TIDMCUSN

RNS Number : 9136C

Cornish Metals Inc.

24 June 2021

CORNISH METALS RELEASES FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE MONTHSING 30 APRIL 2021

June 24, 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 financial statements and management, discussion and analysis ("MD&A") for the three months ended 30 April 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 three months ended April 30, 2021 and for the period ending June 23, 2021

-- 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;

-- 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;

-- 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;

-- Commencement of phased exploration program at the United Downs exploration project in April 2021 to initially delineate further the known mineralized structures and conduct in-fill drilling;

-- Increases in Indicated Resource and Inferred Resource by 10.2% and 129.8%, respectively, for the Lower Mine in updated Mineral Resource Estimate for South Crofty mine published in June 2021 (see news release dated June 9, 2021); and

   --    Financing options continue to be considered to progress the South Crofty tin project. 

Richard Williams, CEO of Cornish Metals, stated, "I am delighted with what the Company has achieved in the last few months - a highly successful listing on AIM which surpassed our expectations, the conversion of the Osisko loan note into two royalties which endorsed the quality of the Company's projects in Cornwall, a substantial increase in mineral resource for South Crofty and the commencement of the exploration programme at United Downs. I look forward to reporting imminently on the initial results of that exploration programme once the assays from the first few drill holes have been assessed.

"Longer term, we are continuing to assess 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."

Key financial metrics for the first quarter

 
                                         Three months ended 
 (Expressed in Canadian dollars)    30 April 2021   30 April 2020 
                                   --------------  -------------- 
 
 Total operating expenses                 894,549         401,968 
                                   --------------  -------------- 
 Loss for the period                    1,301,049         398,893 
                                   --------------  -------------- 
 Net cash used in operating 
  activities                              908,981         291,073 
                                   --------------  -------------- 
 Net cash used in investing 
  activities                              762,856         526,047 
                                   --------------  -------------- 
 Net cash provided by financing 
  activities                           13,226,816       1,119,335 
                                   --------------  -------------- 
 Cash at end of the financial 
  period                               11,511,900       1,609,018 
                                   --------------  -------------- 
 

Outlook

The proceeds from the recently completed AIM listing are to be used to conduct a drill program at the United Downs exploration project, to conduct initial field work on other high priority exploration targets within transport distance of South Crofty, and for general working capital purposes . Management believes that, subject to drilling success, the proceeds from the AIM listing will result in the Company being fully funded to the completion of a maiden JORC resource at the United Downs exploration project.

Within 12 to 18 months of the date of the AIM listing, the Company plans to:

-- Commence an 18 month 9,100 meter initial drilling program at United Downs to advance the project to Inferred Mineral Resource definition, fully funded from the proceeds arising from the AIM listing;

-- Test three lodes with a 1,000 meter of strike length to a depth of 500 meter in the initial phase. Management believes there are up to seven further mineralized lode structures with a total resource potential of between four million tons and ten million tons;

-- Subject to the outcome of the initial drilling program, undertake a subsequent in-fill drilling program at United Downs to advance the project to a feasibility study within three years; and

-- Evaluate other near-surface, high potential, exploration targets within transport distance of the planned processing plant site.

In the longer term, the Company intends to develop the South Crofty tin project as and when economic conditions and cashflows are supportive .

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.

For additional information please contact:

In North America:

Irene Dorsman at +1 (604) 200 6664 or by e-mail at irene@cornishmetals.com

 
 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 
 
 Blytheweigh 
  (Financial PR/IR-London)    Tel:              +44 207 138 3204 
  Tim Blythe                                    tim.blythe@blytheweigh.com 
  Megan Ray                                     megan.ray@blytheweigh.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 with respect to the continued listing and trading of the Common Shares on the TSX-V and AIM; and the expected commencement of future exploration programs at the United Downs and the South Crofty Mine.

