Highlights for the six months ended
(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 datedFeb. 15, 2021 ); - Conversion of Osisko loan note in
February 2021 into two royalty agreements over mineral properties inCornwall with an accompanying simplified and reduced security package (news release datedFeb. 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 Indicated Resource and Inferred JORC (2012) Compliant Resource of contained tin / tin equivalent by 10.2% and 129.8%, respectively, for the
Lower Mine in an updated Mineral Resource Estimate forSouth Crofty Mine published inJune 2021 (news release datedJune 9, 2021 ); - Commencement of phased exploration program at the United Downs exploration project in
April 2021 with results from first 3,042 meters of drilling reported to date, with a further 5,000 to 6,000 meters of drilling planned under the program (news releases datedJuly 5, 2021 andAugust 30, 2021 ); - Agreement reached for the restructuring of outstanding deferred consideration relating to the acquisition of the South Crofty tin project and associated mineral rights, subject to regulatory approval (news release dated
July 1, 2021 ); and - Financing options continue to be considered to progress the South Crofty tin project.
Operationally, after the commencement of the exploration program at United Downs in April, we have reported promising results from the first 3,000 meters of drilling, with further drilling planned to fully determine the extent of mineralization at United Downs. We have also reported a substantial increase in mineral resource for South Crofty with further potential with the major lode structures remaining open along strike.
After the simplification of our capital structure and increase in mineral resource, we are assessing 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
Review of activities
Listing on AIM
On
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.
Pursuant to the Listing, the Company,
Conversion of Osisko loan note into royalties
On
- 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
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
Also on
Additionally, a binding heads of terms was agreed with
Updated mineral resource estimate released for South Crofty mine
An initial mineral resource estimate (“MRE”) was prepared in 2016 by
An updated MRE for South Crofty mine was released on
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 contained Tin / Tin equivalent from 2016 MRE |
Indicated | 2,084 | 1.59% Sn | 33 | 10.20% | |
Inferred | 1,937 | 1.67% Sn | 32 | 129.80% | |
Indicated | 277 | 1.01% SnEq | 3 | 9.50% | |
Inferred | 493 | 0.93% SnEq | 5 | 8.00% |
The Lower Mine MRE is reported using a 0.6% tin cut-off grade and the
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
After receiving confirmation of its permitted development rights from
The first phase of the drill program has focused on tracing along strike the recently discovered high-grade copper-tin mineralization in a structure now named the “UD Lode” (formerly the Lithium Lode). The UD Lode has been intersected in five of the six drill holes reported to date. The UD Lode has been traced over a strike length in excess of 200 meters to a depth of 400 meters and it remains open along strike.
In addition, four new zones of copper / tin / silver mineralization have been intersected adjacent to the main target demonstrating the wider prospectivity of United Downs. Drilling is ongoing to fully determine the lateral and vertical extent of these zones of mineralization.
A second target 900 meters to the south of the UD Lode, called Trenares Lode, is now also being drill tested.
Details of the intercepts from the ongoing drill program reported to date can be found in the press releases dated
The ongoing drill program at United Downs is part of the plan to advance the project to Inferred Mineral Resource definition within 18 months from the AIM listing, subject to the results of the program.
Restructuring of the deferred consideration payable for the
On
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 immediately upon receipt of shareholder and regulatory approvals that are required for the Side Letter;
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); andUS$5,000,000 to be paid in common shares upon closing of the development and / or construction financing 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
Financial highlights for the six months ended
Six months ended (unaudited) | ||
(Expressed in Canadian dollars) | ||
Total operating expenses | 1,625,462 | 746,938 |
Loss for the period | 1,097,062 | 789,476 |
Net cash used in operating activities | 1,710,060 | 657,510 |
Net cash used in investing activities | 1,383,840 | 838,790 |
Net cash provided by financing activities | 13,065,594 | 1,088,153 |
Cash at end of the financial period | 10,138,512 | 893,068 |
- Increase in operating expenses impacted by
$368,325 of costs relating to AIM listing not eligible for capitalization; - Higher advisory costs incurred more generally relating to AIM listing and corporate initiatives, offset by reduction in operating expenses arising from closure of
Vancouver office inApril 2021 ; - Unrealized gain of
$733,120 arising from increased valuation of Company’s holding in Cornish Lithium following its most recent fundraising completed inJuly 2021 ; - Costs of
$827,913 capitalized in connection with the ongoing exploration program at United Downs (excluding capitalized depreciation and foreign exchange movements); and - Gross proceeds raised from AIM listing of
$14.2 million (£8.2 million) with share issue costs of$1.5 million .
