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Cornish Metals Releases Unaudited Financial Statements and Management’s Discussion and Analysis for the Nine Months Ended 30 September 2024

VANCOUVER, British Columbia, Nov. 21, 2024 (GLOBE NEWSWIRE) — Cornish Metals Inc. (TSX-V/AIM: CUSN) (“Cornish Metals” or the “Company”), a mineral exploration and development company focused on its 100% owned and permitted South Crofty tin project 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 nine months ended September 30, 2024. The reports are available under the Company’s profile on SEDAR+ (www.sedarplus.ca) and on the Company’s website (www.cornishmetals.com).

Highlights for the nine months ended September 30, 2024 and for the period ending November 20, 2024

(All figures expressed in Canadian dollars unless otherwise stated)

  • Appointment of Don Turvey as Chief Executive Officer (“CEO”) (news release dated August 11, 2024):
    • Mr. Turvey appointed as CEO and an executive director of the Company effective October 9, 2024, and who has since relocated to Cornwall where he is based;
    • Mr. Turvey is an experienced mining executive with more than 40 years of experience, including successfully securing funding and advancing new projects and historic mines through to production;
    • Upon Mr. Turvey’s appointment, Ken Armstrong returned to the position of non-executive director and continues as Chair of the Company’s Audit Committee;
    • Patrick Anderson returned to the position of non-executive Chair of the Board of Directors of the Company effective September 30, 2024.
  • US$9.1 million (equivalent to £7.0 million) credit facility arranged with Vision Blue Resources Limited (“Vision Blue”) on October 15, 2024 (news release dated October 15, 2024):
    • Non-dilutive secured credit facility to support the continued development of South Crofty;
    • Proceeds of the credit facility are expected to be used for the Company’s general operating and corporate purposes.
  • Appointment of Endeavour Financial (“Endeavour”) as the Company’s financial adviser on October 9, 2024 (news release dated October 9, 2024):
    • Endeavour appointed as financial adviser to secure project financing for the construction of South Crofty and advise the Company on funding options on the basis of the completed PEA and ongoing engineering studies;
    • Various sources of funding will be assessed to deliver an optimal project financing solution in the second half of 2025.
  • South Crofty Preliminary Economic Assessment (“PEA”) completed, validating the Project’s economic viability (news release dated April 30, 2024):
    • After-tax Net Present Value (“NPV”) of US$201 million and Internal Rate of Return (“IRR”) of 29.8%;
    • Average annual tin production of over 4,700 tonnes for years two through six, totalling 49,310 tonnes over a 14-year Life of Mine (“LOM”);
    • Total after-tax cash flow of approximately US$626 million from start of production.
  • Near-mine Exploration Target at South Crofty (news release dated November 13, 2024):
    • Exploration Target points to potential additional mineralisation upside of 6Mt to 13Mt, at a tin grade of 0.5% to 1.8%, above the current South Crofty Mineral Resource in the Lower Mine area;
    • Potential to define additional mineralisation, which could expand the current Mineral Resource at the project.
  • Commencement of second phase of refurbishment of New Cook’s Kitchen (“NCK”) shaft (news release dated July 10, 2024):
    • Installation of the Phase 2 work platform, enabling faster replacement of old shaft timbers with new steel guides;
    • Winders and cages installed, fully commissioned and in operation, and certified to allow for safe transport of equipment and workers within NCK shaft;
    • Rephasing shaft refurbishment improves the functionality of NCK shaft and enables larger equipment to access the mine at an earlier stage in its re-development;
    • Shaft refurbishment is progressing and now forecast to be completed in Q4-2025 alongside mine dewatering to the 400-fathom level, with no expected impact to the overall project schedule.
  • Mine dewatering continues with the submersible pumps and Water Treatment Plant (“WTP”) operating to specifications (news release dated July 10, 2024):
    • Water level in NCK shaft being maintained at approximately 280 meters below surface with the rate of dewatering being reduced to allow shaft refurbishment and dewatering to proceed concurrently;
    • Treated water being discharged to the Red River continues to meet the standards permitted by the Environment Agency.
  • Final drilling results from Wide Formation exploration program (news release dated August 18, 2024):
    • The completed 14-hole / 9,000-meter drilling program successfully tested the geometry and continuity of tin mineralization within a 2,500 meter by 800 meter extent of the Wide Formation;
    • Drilling also intersected tin mineralization associated with the Great Flat Lode and the Great Flat Lode Splay, as well as the interpreted eastern extension of the Great Condurrow Mine’s Main Lode, and several strongly mineralized steeply dipping zones.
  • Purchase of land totalling 7.7 acres located immediately adjacent to South Crofty surface infrastructure (news release dated May 21, 2024):
    • The purchased land removes reliance on existing right-of-passage agreements, providing the Company with direct access to all surface infrastructure as well as additional space for future site works, opportunities for potential operating cost savings, renewable energy initiatives and improved overall property security.
  • Sale of Mactung and Cantung royalties for US$4.5 million in cash consideration (news release dated July 21, 2024):
    • Completion of disposal of Company’s royalty interests on the Mactung and Cantung tungsten projects located in Northern Canada to Elemental Altus Royalties Corp. (“Elemental Altus”);
    • Initial cash consideration of US$3.0 million received on August 1, 2024, with the balance of US$1.5 million due by August 1, 2025.
  • Sale of Nickel King property announced for a total consideration of up to $8.0 million (news release dated June 16, 2024):
    • Entered into a binding letter of intent with Northera Resources Ltd. (“Northera”) for the sale of the Company’s 100% interest in the Nickel King Property for a total consideration of up to $8 million;
    • Initial cash consideration of $250,000 received to date.
  • Samantha Hoe-Richardson joined the Board as independent non-executive director effective January 8, 2024 (news release dated January 8, 2024).
  • As at November 19, 2024 the Company’s cash position was $12.5 million (equivalent to £7.1 million).

