Cornish Metals Releases Financial Statements and

VANCOUVER, British Columbia, May 17, 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 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  
     

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