FINANCIAL STATEMENTS & MD&A ENDED OCTOBER 31, 2021

RNS Number : 8199V
Cornish Metals Inc.
16 December 2021
 

 

 

CORNISH METALS RELEASES UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE NINE MONTHS ENDED OCTOBER 31, 2021

 

Vancouver, December 16, 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 unaudited financial statements and management's discussion and analysis ("MD&A") for the nine months ended October 31, 2021. The reports are available under the Company's profile on SEDAR ( www.sedar.com ) and on the Company's website .

Highlights for the nine months ended October 31, 2021 and for the period ending December 15 , 2021 

(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 dated Feb. 15, 2021 );

· 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 (news release dated Feb. 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 for South Crofty Mine published in June 2021 (news release dated June 9, 2021 );

· Commencement of phased exploration program at the United Downs exploration project in April 2021 with results from first 3,927 meters of drilling reported to date, with a further 4,000 to 5,000 meters of drilling planned under the program (news releases dated July 5, 2021 , August 30, 2021 , Nov. 3, 2021   and Dec. 6, 2021 );

· Agreement reached for the restructuring of outstanding deferred consideration relating to the acquisition of the South Crofty tin project and associated mineral rights (news release dated July 1, 2021 );

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

· Mr. Stephen Gatley appointed as an independent non-executive Director to the Board in October 2021 (news release dated Oct. 13, 2021 ).

Richard Williams, CEO of Cornish Metals, stated, "In the last few months, the ongoing exploration program at United Downs has delivered promising results validating the exploration potential we believe exists within our mineral properties. We look forward to reporting further results of the exploration program in the coming months.

I am pleased that during the period we obtained regulatory approval for the restructuring of the deferred consideration payable in respect of the acquisition of the Cornwall mineral properties which provides greater certainty for all parties. Steve Gatley joining the board also provided added strong mining and mine building expertise to the Company.

With the backdrop of record high tin prices, recognition of tin's importance to electrification of the economy and new renewable power generation initiatives, and the importance of domestic and responsible supply of minerals, we continue to assess various financing options to progress South Crofty. We concur with market analysis that the increasing demand for tin seen against supply restraints shows no sign of abating in the near to medium term."

Financial highlights for the nine months ended October 31, 2021

 

Nine months ended (unaudited)

(Expressed in Canadian dollars)

October 31, 2021

October 31, 2020

 

 

 

Total operating expenses

2,396,849

1,451,620

Loss for the period

2,052,403

1,493,999

Net cash used in operating activities

2,451,288

825,950

Net cash used in investing activities

2,740,937

1,421,612

Net cash provided by financing activities

13,064,465

1,441,905

Cash at end of the financial period

7,887,537

494,911

· 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 in April 2021;

· Unrealized gain of $733,120 arising from increased valuation of Company's holding in Cornish Lithium following its fundraising completed in July 2021 ;

· Costs of $1,586,277 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 are as follows:

· Continue with the 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 3,927 meters have been reported;

· Continue drill testing 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;

· 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 .

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 (604) 200 6664 or by e-mail at irene@cornishmetals.com  

 

 

SP Angel Corporate Finance LLP

(Nominated Adviser & Joint Broker)

Tel:

+44 203 470 0470

 

Richard Morrison

 

 

Charlie Bouverat

 

 

Grant Barker

 

 

 

 

 

 

Hannam & Partners

(Joint Broker) 

Tel: 

 

+44 207 907 8500

 

 

Matthew Hasson

 

 

Andrew Chubb

 

 

Ernest Bell

 

 

 

 

Blytheweigh

(Financial PR/IR-London)

Tel:

+44 207 138 3204

 

 

Tim Blythe 

tim.blythe@blytheweigh.com

 

Megan Ray

megan.ray@blytheweigh.com

 

 

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". 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.

 

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)

 

 

October 31, 2021

January 31, 2021

 

 

 

ASSETS

 

 

 

 

 

Current

 

 

  Cash

$  7,887,537

$  353,601

  Marketable securities

  1,734,127

1,004,307

  Receivables

  137,000

23,644

  Deferred financing fees

  -

688,839

  Deferred costs on conversion of royalty option

  -

  151,037

  Prepaid expenses

                 165,857

                 41,691 

 

9,924,521

2,263,119

 

 

 

Deposits

42,175

36,976

Property, plant and equipment

6,311,200

6,371,852

Exploration and evaluation assets

            13,149,060

  9,507,859

 

 

 

 

$  29,426,956

$  18,179,806

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

Current

 

 

  Accounts payable and accrued liabilities

$  633,533

$  947,124

  Lease liability

  4,229

  20,389

 

637,762

967,513

Lease liability

 1,707

  -

Debt

  -

  5,993,803

Royalty option

  -

  2,886,514

NSR liability

  8,487,727

  -

 

  9,127,196

  9,847,830

 

 

 