Don Turvey, CEO and Director of Cornish Metals, stated: “I am pleased to have joined Cornish Metals and will be working closely with the management and project teams to take South Crofty to production, to bring responsible tin mining back to Cornwall and to generate value by unlocking the project’s potential as a long-term supplier of tin needed for electrical applications in the UK and Europe. Activity levels on-site are high as the NCK shaft refurbishment and mine dewatering progress, further derisking the project. We have also commenced the project finance process to secure the optimal funding solution for the construction of South Crofty.”

Financial highlights for the nine months ended September 30, 2024 and October 31, 2023

  Nine months ended (unaudited)
  September 30, 2024 October 31, 2023  
(Expressed in Canadian dollars)    
Total operating expenses 6,495,774 3,281,200  
Profit (loss) for the period 482,935 (1,571,831 )
Net cash used in operating activities 4,024,494 1,761,034  
Net cash used in investing activities 19,339,613 23,335,112  
Net cash used in financing activities 228,966 723  
Cash at end of the period 3,301,452 31,579,386  
  • Increase in operating expenses impacted by higher travel and marketing expenditure arising from increased investor & media engagement and termination settlement payable to the former CEO;
  • Gain of $4.7 million arising from the sale of the Mactung and Cantung royalties, of which US$1.5 million is deferred consideration due by August 2025;
  • Expenditure of $2.2 million on new or replacement equipment for the mine, including the final payments for the permanent pumps for the underground pump station, cages and the new winders, and associated commissioning costs;
  • Expenditure of $2.8 million on land adjacent to the surface infrastructure at South Crofty;
  • Dewatering costs of $4.2 million for power, reagents, sludge disposal and maintenance of the WTP;
  • Other project related expenditure of $9.2 million relating to the advancement of South Crofty, primarily relating to the ongoing project engineering studies and NCK shaft re-access & refurbishment;
  • Costs of $1.6 million incurred for the completion of the exploration program at the Wide Formation; and
  • Cash decreased by $23.6 million to $3.3 million at the period end mainly due to ongoing development activities at the South Crofty tin project.

The Company changed its financial year end from January 31 to December 31 with effect from December 31, 2023 with the result that the current period of reporting is the nine months ended September 30, 2024. The comparative period of reporting is the nine months ended October 31, 2023.

The credit facility arranged with Vision Blue, as described above, has a maturity date of 31 March 2025. As a consequence, additional financing will be required before the end of March 2025.

