Post by
sueron on Jun 11, 2021 9:59am
Value of SC tin alone
From https://www.lse.co.uk/ShareChat.asp?ShareTicker=CUSN&share=Cornish-Metals
Not saying to buy or sell..
From the Times article:-
"Cornish Metals issued an updated mineral resource estimate for part of its South Crofty tin mine yesterday, which the chief executive said showed an increase from about 45,000 tonnes of tin to about 65,000 tonnes. "
At a price of $ 31,445 per tonne, 65,0000 tonnes of tin is currently worth $2.04bn. We also know that :-
"The major lode structures that comprise the Mineral Resource remain open along strike and to depth.""
This means the end of the lode has not been determined - which in laymen terms indicates an upside to the published official resource.. The estimate covers only the area drilled. So the value of tin at SC is at least $2.04bn.
What about the cost of getting it out of the ground and smelting?
The PEA can help us there. After allowing for extraction costs, and taxation the PEA gave an Net present value of $130.5m at a tin price of $10/lb. The price now is around 44% higher. The sensitivity analysis on page 171 of the PEA, indicates a $1 increase in the price of tin adds around $57.6 m (188.1-130.5) to the NPV. So a $4.4 increase. might add $4.4x 57.6=$253.44m
giving us $383.94m. ( On the basis of mining 2575k tonnes of ore. )
However on Wednesday the company updated its resource estimate for SC and the tonnage indicated and inferred for the upper and lower mines rose to 4791k tonnes. It may be reasonable therefore to upgrade the NPV by a factor of 4791/2575 or 86% from $383.94 to $714m.
Even if the company has to part with a significant percentage of this value to provide funding, clearly there is highly likely to be huge upside to the value of the company currently £45m ( $64m ) at 17.05p.
I have not even considered the potential value from the exploration at United Downs, or the 30,000+ acres of mineral rights, the value of the interest in Cornish Lithium,