May 19, 2022

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Cornish Metals Releases Financial Statements and

VANCOUVER, British Columbia, June 24, 2021 (GLOBE NEWSWIRE) — 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 interim financial statements and management, discussion and analysis (“MD&A”) for the three months ended 30 April 2021. The reports are available under the Company’s profile on SEDAR (www.sedar.com) and on the Company’s website (www.cornishmetals.com).

Highlights for the three months ended April 30, 2021 and for the period ending June 23, 2021

  • 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;
  • 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;
  • Commencement of phased exploration program at the United Downs exploration project in April 2021 to initially delineate further the known mineralized structures and conduct in-fill drilling;
  • Increases in Indicated Resource and Inferred Resource by 10.2{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} and 129.8{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb}, respectively, for the Lower Mine in updated Mineral Resource Estimate for South Crofty mine published in June 2021 (see news release dated June 9, 2021); and
  • Financing options continue to be considered to progress the South Crofty tin project.

Richard Williams, CEO of Cornish Metals, stated, “I am delighted with what the Company has achieved in the last few months – a highly successful listing on AIM which surpassed our expectations, the conversion of the Osisko loan note into two royalties which endorsed the quality of the Company’s projects in Cornwall, a substantial increase in mineral resource for South Crofty and the commencement of the exploration programme at United Downs. I look forward to reporting imminently on the initial results of that exploration programme once the assays from the first few drill holes have been assessed.

“Longer term, we are continuing to assess various financing options to progress South Crofty which remains a key strategic asset for the Company. South Crofty could potentially play a pivotal role in securing a domestic and sustainable source of battery metals as the UK transitions to a low carbon economy.”

Key financial metrics for the first quarter

  Three months ended
(Expressed in Canadian dollars) 30 April 2021 30 April 2020
     
Total operating expenses 894,549 401,968
Loss for the period 1,301,049 398,893
Net cash used in operating activities 908,981 291,073
Net cash used in investing activities 762,856 526,047
Net cash provided by financing activities 13,226,816 1,119,335
Cash at end of the financial period 11,511,900 1,609,018

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.

Within 12 to 18 months of the date of the AIM listing, the Company plans to:

  • 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;
  • 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, 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.

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.

Market Abuse Regulation (MAR) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)

  April 30, 2021     January 31, 2021  
           
ASSETS          
           
Current          
Cash $         11,511,900     $         353,601  
Marketable securities                   1,004,307                       1,004,307  
Receivables           71,038               23,644  
Deferred financing fees                          688,839  
Deferred costs on conversion of royalty option         151,037  
Prepaid expenses           226,126               41,691  
            12,813,371               2,263,119  
           
Deposits   53,191       36,976  
Property, plant and equipment           6,226,709               6,371,852  
Exploration and evaluation assets           9,723,159               9,507,859  
           
  $         28,816,430     $         18,179,806  
           
           
LIABILITIES          
           
Current          
Accounts payable and accrued liabilities $ 594,062     $ 947,124  
Lease liability   4,339       20,389  
    598,401       967,513  
Lease liability   3,800        
Debt         5,993,803  
Royalty option         2,886,514  
NSR liability   8,419,876                                    –  
    9,022,077       9,847,830  
           
SHAREHOLDERS’ EQUITY          
Capital stock           53,849,099               40,737,065  
Share subscriptions received in advance         189,902  
Capital contribution   2,007,665       2,007,665  
Share-based payment reserve           898,008               846,212  
Foreign currency translation reserve   28,526       239,028  
Deficit   (36,988,945 )     (35,687,896 )
           
            19,794,353               8,331,976  
           
  $         28,816,430     $         18,179,806  

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)

  Three months ended
  April 30, 2021     April 30, 2020  
     
EXPENSES    
Accretion $ 15,764     $ 60,380  
Advertising and promotion   52,925       49,874  
Depreciation   22,109       22,388  
Finance cost   3,895       4,545  
Insurance   21,784       19,545  
Office, miscellaneous and rent   21,883       11,159  
Professional fees   412,674       49,939  
Regulatory and filing fees   68,883       8,379  
Share-based compensation   51,796        
Salaries, directors’ fees and benefits   222,836       175,759  
     
Total operating expenses   (894,549 )     (401,968 )
     
Interest income   192       3,259  
Foreign exchange loss              (406,692 )                       (184 )
     
Loss for the period            (1,301,049 )     (398,893 )
     
Foreign currency translation              (210,502 )     34,435  
Total comprehensive loss for the period $ (1,511,551 )   $ (364,458 )
     
Basic and diluted loss per share $ (0.01 )   $ (0.00 )
     
Weighted average number of common shares outstanding:   248,501,072       132,773,030  

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS        
(Unaudited – Prepared by Management)
(Expressed in Canadian dollars)

  For the three months ended
  April 30, 2021     April 30, 2020  
     
CASH FLOWS FROM OPERATING ACTIVITIES    
Loss for the period $ (1,301,049 )   $ (398,893 )
Items not involving cash:    
Accretion   15,764       60,380  
Depreciation   22,109       22,388  
Share-based compensation   51,796        
Finance cost   3,895       4,545  
Foreign exchange loss   406,692       184  
                             
Changes in non-cash working capital items:    
Decrease (increase) in receivables   (47,393 )     1,858  
Decrease (increase) in prepaid expenses   (54,245 )     24,316  
Decrease in accounts payable and accrued liabilities   (6,550 )     (5,851 )
     
Net cash used in operating activities   (908,981 )     (291,073 )
     
     
CASH FLOWS FROM INVESTING ACTIVITIES              
Acquisition of property, plant and equipment   (75,671     (315,165
Acquisition of exploration and evaluation assets   (670,970     (210,821
Increase in deposits   (16,215     (61
     
Net cash used in investing activities   (762,856 )     (526,047 )
     
CASH FLOWS FROM FINANCING ACTIVITIES    
Proceeds from AIM listing          14,244,206        
Proceeds from private placement financing         1,177,500  
Proceeds from warrant exercises   184,750        
Share issue costs   (1,066,126 )     (33,971 )
Conversion of royalty option costs   (111,730 )      
Lease payments   (24,284 )     (24,194 )
     
Net cash provided by financing activities   13,226,816       1,119,335  
     
Impact on foreign exchange on cash   (396,680 )     1,550  
     
Change in cash during the period        11,158,299       303,765  
Cash, beginning of the period   353,601       1,305,253  
     
Cash, end of the period $ 11,511,900     $ 1,609,018  
     
Cash paid during the period for interest $         –     $          –  
     
Cash paid during the period for income taxes $         –     $         –  

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY        
THREE MONTHS ENDED APRIL 30
(Unaudited – Prepared by Management)
(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  
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 )
Forfeiture of stock options             (28,449 )       28,449      
Foreign currency translation                 34,435         34,435  
Loss for the period                     (398,893 )   (398,893 )
Balance at April 30, 2020 133,818,585 $ 39,602,565   $   $ 2,007,665 $ 704,481   $ 184,431   $ (34,650,862 ) $ 7,848,280  
                 
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  
Share issuance pursuant to AIM listing 117,226,572   14,434,108     (189,902 )                 14,244,206  
Share issue costs   (1,506,824 )                     (1,506,824 )
Warrant exercises 2,275,000   184,750                       184,750  
Share-based compensation             51,796             51,796  
Foreign currency translation                 (210,502 )       (210,502 )
Loss for the period                     (1,301,049 )   (1,301,049 )
Balance at April 30, 2021 269,420,157 $ 53,849,099   $   $ 2,007,665 $ 898,008   $ 28,526   $ (36,988,945 ) $ 19,794,353