Cornish Metals Releases Unaudited Financial Statements and Management's Discussion and Analysis For the Six Months Ended 30 June 2024

VANCOUVER, British Columbia, Aug. 15, 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 six months ended June 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 six months ended June 30, 2024 and for the period ending August 14, 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 September 1, 2024, subject to approval of a UK work visa;
  • Mr. Turvey is an experienced mining executive with more than 40 years of experience, including successfully funding and advancing new projects and historic mines through to production.
• 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, totaling 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.
• Commencement of second phase of refurbishment of New Cook’s Kitchen (“NCK”) shaft (news release dated July 10, 2024):
  • Shaft refurbishment progressing as planned with the on-schedule 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.
• 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 exceed the standards permitted by the Environment Agency.
• Purchase of land totaling 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”).
• Sale of Nickel King property announced for a total consideration of up to C$8.0 million (news release dated 16 June, 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 C$8 million;
  • Initial consideration of C$100,000 received on June 14, 2024, with transfer of Nickel King Property conditional on receipt of next tranche of consideration of C$900,000 by September 2024.
• Samantha Hoe-Richardson joined the Board as independent non-executive director effective January 8, 2024 (news release dated January 8, 2024).
• As at August 13, 2024 the Company’s cash position was C$7.9 million (equivalent to £4.5 million).
  

Ken Armstrong, Interim CEO and Director of Cornish Metals, stated: “Momentum and activity levels have remained high since the start of the year as the Cornish Metals team continues to progress work plans and accomplish key milestones, particularly the completion of the Preliminary Economic Assessment of the South Crofty tin project that confirms the Project’s potential to be a low-cost and long-life tin mining operation. The sale of the Company’s assets in northern Canada provides near-term liquidity and demonstrates our priority and focus on advancing South Crofty towards commencement of production in 2027.

We are delighted to welcome Don Turvey as CEO of Cornish Metals and we are confident that he will capably lead the Company forward to realise the best potential for our stakeholders.”

Review of activities

Appointment of permanent CEO

On August 11, 2024, the Company announced the appointment of Mr. Don Turvey as CEO and an executive director of the Company. Regulatory approval has been obtained in relation to the appointment, which is intended to be effective September 1, 2024, subject to approval of a UK work visa for Mr. Turvey, who will relocate from South Africa to Cornwall, where he will be based. Mr. Turvey is an experienced mining executive with more than 40 years of experience in the sector. He has been CEO of private, ASX and AIM-listed mining companies where he has successfully funded and taken new projects and historic mines through to production, as well as leading a number of M&A transactions. Following Mr. Turvey’s appointment, Patrick Anderson will return to the position of non-executive Chair of the Board of Directors of the Company, and Ken Armstrong as non-executive director.

Preliminary Economic Assessment completed for South Crofty Project

The results of the South Crofty Project PEA were released on April 30, 2024, validating the Project’s economic viability and potential to be a low-cost and long-life tin mining operation with a current 14-year LOM. South Crofty is expected to produce a clean, high-grade tin concentrate and to be an important tin producer in Europe, supplying into the growing demand for this critical metal that is essential for the energy transition.

Key highlights from the PEA include:

• After-tax NPV8% of US$201 million and 29.8% after-tax IRR at base case tin price of US$31,000/tonne;
• Pre-production capital requirement of US$177 million;
• Capital pay-back period of three years after-tax;
• Total after-tax cash flow of US$626 million from start of production, peaking at US$82 million in second year of production;
• Average annual earnings before interest, taxes, depreciation and amortization (“EBITDA”) of US$83 million and 62.1% EBITDA margin in years two through six;
• 49,310 tonnes of tin metal in concentrate produced over a 14-year LOM
• Average annual tin production of over 4,700 tonnes for years two through six, equivalent to approximately 1.6% of global mined tin production;
• LOM average all-in sustaining cash cost (“AISC”) of US$13,661/tonne of payable tin, positioning South Crofty as a low cost tin producer;
• Growth opportunities from additional in-mine and near-mine exploration with the potential to materially extend the mine life and increase production; and
• Potential to directly employ up to 320 people with permanent high-skilled and well-paid jobs and create up to 1,000 indirect jobs.

