Cornish announces GBP135 million fundraise, inks offtake agreement

Cornish Metals PLC on Tuesday announced a £135 million fundraise to advance its South Crofty tin project, as well as an offtake agreement for tin concentrate with Glencore International AG.

The mineral exploration and development company said the fundraise comprises a conditional placing to new and existing institutional investors at an issue price of 60 pence per share, a discount of 41.2% to its closing mid-price on October 13.

In response, Cornish Metals shares closed down 41% at 60.00 pence each in London on Tuesday.

Under the fundraise, National Wealth Fund Ltd will subscribe for up to 29.5% of the total amount subscribed for, while Glencore International AG will subscribe for £11.2 million and Vision Blue Resources Ltd will subscribe for a yet-to-be-announced amount.

Glencore International is a subsidiary of Baar, Switzerland-based miner and commodities trader Glencore PLC.

Certain directors and other investors will subscribe for £1.0 million. The company will also implement a retail offer at the same issue price. The retail offer is expected to close on October 21.

Cornish Chief Executive Don Turvey commented: "We are pleased to announce the proposed fundraise, supported not only by our existing cornerstone shareholders, the National Wealth Fund and Vision Blue, but also by the investment of approximately £11.2 million from Glencore and the entry into the offtake agreement. The strength and calibre of our expanded shareholder register, together with the oversubscribed debt financing announced in May, demonstrate the strategic importance of the South Crofty project to both the UK and the wider Western critical minerals supply chain."

"The capital raised through this fundraise will support the continued development of the South Crofty tin mine towards production. Significant progress has already been achieved both underground and on surface, and this funding will allow us to accelerate development activities while securing the remaining long-lead items essential for the project's delivery," CEO Turvey added.

Cornish subsidiary South Crofty Ltd has signed a six-year offtake agreement with Glencore covering tin concentrate. The commencement of deliveries is aligned with the planned start of production, currently targeted for 2028, Cornish said.

The agreement duration is on the basis of a minimum aggregate delivery volume of 27,513 metric ton unit of tin contained.

Additionally, the companies have signed heads of terms for a USD10 million revolving working capital facility from Glencore.

Glencore shares fell 1.7% to 554.29 pence each in London on Tuesday.

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