(Alliance News) - 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 USD201 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 USD31,000 per tonne.
Total post-tax cash flow of around USD626 million is also expected from the start of production, peaking at USD82 million in the project's second year.
Once operational, the project will generate average annual earnings before interest, tax, depreciation and amortisation of USD83 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."
By Hugh Cameron, Alliance News reporter
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