Further details can be found in the news release dated April 30, 2024 and the Technical Report entitled “South Crofty PEA” prepared in accordance with NI 43-101 and filed on SEDAR+.

Refurbishment of New Cook’s Kitchen Shaft – second phase commenced

Phase 2 of NCK shaft refurbishment is underway, following the on-schedule installation of a new double-deck equipping stage and modified main cage, providing a safe and stable work platform enabling faster replacement of the old shaft timbers with new steel buntons and guides (refer news release dated July 10, 2024). Rephasing shaft refurbishment, concurrent with mine dewatering, will improve the functionality of NCK shaft, enable larger equipment to access the mine at an earlier stage in its re-development and ensure that high health and safety standards are applied as the underground mine workings are accessed.

The NCK shaft winding engines and associated winding apparatus, including the refurbished south headframe, have been fully commissioned and, following successful third-party compliance testing, have been certified for use. This system enables safe access to NCK shaft for personnel and materials as required to facilitate the shaft refurbishment works and subsequent access to the dewatered deep workings of the mine. Mine dewatering continues with the submersible pumps and water treatment plant operating to specifications. The water level in NCK shaft is being maintained at approximately 280 metres below surface and the treated water being discharged to the Red River is consistently well within the permitted standards.

Shaft refurbishment and mine dewatering is anticipated to reach the 195-fathom level (approximately 350 metres below surface) in Q4-2024 and refurbishment of the 195-fathom pump station and installation of permanent pumps is scheduled to be completed in Q1-2025. Shaft refurbishment and mine dewatering are expected to be complete by September 2025.

Land purchase adjacent to South Crofty surface infrastructure

On May 21, 2024, the Company announced the purchase of a 7.7 acre land package situated to the south of Kerrier Way, immediately adjacent to important South Crofty surface infrastructure. The land purchase 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.

Exploration drill program at Carn Brea South

A 9,000-meter exploration drill program was completed at the Wide Formation target in the Carn Brea South exploration area in June 2024. The drill program was designed to test the geometry and the continuity of tin mineralization discovered by the Company at the Wide Formation target (refer news release dated January 10, 2023).

The mineralization style in the Wide Formation, comprising pervasive tourmaline and quartz (termed ‘blue peach’), is similar in character to that associated with No. 8 Lode, one of the most prolific tin producing lodes in the latter years of operation of the South Crofty mine. The drill program tested an area measuring 2,500 meters along strike (northeast to southwest) and 800 meters downdip (north to south).

Drill results from the first six holes (refer news release dated February 4, 2024) confirm the Wide Formation structure over a 1.6km strike length, a downdip extent of at least 525 meters and thicknesses ranging from 1.8 meters – 4.8 meters. The structure remains open. Notable tin intercepts from the Wide Formation include 1.21 meters grading 0.87% Sn in CB23_004.

Drilling also identified a new mineralized structure lying directly beneath the Great Flat Lode (named the “Great Flat Lode Splay”), and several high-grade, steeply dipping tin zones between the Great Flat Lode and the Wide Formation. Notable tin intercepts from the newly identified Great Flat Lode Splay include 3.38 meters grading 1.01% Sn in CB23_002.

Notable tin intercepts from multiple steeply-dipping, high-grade tin zones mainly intersected between the Great Flat Lode and the Wide Formation include 3.09 meters grading 1.21% Sn in CB23_001.

All samples have been submitted for analysis and final assay results will be reported when available.

Sale of Mactung and Cantung royalties

The Company completed the sale of its royalty interests on the Mactung and Cantung tungsten projects located in Northern Canada to Elemental Altus for a total cash consideration of US$4.5 million (refer news release dated July 21, 2024). The initial cash consideration of US$3.0 million was received by the Company on August 1, 2024 (refer news release dated August 4, 2024), with the balance of US$1.5 million due by August 1, 2025.

