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Cornish Metals Inc. (CUSN)

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Monday 17 May, 2021

Cornish Metals Inc.

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

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 (604) 210 8752 or by e-mail at [email protected]  

 

 

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 

[email protected]

 

Megan Ray

[email protected]

 

 

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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