SHAREHOLDERS' EQUITY

 

 

  Capital stock

  55,188,099

  40,737,065

  Share subscriptions received in advance

  -

  189,902

  Capital contribution

2,007,665

2,007,665

  Share-based payment reserve

  926,766

  846,212

  Foreign currency translation reserve

  (82,471)

  239,028

  Deficit

         (37,740,299)

       (35,687,896)

 

 

 

 

  20,299,760

  8,331,976

 

 

 

 

$  29,426,956

$  18,179,806

 

 

 

 

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

 

(Unaudited)

(Expressed in Canadian dollars)

 

 

Nine months ended

 

October 31, 2021

October 31, 2020

 

 

 

EXPENSES

 

 

  Accretion

$  15,764

$  208,205

  Advertising and promotion

260,830

107,178

  Depreciation

24,522

67,135

  Finance cost

3,895

5,168

  Insurance

66,095

58,431

  Office, miscellaneous and rent

60,882

29,227

  Professional fees

842,183

192,378

  Generative exploration expense

28,845

3,729

  Regulatory and filing fees

114,452

25,480

  Share-based compensation

80,554

230,250

  Salaries, directors' fees and benefits

  898,827

  524,439

 

 

 

Total operating expenses

  (2,396,849)

  (1,451,620)

 

 

 

Interest income

 738

 4,517

Foreign exchange loss

 (387,196)

 (291)

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

(2,052,403)

(1,493,999)

 

 

 

  Foreign currency translation

  (321,499)

  (135,287)

Total comprehensive loss for the period

$  (2,373,902)

$  (1,629,286)

 

 

 

Basic and diluted loss per share

$  (0.01)

$   (0.01)

 

 

 

Weighted average number of common shares outstanding:

262,945,254

133,475,155

 

 

 

 

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS 

 

(Unaudited)

(Expressed in Canadian dollars)

 

 

For the nine months ended

 

October 31, 2021

October 31, 2020

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

  Loss for the period

$  (2,052,403)

$  (1,493,999)

  Items not involving cash:

 

 

  Accretion

  15,764

  208,205

  Depreciation

24,522

67,135

  Share-based compensation

80,554

230,250

  Finance cost

3,895

5,168

  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

-

  Foreign exchange loss

387,196

291

 

 

 

  Changes in non-cash working capital items:

 

 

  (Increase) decrease in receivables

(113,356)

2,441

  (Increase) decrease in prepaid expenses

(29,808)

   39,016

  (Decrease) increase in accounts payable and accrued liabilities

  (36,748)

  68,938

 

 

 

  Net cash used in operating activities

  (2,451,288)

       (825,950)

 

 

 

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

 (197,084)

(2,541,717)

3,063

  (5,199)

(317,564)

(1,104,317)

-

  269

  Net cash used in investing activities

  (2,740,937)

  (1,421,612)

 

 

 

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

  409,500

  Share issue costs

  (1,162,613)

        (49,427)

  Conversion of royalty option costs

(226,290)

  -

  Increase in deferred financing fees

-

(31,554)

  Lease payments

  (26,588)

  (64,114)

 

 

 

  Net cash provided by financing activities

  13,064,465

  1,441,905

 

 

 

Impact of foreign exchange on cash

  (338,304)

  (4,685)

 

 

 

Change in cash during the period

  7,533,936

  (810,342)

Cash, beginning of the period

  353,601

  1,305,253

 

 

 

Cash, end of the period

$  7,887,537

$  494,911

 

 

 

 

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 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

-

-

-

-

-

(135,287)

  - 

(135,287)

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 exercise of warrants

-

-

439,100

-

-

-

-

439,100

Forfeiture of stock options

-

-

-

-

(219,593)

-

219,593

-

Share-based compensation

-

-

-

-

230,250

-

-

230,250

Loss for the period

-

-

-

-

-

-

  ( 1,493,999 )

  (1,493,999)

Balance at October 31, 2020

133,818,585 

39,602,565

$  439,100

$  2,007,665

$  743,587

$  14,709

$ (35,554,824) 

$  7,252,802

 

 

 

 

 

 

 

 

 

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

  Foreign currency translation

-

-

-

-

-

(321,499)

  - 

(321,499)

  Share issuance pursuant to

   AIM listing

117,226,572

14,434,108

(189,902)

-

-

-

  -

14,244,206

  Shares issued pursuant to property option agreement

7,000,000

1,288,000

-

-

-

-

-

1,288,000

  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

-

-

-

-

80,554

-

-

80,554

Loss for the period

-

-

-

-

-

-

  (2,052,403)

  (2,052,403)

Balance at October 31, 2021

276,920,157 

$  55 ,188,099

$      -

$  2,007,665

$ 926,766

$  (82,471)

$  (37,740,299) 

$ 20,299,760

 

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
QRTEAAASFSAFFAA
UK 100

Latest directors dealings