable securities 2,774,121 2,718,936
Receivables 1,184,781 656,407
Prepaid expenses 552,251 371,977
53,590,028 59,242,552
Deposits 85,554 54,165
Property, plant and equipment 13,452,835 9,721,352
Exploration and evaluation assets 38,418,329 33,088,129
$ 105,546,746 $ 102,106,198
================================================= ============================= ========================
LIABILITIES
Current
Accounts payable and accrued liabilities $ 3,022,646 $ 2,494,642
Lease liability - 642
3,022,646 2,495,284
NSR liability 9,306,070 9,149,804
12,328,716 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 384,758 384,758
Foreign currency translation reserve 2,314,760 (648,962)
Deficit (39,883,805) (39,677,003)
93,218,030 90,461,110
$ 105,546,746 $ 102,106,198
================================================= ============================= ========================
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND
COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Canadian dollars)
Three months ended
April 30, April 30,
2023 2022
--------------------------------------------- -------------------- ---------------------
EXPENSES
Travel and marketing $ 89,590 $ 110,878
Depreciation - 443
Insurance 172,430 33,509
Office, miscellaneous and rent 51,613 28,978
Professional fees 200,735 169,597
Generative exploration costs 2,607 333
Regulatory and filing fees 33,274 21,244
Salaries, directors' fees and benefits 373,871 262,133
Total operating expenses (924,120) (627,115)
Interest income 388,384 743
Foreign exchange gain (loss) 370,892 (353,055)
Unrealized loss on marketable securities (41,958) -
Loss for the period (206,802) (979,427)
Foreign currency translation 2,963,722 (1,152,758)
Total comprehensive income (loss) for the
period $ 2,756,920 $ (2,132,185)
============================================= ==================== =====================
Basic and diluted income (loss) per share $ 0.01 $ (0.01)
Weighted average number of common shares
outstanding: 535,265,094 285,850,157
============================================= ==================== =====================
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Canadian dollars)
For the three months
ended
April 30, April 30,
2023 2022
----------------------------------------------------------------- -------------------- -------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the period $ (206,802) $ (979,427)
Items not involving cash:
Depreciation - 443
Unrealized loss on marketable securities 41,958 -
Foreign exchange loss (gain) (370,892) 353,055
Changes in non-cash working capital items:
Increase in receivables (528,374) (33,218)
Increase in prepaid expenses (167,194) (28,727)
Increase in accounts payable and accrued liabilities 200,403 62,490
Net cash used in operating activities (1,030,901) (625,384)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (3,179,655) (2,661)
Acquisition of exploration and evaluation assets (3,818,598) (1,171,500)
Increase in deposits (28,750) (10,512)
Net cash used in investing activities (7,027,003) (1,184,673)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from fundraising received in advance
of share issue - 30,000
Increase in deferred financing fees - (584,359)
Lease payments (723) (1,090)
Net cash used in financing activities (723) (555,449)
Impact of foreign exchange on cash 1,642,270 (270,663)
Change in cash during the period (6,416,357) (2,636,169)
Cash, beginning of the period 55,495,232 6,922,704
Cash, end of the period $ 49,078,875 $ 4,286,535
================================================================= ==================== ===================
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
subscriptions Share-based currency
Number received Capital payment translation
of shares Amount in advance contribution reserve reserve Deficit Total
---------------- ------------ -------------- -------------- ------------- ------------ ------------- ----------------------- ---------------
Balance at
January $ ( 38,599,036
31, 2022 285,850,157 $ 56,846,350 $ - $ 2,007,665 $ 630,265 $ (174,123) ) $ 20,711,121
Commitment to
issue
shares
pursuant to
fundraise - - 30,000 - - - - 30,000
Foreign
currency
translation - - - - - (1,152,758) - (1,152,758)
Loss for the
period - - - - - - (979,427) (979,427)
---------------- ------------ -------------- -------------- ------------- ------------ ------------- ----------------------- ---------------
Balance at
April
30, 2022 285,850,157 $ 56 ,846,350 $ 30,000 $ 2,007,665 $ 630,265 $(1,326,881) $ (39,578,463) $ 18,608,936
---------------- ------------ -------------- -------------- ------------- ------------ ------------- ----------------------- ---------------
Balance at
January $ ( 39,677,003
31, 2023 535,020,712 $128,377,152 $ 17,500 $ 2,007,665 $ 384,758 $ (648,962) ) $ 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
---------------- ------------ -------------- -------------- ------------- ------------ ------------- ----------------------- ---------------
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June 22, 2023 02:00 ET (06:00 GMT)
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