Cornish Metals Launches £135m Raise at 60p to Unlock Tin Mine Bond

Cornish Metals (LON: TIN), the AIM-listed developer of the South Crofty tin mine, has launched a fundraising of about £135m at 60p a share. It combines an institutional placing, cornerstone subscriptions from NWF, Vision Blue, Glencore and directors, and a separate retail offer through RetailBook.

The shares last traded at 102p on Wednesday, and trading has been paused under a Capital Access Window until the results announcement. There has been no reaction to the news. The issue price is about 41% below that last trade, by our calculation, and the closes of the past three months ran between 99p and 113.5p.

The timing is set by debt. Cornish placed US$210m of 13.5% bonds in May, but the money sits in escrow until the company completes an equity raise of at least US$161m by the 21st of November. This raise is about US$188m, so it would clear that bar.

The vote carries real risk. If shareholders reject the resolutions, the fundraising does not proceed, and the company says it would very likely fail the bond condition and be unable to meet its debts. NWF, Vision Blue and the directors have given voting undertakings covering 57.95%. Nothing in the raise is underwritten, and it is all conditional.

The cost to existing holders is large. At £135m and 60p, the raise implies about 225m new shares, roughly 1.8 times the 125.5m in issue at the end of June, by our calculation. Retail offer terms have not yet been published.

The company’s sources and uses total £302m, including capex of £185m, and it says this takes South Crofty to first production in mid-2028, subject to consents. Glencore would also take 100% of the tin concentrate under a six-year offtake. Chief executive Don Turvey said:

The capital raised through this Fundraise will support the continued development of the South Crofty tin mine towards production.

Don Turvey, chief executive, Cornish Metals

The bookbuild, the process of gathering institutional orders, closes by 7pm tomorrow. A general meeting is due around the 9th of November, with admission of the new shares to AIM by 8am on the 10th of November.