Cornish Metals Inc (AIM:CUSN, TSX-V:CUSN, OTC:SBWFF) said it plans to raise as much as £40.5mln, including a £25mln strategic investment by Sir Mick Davis' Vision Blue Resources, via an offering to help advance the South Crofty tin project in Cornwall.
The company said the remaining £15.5mln will be raised via a private placing to existing and new UK institutional investors as well as a subscription by existing Canadian investors and eligible accredited private investors.
"This announcement marks a transformational moment for the company, its shareholders and all stakeholders in relation to the redevelopment of South Crofty, the company's principal asset,” said chief executive Richard Williams.
“It is testament to the quality of both the project and the company that an investor of the calibre of Vision Blue Resources is proposing such a significant investment, and we are delighted to welcome them as a major strategic shareholder.”
Vision Blue was founded by former Xstrata chief executive Davis to invest in clean energy-related metal and mineral resource companies. It is expected to hold a 27.2% stake in Cornish Metals following the offering and will have the right to nominate one person to the board.
“The investment in South Crofty has the potential to deliver significant tin production to meet an expected supply shortfall and enable the deployment of new, green technologies,” said Davis. “At the same time, restarting production at an historic underground mine, within the existing footprint, and with the benefit of modern production techniques, provides an opportunity to minimise environmental and other impacts whilst creating significant benefits for local communities."
The offering will comprise of one share priced at 18p and a warrant to purchase another share for 27p. The company’s shares, which closed at 27.5p on Friday, were down 1.8% at 27.0p in mid-morning trading.
Work at South Crofty will include dewatering the mine, resource drilling, completion of a feasibility study, evaluation of further downstream beneficiation opportunities, and on-site early works in advance of a potential construction decision, said Cornish Metals.
Demand for tin is expected to increasingly outstrip supply in coming years driven by growing demand from the electronics sector, electric vehicles (EVs) and renewable power, especially solar cells, it said, noting the 60% surge in tin prices since March 2021 on the London Metal Exchange.
"We are excited to embark on this new chapter of Cornwall's mining history which will see South Crofty make a significant contribution to the local and UK economy, with the potential to create up to 1,000 direct and indirect jobs, as well being at the forefront of the drive towards net zero," said Williams.