Outlook

As described above, the Company continues to advance and derisk the South Crofty tin project towards production. By the end of December 2025, the Company’s objectives are as follows:

  • Complete dewatering of South Crofty mine and refurbishment of NCK shaft;
  • Advance basic and detailed project engineering studies;
  • Place deposits for long lead items of plant and equipment;
  • Commence early project works, including initial construction of the groundworks for the processing plant; and
  • Arrange project financing for the South Crofty tin project.

ABOUT CORNISH METALS

Cornish Metals is a dual-listed mineral exploration and development company (AIM and TSX-V: CUSN) that is advancing the South Crofty tin project towards production. South Crofty:

  • Is a historical, high-grade, underground tin mine located in Cornwall, United Kingdom and benefits from existing mine infrastructure including multiple shafts that can be used for future operations;
  • Is fully permitted to commence underground mining (valid to 2071), construct new processing facilities and for all necessary site infrastructure;
  • Has a 2024 Preliminary Economic Assessment that validates the Project’s potential (see news release dated April 30, 2024 and the Technical Report entitled “South Crofty PEA”):
    • US$201 million after-tax NPV8% and 29.8% IRR
    • 3-year after-tax payback
    • 4,700 tonnes average annual tin production in years two through six
    • Life of mine all-in sustaining cost of US$13,660 /tonne of payable tin
    • Total after-tax cash flow of US$626 million from start of production
  • Would be the only primary producer of tin in Europe or North America. Tin is a Critical Mineral as defined by the UK, American, and Canadian governments as it is used in almost all electronic devices and electrical infrastructure. Approximately two-thirds of the tin mined today comes from China, Myanmar and Indonesia;
  • Benefits from strong local community, regional and national government support with a growing team of skilled people, local to Cornwall, and could generate up to 320 direct jobs.

The 2024 Preliminary Economic Assessment for South Crofty is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorised as Mineral Reserves. There is no certainty that the 2024 Preliminary Economic Assessment will be realised. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.

TECHNICAL INFORMATION

This news release has been reviewed and approved by Mr. Owen Mihalop, MCSM, BSc (Hons), MSc, FGS, MIMMM, CEng, Chief Operating Officer for Cornish Metals Inc. who is the designated Qualified Person under NI 43-101 and the AIM Rules for Companies and a Competent Person as defined under the JORC Code (2012). 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

“Don Turvey”
Don Turvey

Engage with us directly at our investor hub. Sign up at: https://investors.cornishmetals.com/link/0y5Aly.

For additional information please contact:

Cornish Metals Fawzi Hanano
Irene Dorsman
[email protected]
[email protected]
Tel: +1 (604) 200 6664
     
SP Angel Corporate Finance LLP
(Nominated Adviser & Joint Broker)
Richard Morrison
Charlie Bouverat
Grant Barker
Tel: +44 203 470 0470
     
Cavendish Capital Markets Limited
(Joint Broker)
Derrick Lee
Neil McDonald
Tel: +44 131 220 6939
     
Hannam & Partners
(Financial Adviser)
Matthew Hasson
Andrew Chubb
Jay Ashfield
[email protected]
Tel: +44 207 907 8500
     
BlytheRay
(Financial PR)
Tim Blythe
Megan Ray
[email protected]
Tel: +44 207 138 3204
     

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 certain “forward-looking information” and “forward-looking statements” (collectively, “forward-looking statements”). Forward-looking statements include predictions, projections, outlook, guidance, estimates and forecasts and other statements regarding future plans and operations, the realisation, cost, timing and extent of mineral resource or mineral reserve estimates, estimation of commodity prices, currency exchange rate fluctuations, estimated future exploration expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, requirements for additional capital and the Company’s ability to obtain financing when required and on terms acceptable to the Company, future or estimated mine life and other activities or achievements of Cornish Metals, including but not limited to: the expected use of proceeds from the secured credit facility with Vision Blue; the balance of the cash consideration due to Cornish in respect of the sale of the Mactung and Cantung royalty interests; mineralisation at South Crofty, mine dewatering and construction requirements; the development, operational and economic results of the preliminary economic assessment, including cash flows, capital expenditures, development costs, extraction rates, recovery rates, mining cost estimates and returns; estimation of mineral resources; statements about the estimate of mineral resources and production of minerals; magnitude or quality of mineral deposits; anticipated advancement of the South Crofty project mine plan; exploration potential and project growth opportunities for the South Crofty tin project and other Cornwall mineral properties, the Company’s ability to evaluate and develop the South Crofty tin project and other Cornwall mineral properties, strategic vision of Cornish Metals and expectations regarding the South Crofty mine, timing and results of projects mentioned. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “forecast”, “expect”, “potential”, “project”, “target”, “schedule”, “budget” and “intend” and statements that an event or result “may”, “will”, “should”, “could”, “would” or “might” occur or be achieved and other similar expressions and includes the negatives thereof. All statements other than statements of historical fact included in this news release, are forward-looking statements that involve various risks and uncertainties and there can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements.