Outlook
The proceeds from the recently completed AIM listing are being 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:
- Progress an 18 month 9,100 meter initial drilling program at United Downs to advance the project to JORC Compliant Inferred Mineral Resource definition, fully funded from the proceeds arising from the AIM listing. To date, a total of 4,040 meters have been drilled;
- Test three lodes with a 1,000 meter of strike length to a depth of 500 meters in the initial phase. Management believes there are up to seven further mineralized lode structures with a total resource potential of between four million tonnes and ten million tonnes. To date, UD Lode has been traced over a strike length in excess of 200 meters and to a depth of 400 meters. Multiple parallel lode structures are present and drilling continues to further define these along with the principal UD Lode structure. A second target 900 meters to the south of UD Lode, called Trenares Lode, is now also being drill tested;
- 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
ON BEHALF OF THE BOARD OF DIRECTORS
“Richard D. Williams”
Neither the
Caution regarding forward looking statements
This news release contains "forward-looking statements". 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
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
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited)
(Expressed in Canadian dollars)
ASSETS | |||||||
Current | |||||||
Cash | $ | 10,138,512 | $ | 353,601 | |||
Marketable securities | 1,734,127 | 1,004,307 | |||||
Receivables | 115,821 | 23,644 | |||||
Deferred financing fees | - | 688,839 | |||||
Deferred costs on conversion of royalty option | - | 151,037 | |||||
Prepaid expenses | 205,640 | 41,691 | |||||
12,194,100 | 2,263,119 | ||||||
Deposits | 54,035 | 36,976 | |||||
Property, plant and equipment | 6,315,776 | 6,371,852 | |||||
Exploration and evaluation assets | 10,920,149 | 9,507,859 | |||||
$ | 29,484,060 | $ | 18,179,806 | ||||
LIABILITIES | |||||||
Current | |||||||
Accounts payable and accrued liabilities | $ | 680,937 | $ | 947,124 | |||
Lease liability | 4,372 | 20,389 | |||||
685,309 | 967,513 | ||||||
Lease liability | 2,810 | - | |||||
Debt | - | 5,993,803 | |||||
Royalty option | - | 2,886,514 | |||||
NSR liability | 8,541,188 | - | |||||
9,229,307 | 9,847,830 | ||||||
SHAREHOLDERS’ EQUITY | |||||||
Capital stock | 53,900,099 | 40,737,065 | |||||
Share subscriptions received in advance | - | 189,902 | |||||
Capital contribution | 2,007,665 | 2,007,665 | |||||
Share-based payment reserve | 922,760 | 846,212 | |||||
Foreign currency translation reserve | 209,187 | 239,028 | |||||
Deficit | (36,784,958 | ) | (35,687,896 | ) | |||
20,254,753 | 8,331,976 | ||||||
$ | 29,484,060 | $ | 18,179,806 |
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited)
(Expressed in Canadian dollars)
Six months ended | |||||||
EXPENSES | |||||||
Accretion | $ | 15,764 | $ | 131,046 | |||
Advertising and promotion | 166,026 | 77,180 | |||||
Depreciation | 23,316 | 44,777 | |||||
Finance cost | 3,895 | 623 | |||||
Insurance | 43,918 | 38,931 | |||||
Office, miscellaneous and rent | 39,712 | 24,217 | |||||
Professional fees | 704,810 | 66,297 | |||||
Generative exploration expense | 4,376 | - | |||||
Regulatory and filing fees | 91,704 | 19,531 | |||||
Share-based compensation | 76,548 | - | |||||
Salaries, directors’ fees and benefits | 455,393 | 344,336 | |||||
Total operating expenses | (1,625,462 | ) | (746,938 | ) | |||
Interest income | 497 | 4,318 | |||||
Foreign exchange loss | (203,001 | ) | (251 | ) | |||
Realized loss on marketable securities | (237 | ) | - | ||||
Unrealized gain (loss) on marketable securities | 733,120 | (46,605 | ) | ||||
Loss on the disposal of property, plant and equipment | (1,979 | ) | - | ||||
Loss for the period | (1,097,062 | ) | (789,476 | ) | |||
Foreign currency translation | (29,841 | ) | 128,136 | ||||
Total comprehensive loss for the period | $ | (1,126,903 | ) | $ | (661,340 | ) | |
Basic and diluted loss per share | $ | (0.00 | ) | $ | (0.00 | ) | |
Weighted average number of common shares outstanding: | 259,248,342 | 133,301,552 |
