Cornish Metals Inc on Wednesday said that a recent economic assessment of its flagship South Crofty tin project had produced a promising financial profile, reaffirming the company’s confidence in its flagship asset.
Cornish Metals is a Vancouver-based mineral exploration company with projects in the UK and North America. Shares in the company were up 15% at 11.75 pence each in London on Wednesday morning.
Cornish Metals said that a preliminary economic assessment reported a post-tax net present value of $201 million for its 100% owned South Crofty tin project in Cornwall, England.
The assessment also produced an internal rate of return of 29.8%, confirming the project’s potential to be ‘a low-cost and long-life tin mining operation with a current 14-year life of mine’.
Both estimates assume a base case tin price of $31,000 per tonne.
Total post-tax cash flow of around $626 million is also expected from the start of production, peaking at $82 million in the project’s second year.
Once operational, the project will generate average annual earnings before interest, tax, depreciation and amortisation of $83 million for Cornish Metals at a 62% margin in years two through six.
South Crofty is expected to produce 49,310 tonnes of tin metal in concentrate over its 14-year lifespan, peaking at over 5,000 tonnes in year four.
Further technical work is underway at the project, Cornish Metals said, focused on advancing South Crofty toward a feasibility study before the company can identify the necessary suppliers and contractors.
Interim Chief Executive Officer Ken Armstrong said: ‘This PEA is an important milestone for Cornish Metals and our goal of bringing responsible tin mining back to Cornwall and the United Kingdom. South Crofty is a strategic asset as tin is recognised as a critical metal by the United Kingdom and other national governments, while there is currently no primary tin production in Europe or North America.’
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