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 £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 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 £40.5 million ($66.8
million based on closest available exchange rate), including a
strategic investment by Vision Blue Resources of £25.0 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, 2022); 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 £0.07 ($0.12), raising gross proceeds of
£8,205,860 ($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' tonnes) |
Grade |
Contained Tin /Tin
Equivalent(000' tonnes) |
Increase in containedTin / Tin
equivalentfrom 2016 MRE |
Lower |
Indicated |
2,084 |
1.59% Sn |
33 |
10.2% |
Mine |
Inferred |
1,937 |
1.67% Sn |
32 |
129.8% |
|
|
|
|
|
|
Upper |
Indicated |
277 |
1.01% SnEq |
3 |
9.5% |
Mine |
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:
- 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
- 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 £40.5 million ($66.8 million based on the closing exchange rate
as at March 25, 2022) (the “Offering”) was announced, which
includes a £25.0 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 £0.18 ($0.30 for Canadian
investors) and a warrant to purchase one common share priced at
£0.27 ($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:
- 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”);
- 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
- 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, 2022 |
January 31, 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 (£8.2 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.
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
POSITIONAS 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
LOSSYEARS ENDED 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 FLOWSYEARS
ENDED JANUARY 31(Expressed in Canadian dollars) |
|
|
|
|
2022 |
|
|
|
2021 |
|
|
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
Loss for the year |
|
$ |
(2,911,140 |
) |
|
$ |
(1,598,400 |
) |
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’
EQUITYYEARS ENDED JANUARY 31(Expressed in
Canadian dollars) |
|
|
|
Number ofshares |
Capitalstock |
Sharesubscriptionsreceived inadvance |
Capitalcontribution |
Share-basedpaymentreserve |
Foreigncurrencytranslationreserve |
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 31, 2021 |
|
149,918,585 |
|
40,737,065 |
|
189,902 |
|
2,007,665 |
|
846,212 |
|
239,028 |
|
(35,687,896) |
|
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 |
For additional information please contact:
In North America:
Irene Dorsman at (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
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