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS
(Unaudited)
(Expressed in Canadian dollars)
Six months ended | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Loss for the period | $ | (1,097,062 | ) | $ | (789,476 | ) | |
Items not involving cash: | |||||||
Accretion | 15,764 | 131,046 | |||||
Depreciation | 23,316 | 44,777 | |||||
Share-based compensation | 76,548 | - | |||||
Finance cost | 3,895 | 623 | |||||
Realized loss on marketable securities | 237 | - | |||||
Unrealized loss (gain) on marketable securities | (733,120 | ) | 46,605 | ||||
Loss on the disposal of property, plant and equipment | 1,979 | - | |||||
Foreign exchange loss | 203,001 | 251 | |||||
Changes in non-cash working capital items: | |||||||
Increase in receivables | (92,177 | ) | (58,408 | ) | |||
(Increase) decrease in prepaid expenses | (76,990 | ) | 27,748 | ||||
Decrease in accounts payable and accrued liabilities | (35,451 | ) | (60,676 | ) | |||
Net cash used in operating activities | (1,710,060 | ) | (657,510 | ) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Acquisition of property, plant and equipment | (81,890 | ) | (318,007 | ) | |||
Acquisition of exploration and evaluation assets | (1,287,953 | ) | (458,983 | ) | |||
Proceeds from the sale of marketable securities, net | 3,063 | - | |||||
Increase in deposits | (17,060 | ) | (61,800 | ) | |||
Net cash used in investing activities | (1,383,840 | ) | (838,790 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Proceeds from AIM listing | 14,244,206 | - | |||||
Proceeds from private placement financing | - | 1,177,500 | |||||
Proceeds from option and warrant exercises | 235,750 | - | |||||
Share issue costs | (1,162,613 | ) | (49,427 | ) | |||
Conversion of royalty option costs | (226,290 | ) | - | ||||
Lease payments | (25,459 | ) | (39,920 | ) | |||
Net cash used in by financing activities | 13,065,594 | 1,088,153 | |||||
Impact of foreign exchange on cash | (186,783 | ) | (4,038 | ) | |||
Change in cash during the period | 9,784,911 | (412,185 | ) | ||||
Cash, beginning of the period | 353,601 | 1,305,253 | |||||
Cash, end of the period | $ | 10,138,512 | $ | 893,068 | |||
CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Unaudited)
(Expressed in Canadian dollars)
Number of shares | Amount | Share subscriptions received in advance | Capital contribution | Share-based payment reserve | Foreign currency translation reserve | Deficit | Total | ||||||||||||||
Balance at | 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 | - | - | - | - | (63,522 | ) | - | 63,522 | - | ||||||||||||
Foreign currency translation | - | - | - | - | - | 128,136 | - | 128,136 | |||||||||||||
Loss for the period | - | - | - | - | - | - | (789,476 | ) | (789,476 | ) | |||||||||||
Balance at | 133,818,585 | $ | 39,602,565 | $ | - | $ | 2,007,665 | $ | 669,408 | $ | 278,132 | $ | (35,006,372 | ) | $ | 7,551,398 | |||||
Balance at | 149,918,585 | $ | 40,737,065 | $ | 189,902 | $ | 2,007,665 | $ | 846,212 | $ | 239,028 | $ | (35,687,896 | ) | $ | 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 | 2,575,000 | 205,750 | - | - | - | - | - | 205,750 | |||||||||||||
Option exercises | 200,000 | 30,000 | - | - | - | - | - | 30,000 | |||||||||||||
Share-based compensation | - | - | - | - | 76,548 | - | - | 76,548 | |||||||||||||
Foreign currency translation | - | - | - | - | - | (29,841 | ) | - | (29,841 | ) | |||||||||||
Loss for the period | - | - | - | - | - | - | (1,097,062 | ) | (1,097,062 | ) | |||||||||||
Balance at | 269,920,157 | $ | 53,900,099 | $ | - | $ | 2,007,665 | $ | 922,760 | $ | 209,187 | $ | (36,784,958 | ) | $ | 20,254,753 |
For additional information please contact: InNorth America :Irene Dorsman at +1 (604) 200 6664 or by e-mail at irene@cornishmetals.comSP Angel Corporate Finance LLP (Nominated Adviser & Joint Broker) Tel: +44 203 470 0470Richard Morrison Charlie Bouverat Grant Barker Hannam & Partners (Joint Broker) Tel: +44 207 907 8500Matthew Hasson Andrew Chubb Ernest Bell Blytheweigh (Financial PR/IR-London ) Tel: +44 207 138 3204Tim Blythe tim.blythe@blytheweigh.comMegan Ray megan.ray@blytheweigh.com
Source:
2021 GlobeNewswire, Inc., source