FINANCIAL STATEMENTS FOR YEAR END 31 JANUARY 2021

RNS Number : 8033Y

Cornish Metals Inc.

17 May 2021

 

CORNISH METALS RELEASES FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDING 31 JANUARY 2021 AND POSTING OF ANNUAL ACCOUNTS TO SHAREHOLDERS

May 17, 2021

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 financial statements and management, discussion and analysis ("MD&A") for the year ending 31 January, 2021. The reports are available under the Company's profile on SEDAR ( www.sedar.com ) and on the Company's website ( www.cornishmetals.com ) and have been posted to shareholders today.

Highlights for the year ended January 31, 2021 and for the period ending May 13, 2021

· Gross proceeds of $2,352,500 raised from private placement completed in February 2020 used for 'proof of concept' drill program at the South Crofty tin project and for general working capital purposes;

· Discovery of new zone of high-grade copper-tin mineralization at the United Downs exploration project in April 2020;

· 'Proof of concept' drill program at South Crofty completed between June and September 2020 with promising high-grade tin and copper intersections, confirming the potential to increase the current mineral resource estimate ;

· Exercise of 16,100,000 warrants during the year ended January 31, 2021, of which 5,222,222 were under an early warrant exercise incentive program, for proceeds of $1,134,500;

· Completion of listing and concurrent financing on AIM in February 2021 raising gross proceeds of £8.2 million ($14.4 million based on February 12, 2021 closing exchange rate) to advance the United Downs exploration project and for general working capital purposes;

· 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;

· 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;

· Financing options continue to be considered to progress the South Crofty tin project;

· Mr. Patrick Anderson appointed Chairman of the Board in July 2020 while Mr. Grenville Thomas, the previous Chairman, remains a Director; and

· Mr. John McGloin appointed as a Director to the Board in October 2020.

 Key annual financial metrics

(Expressed in Canadian dollars)	31 January 2021	31 January 2020
Total operating expenses	1,986,727	1,775,705
Loss for the year	1,598,400	4,559,178
Net cash used in operating activities	1,264,568	1,360,091
Net cash used in investing activities	1,646,685	504,507
Net cash provided by financing activities	1,970,752	1,017,247
Cash at end of the financial year	353,601	1,305,253

Outlook

The proceeds from the recently completed AIM listing are to be 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.

Over the next 12 to 18 months, the Company's plans are as follows:

· Commence an 18 month, 9,100 meter initial drilling program at United Downs to advance the project to Inferred Mineral Resource definition, fully funded from the proceeds arising from the AIM listing;

· To test three lodes with a 1,000 meter of strike length to a depth of 500 meter in the initial phase.  Management believes there are up to seven further mineralized lode structures with a total resource potential of between four million tons and ten million tons;

· Subject to the outcome of the initial drilling program, to 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 .

The annual financial statements and management, discussion and analysis are available on the Company's website .

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.

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.

For additional information please contact:

In North America:

Irene Dorsman at [phone] or by e-mail at [e-mail]  

SP Angel Corporate Finance LLP (Nominated Adviser & Joint Broker)	Tel:	[phone]
	Richard Morrison
	Charlie Bouverat
	Grant Barker

Hannam & Partners (Joint Broker)	Tel:	[phone]
	Matthew Hasson
	Andrew Chubb
	Ernest Bell
Blytheweigh (Financial PR/IR-London)	Tel:	[phone]
	Tim Blythe	[e-mail]
	Megan Ray	[e-mail]

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", including but not limited to, statements with respect to the continued listing and trading of the Common Shares on the TSX-V and AIM; and the expected commencement of future exploration programs at the United Downs and the South Crofty Mine.

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 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.

 

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

As at January 31

(Expressed in Canadian dollars)

	2021	2020
ASSETS
Current
Cash	$  353,601	$  1,305,253
Marketable securities	1,004,307	547,721
Receivables	23,644	23,414
Deferred financing fees	688,839	-
Deferred costs on conversion of royalty option	151,037	-
Prepaid expenses	41,691	54,702
	2,263,119	1,931,090
Deposits	36,976	36,829
Property, plant and equipment	6,371,852	5,966,727
Exploration and evaluation assets	9,507,859	7,928,688
	$  18,179,806	$  15,863,334
LIABILITIES
Current
Accounts payable and accrued liabilities	$  947,124	$  610,288
Lease liability	20,389	78,595
	967,513	688,883
Lease liability	-	20,313
Debt	5,993,803	5,210,765
Royalty option	2,886,514	2,886,514
	9,847,830	8,806,475
SHAREHOLDERS' EQUITY
Capital stock	40,737,065	37,271,686
Share subscriptions received in advance	189,902	1,175,000
Capital contribution	2,007,665	2,007,665
Share-based payment reserve	846,212	732,930
Foreign currency translation reserve	239,028	149,996
Deficit	(35,687,896)	(34,280,418)
	8,331,976	7,056,859
	$  18,179,806	$  15,863,334