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; 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

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

(Unaudited - Prepared by Management)

(Expressed in Canadian dollars)

 
                                                                      April 30, 2021               January 31, 2021 
------------------------------------------------------  ----------------------------  ----------------------------- 
 
 ASSETS 
 
 Current 
        Cash                                                            $ 11,511,900                      $ 353,601 
        Marketable securities                                              1,004,307                      1,004,307 
        Receivables                                                           71,038                         23,644 
       Deferred financing fees                                                     -                        688,839 
       Deferred costs on conversion of royalty option                              -                        151,037 
        Prepaid expenses                                                     226,126                         41,691 
                                                                          12,813,371                      2,263,119 
 
 Deposits                                                                     53,191                         36,976 
 Property, plant and equipment                                             6,226,709                      6,371,852 
 Exploration and evaluation assets                                         9,723,159                      9,507,859 
 
                                                                        $ 28,816,430                   $ 18,179,806 
======================================================  ============================  ============================= 
 
 
 LIABILITIES 
 
 Current 
        Accounts payable and accrued liabilities                           $ 594,062                      $ 947,124 
       Lease liability                                                         4,339                         20,389 
                                                                             598,401                        967,513 
 Lease liability                                                               3,800                              - 
 Debt                                                                              -                      5,993,803 
 Royalty option                                                                    -                      2,886,514 
 NSR liability                                                             8,419,876                              - 
                                                                           9,022,077                      9,847,830 
 
 SHAREHOLDERS' EQUITY 
        Capital stock                                                     53,849,099                     40,737,065 
       Share subscriptions received in advance                                     -                        189,902 
       Capital contribution                                                2,007,665                      2,007,665 
        Share-based payment reserve                                          898,008                        846,212 
       Foreign currency translation reserve                                   28,526                        239,028 
       Deficit                                                          (36,988,945)                   (35,687,896) 
 
                                                                          19,794,353                      8,331,976 
 
                                                                        $ 28,816,430                   $ 18,179,806 
======================================================  ============================  ============================= 
 

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited - Prepared by Management)

(Expressed in Canadian dollars)

 
                                                         Three months ended 
                                                        April 30,           April 30, 
                                                             2021                2020 
--------------------------------------------  -------------------  ------------------ 
 
 EXPENSES 
      Accretion                                          $ 15,764            $ 60,380 
     Advertising and promotion                             52,925              49,874 
      Depreciation                                         22,109              22,388 
     Finance cost                                           3,895               4,545 
      Insurance                                            21,784              19,545 
      Office, miscellaneous and rent                       21,883              11,159 
      Professional fees                                   412,674              49,939 
      Regulatory and filing fees                           68,883               8,379 
     Share-based compensation                              51,796                   - 
     Salaries, directors' fees and benefits               222,836             175,759 
 
 Total operating expenses                               (894,549)           (401,968) 
 
    Interest income                                           192               3,259 
    Foreign exchange loss                               (406,692)               (184) 
 
 Loss for the period                                  (1,301,049)           (398,893) 
 
     Foreign currency translation                       (210,502)              34,435 
 Total comprehensive loss for the period            $ (1,511,551)         $ (364,458) 
============================================  ===================  ================== 
 
 Basic and diluted loss per share                        $ (0.01)            $ (0.00) 
 
 Weighted average number of common shares 
  outstanding:                                        248,501,072         132,773,030 
============================================  ===================  ================== 
 

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited - Prepared by Management)

(Expressed in Canadian dollars)

 
                                                                                For the three months 
                                                                                        ended 
                                                                              April 30,                April 30, 
                                                                                   2021                     2020 
-----------------------------------------------------------------  --------------------  ----------------------- 
 
 CASH FLOWS FROM OPERATING ACTIVITIES 
      Loss for the period                                                 $ (1,301,049)              $ (398,893) 
      Items not involving cash: 
          Accretion                                                              15,764                   60,380 
            Depreciation                                                         22,109                   22,388 
          Share-based compensation                                               51,796                        - 
          Finance cost                                                            3,895                    4,545 
          Foreign exchange loss                                                 406,692                      184 
 
