TIDMCUSN

RNS Number : 8033Y

Cornish Metals Inc.

17 May 2021

CORNISH METALS RELEASES FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEARING 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 GBP8.2 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 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", 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

YEARSED 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                                 30,567             14,074 
       Share-based compensation                                 304,204                  - 
 
     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

YEARSED 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                            (315,779)                 (18,291) 
      Acquisition of exploration and evaluation assets                     (1,330,906)              (1,366,235) 
      Proceeds from the sale of marketable securities, 
       net                                                                           -                  880,019 
      Increase in deposits                                                           -                        - 
      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                      (49,174)                        - 
      option 
     Lease payments                                                           (88,338)                 (85,545) 
 
      Net cash provided by financing activities                              1,970,752                1,017,247 
 
                                                                                                         (9,168 
 Impact of foreign exchange on cash                                           (11,151)                        ) 
 
 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)

 
                                                           Share                                      Foreign 
                                                   subscriptions                   Share-based       currency 
                          Number        Capital         received        Capital        payment    translation 
                       of shares          stock       in advance   contribution        reserve        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                                                                                                            ( 4,559,178 
    year                       -              -                -              -              -              -                        )    (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                                                                                                           $ ( 35,687,896 
  31, 2021           149,918,585   $ 40,737,065        $ 189,902    $ 2,007,665      $ 846,212      $ 239,028              )               $ 8,331,976 
------------------  ------------  -------------  ---------------  -------------  -------------  -------------  -----------------------  -------------- 
 

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