Cornish Metals (LON: TIN) says South Crofty is on schedule, but its US$210m bond cash stays locked in escrow until an equity raise of at least US$161m completes. The AIM-listed developer of a tin mine in Cornwall published its third-quarter update at 7am today.
Shares were quoted at 62.67p at 9.33am today, a delayed quote, against the previous close of 62.5p. That is a rise of 0.272%, inside a day range of 62p to 63p. The update adds no new material information, so the move is not tied to it.
The update covers the 1st of July to the 30th of September and is issued under the terms of the company’s senior secured bond, debt that ranks first and is backed by assets. The bond was issued on the 21st of May and admitted to trading on the Nordic Alternative Bond Market on the 5th of August.
Its proceeds sit in escrow, money held by a third party until conditions are met. One of those conditions is completion of an equity fundraising of at least US$161m.
Until then the company relies on other cash. It held £11.6m outside escrow at the 30th of September, after drawing the second tranche of its bridge facility, a short-term loan until main funding arrives, on the 20th of August. That tranche was £13.9m from the National Wealth Fund, a UK state-backed investor, and US$9.1m from Vision Blue Resources.
After the period end, Cornish Metals announced a £135m gross fundraising at 60p a share. It includes a US$15m subscription from Glencore, which also signed a six-year offtake agreement, a commitment to buy the output, for 100% of South Crofty’s tin concentrate.
The company put tin at US$53,927 a tonne at the 30th of September. At that price it estimates the project’s NPV6%, its value discounted at a 6% rate, at about £560m.
Construction is moving. Pumping floodwater out of the mine through the New Cook’s Kitchen shaft had passed 400 metres below surface by mid-October. At the process plant, engineering firm Ausenco leads detailed design, bulk excavation is substantially complete and civil works have begun.
The 400-level, about 730 metres below surface, is still targeted for the first half of 2027. The company’s near-term focus is completing the fundraising and meeting the conditions that release the bond proceeds.