Cornish Metals set to play a major part in UK growth following £28m government investment

The Chancellor of the Exchequer, Rachel Reeves, recognised the crucial role of Cornish Metal’s South Crofty tin mine in accelerating the nation’s transition to net zero and driving economic development in a speech delivered on Wednesday.

The speech followed news that the UK National Wealth Fund (NWF) has invested £28m in Cornish Metals as part of a wider £56m fundraise to bring the South Crofty tin mine back into production.

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Rachel Reeves said in a speech on Wednesday that the mine will provide “the raw materials to be used in solar panels, wind turbines and electric vehicles, supporting growth and jobs in the South West of England.”

Listen to Cornish Metals’ Chief Development Officer discuss plans for restarting tin production at the South Crofty Mine.

South Crofty was a producing mine until 1998 when the falling price of tin made operations uneconomical, and the mine closed. However, increased demand for tin from a broad range of technological and clean energy applications has lifted tin prices to a level that warrants the recommencement of production.

Anyone who drives past the Cornish towns of Camborne and Redruth will see the remnants of South Crofty’s operations ready to be brought back online with the funding round announced this week.

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The proceeds from the fundraising, combined with existing cash reserves of £5.3m, will be allocated across several key areas to advance the South Crofty Project.

The largest allocations include £17.2m for early works and long-lead items, £13.3m for mining and dewatering operations, and £12.6m for site costs and corporate expenses.

Additional funds will be directed towards project engineering studies and the repayment of the Vision Blue credit facility.

Investors should note this funding provides an operational runway through the end of Q1 2026, during which time it plans to arrange project debt financing. The South Crofty project is now significantly derisked.

Last year, Cornish Metals released an independent Preliminary Economic Assessment (PEA) for the South Crofty tin project with highlights of an after-tax Net Present Value of $201m and an Internal Rate of Return of 29.8% at a tin price of $31,000 per tonne. Tin is currently trading very close to this level.

The project is expected to generate substantial cash flows, with a total after-tax cash flow of US$626m over the production period and an average annual EBITDA of US$83m during peak production years. The numbers are particularly compelling given Cornish Metals currently has a market cap of just £44m.

From an operational perspective, South Crofty is positioned to account for 1.6% of annual global tin production over a 14-year life of mine, capable of delivering 49,310 tonnes of tin metal in concentrate over its operational life.

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