 

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

YEARS ENDED JANUARY 31

(Expressed in Canadian dollars)

	2021	2020
EXPENSES
Accretion	$  292,076	$  218,408
Advertising and promotion	134,790	406,705
Depreciation	87,034	91,400
Finance cost	9,717	4,072
Insurance	79,270	78,964
Office, miscellaneous and rent	36,708	15,073
Professional fees	305,633	241,021
Generative exploration costs	3,970	6,242
Regulatory and filing fees   Share-based compensation	30,567 304,204	14,074 -
Salaries and benefits	702,758	699,746
Total operating expenses	(1,986,727)	(1,775,705)
Interest income	4,537	8,162
Foreign exchange loss	(8,007)	(23,439)
Unrealized gain on marketable securities	391,797	164,344
Realized gain on marketable securities	-	30,019
Write off of deferred financing fees	-	(582,617)
Impairment of royalties	-	(1,500,000)
Impairment of exploration and evaluation assets	-	(879,942)
Loss for the year	(1,598,400)	(4,559,178)
Foreign currency translation	89,032	149,996
Total comprehensive loss for the year	$  (1,509,368)	$  (4,409,182)
Basic and diluted loss per share	$  (0.01)	$  (0.05)
Weighted average number of common shares outstanding	135,320,393	86,768,585

 

CONSOLIDATED STATEMENTS OF CASH FLOWS 

YEARS ENDED JANUARY 31

(Expressed in Canadian dollars)

	2021	2020
CASH FLOWS FROM OPERATING ACTIVITIES
Loss for the year	$  (1,598,400)	$  (4,559,178)
Items not involving cash:
Accretion	292,076	218,408
Depreciation	87,034	91,400
Share-based compensation	304,204	-
Finance cost	9,717	4,072
Realized gain on marketable securities	-	(30,019)
Unrealized gain on marketable securities	(391,797)	(164,344)
Impairment of exploration and evaluation assets	-	879,942
Impairment of royalties	-	1,500,000
Write off of deferred financing fees	-	582,617
Foreign exchange loss	-	23,439
Changes in non-cash working capital items:
Increase in receivables	(116)	(11,308)
Decrease in prepaid expenses	21,470	81,788
Increase in accounts payable and accrued liabilities	11,244	23,092
Net cash used in operating activities	(1,264,568)	(1,360,091)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment   Acquisition of exploration and evaluation assets   Proceeds from the sale of marketable securities, net   Increase in deposits	(315,779) (1,330,906) -    -	(18,291) (1,366,235) 880,019   -
Net cash used in investing activities	(1,646,685)	(504,507)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from private placement financing	1,177,500	-
Proceeds from fundraising received in advance of share issue	189,902	1,175,000
Proceeds from warrant exercise	1,134,500	-
Share issue costs	(49,427)	(750)
Increase in deferred financing fees	(344,211)	(71,458)
Increase in deferred costs on conversion of royalty option	(49,174)	-
Lease payments	(88,338)	(85,545)
Net cash provided by financing activities	1,970,752	1,017,247
Impact of foreign exchange on cash	(11,151)	(9,168)
Change in cash during the year	(951,652)	(856,519)
Cash, beginning of the year	1,305,253	2,161,772
Cash, end of the year	$  353,601	$  1,305,253
Cash paid during the year for interest	$  -	$  -
Cash paid during the year for income taxes	$  -	$  -

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

YEARS ENDED JANUARY 31

(Expressed in Canadian dollars)

	Number of shares	Capital stock	Share subscriptions received in advance	Capital contribution	Share-based payment reserve	Foreign currency translation reserve	Deficit	Total
Balance at January 31, 2019	86,768,585	$  37,271,571	$  -	$  507,665	$  816,274	$  -	$  (29,775,913)	$  8,819,597
Foreign currency translation	-	-	-	-	-	149,996		149,996
Commitment to issue shares pursuant to fundraising	-	-	1,175,000	-	-	-	-	1,175,000
Share issue costs	-	(28,556)	-	-	-	-	-	(28,556)
Settlement of line of credit	-	-	-	1,500,000	-	-	-	1,500,000
Forfeiture and expiry of stock  options and warrants	-	28,671	-	-	(83,344)	-	54,673	-
Loss for the year	-	-	-	-	-	-	( 4,559,178 )	(4,559,178)
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 AIM listing	-	-	189,902	-	-	-	-	189,902
Warrant exercise	16,100,000	1,134,500	-	-	-	-	-	1,134,500
Forfeiture and expiry of stock   options	-	-	-	-	(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

 

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