      Changes in non-cash working capital items: 
            Decrease (increase) in receivables                                 (47,393)                    1,858 
            Decrease (increase) in prepaid expenses                            (54,245)                   24,316 
            Decrease in accounts payable and accrued liabilities                (6,550)                  (5,851) 
 
      Net cash used in operating activities                                 (908,981)                  (291,073) 
 
 
 CASH FLOWS FROM INVESTING ACTIVITIES 
     Acquisition of property, plant and equipment                              (75,671)                (315,165) 
      Acquisition of exploration and evaluation assets                        (670,970)                (210,821) 
      Increase in deposits                                                     (16,215)                     (61) 
 
      Net cash used in investing activities                                   (762,856)                (526,047) 
 
 CASH FLOWS FROM FINANCING ACTIVITIES 
     Proceeds from AIM listing                                               14,244,206                        - 
     Proceeds from private placement financing                                        -          1,177,500 
     Proceeds from warrant exercises                                            184,750                        - 
     Share issue costs                                                      (1,066,126)                 (33,971) 
     Conversion of royalty option costs                                       (111,730)                        - 
     Lease payments                                                            (24,284)                 (24,194) 
 
      Net cash provided by financing activities                              13,226,816                1,119,335 
 
 Impact on foreign exchange on cash                                           (396,680)                    1,550 
 
 Change in cash during the period                                      11,158,299                        303,765 
 Cash, beginning of the period                                                  353,601                1,305,253 
 
 Cash, end of the period                                                   $ 11,511,900              $ 1,609,018 
=================================================================  ====================  ======================= 
 
 Cash paid during the period for interest                           $ -                   $ - 
=================================================================  ====================  ======================= 
 
 Cash paid during the period for income taxes                       $ -                   $ - 
=================================================================  ====================  ======================= 
 

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

THREE MONTHS ENDED APRIL 30

(Unaudited - Prepared by Management)

(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 
  31, 2020           86,768,585    $ 37,271,686     $ 1,175,000    $ 2,007,665     $ 732,930     $ 149,996           $ (34,280,418)     $ 7,056,859 
   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) 
   Forfeiture of 
    stock 
    options                   -               -               -              -      (28,449)             -                   28,449               - 
   Foreign 
    currency 
    translation               -               -               -              -             -        34,435                        -          34,435 
   Loss for the 
    period                    -               -               -              -             -             -                (398,893)       (398,893) 
-----------------  ------------  --------------  --------------  -------------  ------------  ------------  -----------------------  -------------- 
 Balance at April 
  30, 2020          133,818,585    $ 39,602,565             $ -    $ 2,007,665     $ 704,481     $ 184,431           $ (34,650,862)     $ 7,848,280 
-----------------  ------------  --------------  --------------  -------------  ------------  ------------  -----------------------  -------------- 
 
 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 
    Share 
     issuance 
     pursuant to 
     AIM listing    117,226,572      14,434,108       (189,902)              -             -             -                        -      14,244,206 
    Share issue 
     costs                    -     (1,506,824)               -              -             -             -                        -     (1,506,824) 
    Warrant 
     exercises        2,275,000         184,750               -              -             -             -                        -         184,750 
    Share-based 
     compensation             -               -               -              -        51,796             -                        -          51,796 
    Foreign 
     currency 
     translation              -               -               -              -             -     (210,502)                        -       (210,502) 
   Loss for the 
    period                    -               -               -              -             -             -          (1,301,049)        (1,301,049) 
-----------------  ------------  --------------  --------------  -------------  ------------  ------------  -----------------------  -------------- 
 Balance at April 
  30, 2021          269,420,157   $ 53 ,849,099             $ -    $ 2,007,665     $ 898,008      $ 28,526       $ (36,988,945)         $19,794,353 
-----------------  ------------  --------------  --------------  -------------  ------------  ------------  -----------------------  -------------- 
 

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