Forward-looking statements 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 availability of financing; the timing and content of upcoming work programmes; actual results of proposed exploration activities; possible variations in Mineral Resources or grade; outcome of any future studies; projected dates to commence mining operations; 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. The list is not exhaustive of the factors that may affect Cornish’s forward-looking statements.

Cornish Metals’ forward-looking statements are based on the opinions and estimates of management and reflect their current expectations regarding future events and operating performance and speak only as of the date such statements are made. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ from those described in forward- looking statements, there may be other factors that cause such actions, events or results to differ materially from those anticipated. There can be no assurance that forward-looking statements will prove to be accurate and accordingly readers are cautioned not to place undue reliance on forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cornish Metals does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other than as required by applicable law.

Caution regarding non-IFRS measures

This news release contains certain terms or performance measures commonly used in the mining industry that are not defined under International Financial Reporting Standards (“IFRS”), including “all-in sustaining costs”. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS and should be read in conjunction with Cornish Metals’ consolidated financial statements and Management Discussion and Analysis, available on its website and on SEDAR+ at www.sedarplus.ca.

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)

     
  September 30,
2024
December 31,
2023
     
ASSETS    
Current    
Cash $ 3,301,452     $ 25,791,552  
Marketable securities   2,927,438       2,665,454  
Receivables   2,508,031       1,112,638  
Prepaid expenses   439,722       591,264  
Deferred financing fees   510,810       135,242  
    9,687,453       30,296,150  
     
Deposits   82,592       85,954  
Property, plant and equipment   27,987,102       23,788,325  
Exploration and evaluation assets   73,403,237       50,050,323  
     
  $ 111,160,384     $ 104,220,752  
     
     
LIABILITIES    
     
Current    
Accounts payable and accrued liabilities $ 4,254,516     $ 5,063,940  
Deferred income   150,000        
    4,404,516       5,063,940  
NSR liability   9,250,363       9,064,817  
    13,654,879       14,128,757  
SHAREHOLDERS’ EQUITY    
Capital stock   128,394,652       128,394,652  
Capital contribution   2,007,665       2,007,665  
Share-based payment reserve   1,084,152       711,690  
Foreign currency translation reserve   7,927,259       1,369,146  
Deficit   (41,908,223 )     (42,391,158 )
     
    97,505,505       90,091,995  
     
  $ 111,160,384     $ 104,220,752  
               
               
     
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

(Unaudited)
(Expressed in Canadian dollars)

     
  Three months ended Nine months ended
  September 30,
2024
October 31,
2023
September 30,
2024
October 31,
2023
         
EXPENSES        
Travel and marketing $ 216,556     $ 242,737     $ 664,044     $ 488,797  
Insurance   197,445       164,843       596,952       511,899  
Office, miscellaneous and rent   48,515       40,883       166,722       148,925  
Professional fees   523,478       257,854       1,332,245       794,167  
Generative exploration expense   125       200       5,829       5,433  
Regulatory and filing fees   26,358       17,749       78,019       73,171  
Share-based compensation   93,098       104,587       223,897       130,136  
Salaries, directors’ fees and benefits   828,406       410,795       3,428,066       1,128,672  
         
Total operating expenses   (1,933,981 )     (1,239,648 )     (6,495,774 )     (3,281,200 )
         
Interest income   61,950       649,403       470,504       1,456,697  
Foreign exchange gain   350,703       13,101       322,663       394,980  
Gain (loss) on receipt of non-refundable deposit   (6,328 )           84,968        
Impairment reversal of royalties   1,500,000             1,500,000        
Gain on disposal of royalties   4,675,904             4,675,904        
Unrealized loss on marketable securities   (39,056 )     (112,276 )     (75,330 )     (147,296 )
         