Sale of Nickel King Property

On June 16, 2024, the Company entered into a binding letter of intent with Northera for the sale of the Company's 100% interest in the Nickel King Property for a total consideration of up to C$8 million (refer news release dated June 16, 2024). Under the terms of the agreement, Northera made a non-refundable cash payment of C$100,000 on June 14, 2024. Within 95 days of signing the agreement, the Company will transfer the Nickel King Property upon receipt of a further non-refundable cash payment of C$900,000. Upon completion of a go-public transaction by Northera, resulting in a listing of securities on the TSX Venture Exchange, or other stock exchange, Northera will issue to the Company common shares in the capital of Northera having an aggregate market value equal to C$7.0 million.

Appointment of Samantha Hoe-Richardson as independent non-executive director

On January 8, 2024, the Company announced that Samantha Hoe-Richardson joined the Board of Directors as an independent non-executive director (refer news release dated January 8, 2024). Ms. Hoe-Richardson is an experienced non-executive director from a global mining, infrastructure and insurance background. She is currently a non-executive director of WE Soda Ltd, Assured Guaranty UK Ltd, Ascot Underwriting Limited and an independent advisor on climate change & sustainability to Laing O’Rourke. Ms. Hoe-Richardson was Head of Environment & Sustainable Development at Network Rail until 2017 and prior to that spent 16 years at Anglo American plc, latterly as Head of Environment. She previously worked in investment banking and audit. Ms. Hoe-Richardson holds a Masters Degree in nuclear and electrical engineering from the University of Cambridge, and is also a non-practicing Chartered Accountant.

Financial highlights for the six months ended June 30, 2024 and July 31, 2023

• 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;
• Expenditure of $1.7 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 $2.9 million for power, reagents, sludge disposal and maintenance of the WTP;
• Other project related expenditure of $6.1 million relating to the advancement of South Crofty, primarily relating to the ongoing feasibility study 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 $20.2 million to $6.0 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 six months ended June 30, 2024. The comparative period of reporting is the six months ended July 31, 2023.

The Company has allocated funding for near term opportunities to progress the project, the most significant being the purchase of the land located immediately adjacent to South Crofty surface infrastructure. As a consequence of pursuing these opportunities, additional financing will be required before the end of 2024.

Outlook

As described above, the Company is advancing the South Crofty tin project towards the start of production in 2027. By the end of December 2025, the Company’s objectives are as follows:

• Dewater South Crofty mine and refurbish NCK shaft by September 2025;
• 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 in 2025.
  

ABOUT CORNISH METALS

Cornish Metals is a dual-listed mineral exploration and development company (AIM and TSX-V: CUSN) focused on advancing the South Crofty high-grade, underground tin project through to a construction decision, as well as exploring its additional mineral rights, located in Cornwall, United Kingdom.

• South Crofty is a historical, high-grade, underground tin mine that started production in 1592 and continued operating until 1998 following over 400 years of continuous production;
• The Project possesses Planning Permission for underground mining (valid to 2071), to construct new processing facilities and all necessary site infrastructure, and an Environmental Permit to dewater the mine;
• South Crofty is one of the highest grade tin Mineral Resources globally and benefits from existing mine infrastructure including multiple shafts that can be used for future operations;
• The 2024 Preliminary Economic Assessment for South Crofty 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
• Tin is a Critical Mineral as defined by the UK, American, and Canadian governments;
• Tin connects almost all electronic and electrical infrastructure, making it critical to the energy transition – responsible sourcing of critical minerals and security of supply are key factors in the energy transition and technology growth;
• Approximately two-thirds of the tin mined today comes from China, Myanmar and Indonesia;
• There is no primary tin production in Europe or North America;
• South Crofty benefits from strong local community, regional and national government support.
• Cornish Metals has a growing team of skilled people, local to Cornwall, and the Project 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 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 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

“Kenneth A. Armstrong”
Kenneth A. Armstrong P.Geo.

Engage with us directly at our investor hub. Sign up at: https://investors.cornishmetals.com/link/0PQ3be

For additional information please contact:

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 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 feasibility 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

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(Expressed in Canadian dollars)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

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(Expressed in Canadian dollars)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS

(Unaudited)
(Expressed in Canadian dollars)

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

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