Profit (loss) before income taxes   4,609,192       (689,420 )     482,935       (1,576,819 )
Income tax recovery         4,988             4,988  
Profit (loss) for the period   4,609,192       (684,432 )     482,935       (1,571,831 )
         
Foreign currency translation   4,166,641       (1,010,502 )     6,558,113       1,619,065  
Total comprehensive income (loss) for the period $ 8,775,833     $ (1,694,934 )   $ 7,041,048     $ 47,234  
         
Basic and diluted income (loss) per share $ 0.02     $ (0.00 )   $ 0.01     $ 0.00  
         
Weighted average number of common shares outstanding:   535,270,712       535,270,712       535,270,712       535,268,881  
                               
                               
   
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS        

(Unaudited)
(Expressed in Canadian dollars)

   
  For the nine months ended
  September 30,
2024
October 31,
2023
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Profit (loss) for the period $ 482,935     $ (1,571,831 )
Items not involving cash:    
Share-based compensation   223,897       130,136  
Unrealized loss on marketable securities   75,330       147,296  
Gain on receipt of non-refundable deposit   (84,968 )      
Impairment reversal of royalties   (1,500,000 )      
Gain on disposal of royalties   (4,675,904 )      
Foreign exchange loss   (322,663 )     (394,980 )
Income tax recovery         (4,988 )
     
Income taxes paid         (11,012 )
     
Changes in non-cash working capital items:    
Decrease (increase) in receivables   530,148       (348,196 )
Decrease in prepaid expenses   165,929       105,201  
Increase in accounts payable and accrued liabilities   1,080,802       187,340  
     
Net cash used in operating activities   (4,024,494 )     (1,761,034 )
     
CASH FLOWS FROM INVESTING ACTIVITIES    
Acquisition of property, plant and equipment   (6,446,743 )     (11,817,289 )
Acquisition of exploration and evaluation assets   (17,224,234 )     (11,489,073 )
Proceeds on receipt of non-refundable deposits   234,968        
Proceeds from disposal of royalties   4,099,004        
Increase in deposits   (2,608 )     (28,750 )
               
Net cash used in investing activities   (19,339,613 )     (23,335,112 )
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Increase in deferred financing fees   (228,966 )      
Lease payments         (723 )
     
Net cash used in financing activities   (228,966 )     (723 )
     
Change in cash during the period   (23,593,073 )     (25,096,869 )
Cash, beginning of the period   25,791,552       55,495,232  
Impact of foreign exchange on cash   1,102,973       1,181,023  
     
Cash, end of the period $ 3,301,452     $ 31,579,386  
     
Cash paid during the period for interest $     $  
     
Cash paid during the period for income taxes $     $ 11,012  
               
               
               

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(Expressed in Canadian dollars)

               
    Share     Foreign    
  Capital stock subscriptions   Share-based currency    
  Number of   received in Capital payment translation   Shareholders’
  shares Amount advance contribution reserve reserve Deficit equity – total
Balance at January 31, 2023 535,020,712 $ 128,377,152 $ 17,500   $ 2,007,665 $ 384,758 $ (648,962 ) $ (39,677,003 ) $ 90,461,110  
Warrant exercises 250,000   17,500   (17,500 )                
Foreign currency translation             1,619,065         1,619,065  
Share-based compensation           207,514           207,514  
Loss for the period                 (1,571,831 )   (1,571,831 )
Balance at October 31, 2023 535,270,712 $ 128,394,652 $   $ 2,007,665 $ 592,272 $ 970,103   $ (41,248,834 ) $ 90,715,858  
                 
Balance at December 31, 2023 535,270,712 $ 128,394,652 $   $ 2,007,665 $ 711,690 $ 1,369,146   $ (42,391,158 ) $ 90,091,995  
Foreign currency translation             6,558,113         6,558,113  
Share-based compensation           372,462           372,462  
Profit for the period                 482,935     482,935  
Balance at September 30, 2024 535,270,712 $ 128,394,652 $   $ 2,007,665 $ 1,084,152 $ 7,927,259   $ (41,908,223 ) $ 97,505,505  


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