Tin explorer Cornish Metals (AIM/TSX-V: CUSN) has published a Preliminary Economic Assessment (PEA) for the South Crofty project, highlighting a base case after-tax Net Present Value (NPV) of US$201 million and Internal Rate of Return (IRR) of 29.8%.
The company has been dewatering the historic South Crofty mine, which flooded since its closure in 1998, and has been developing the project with the aim of entering production in 2027 for a 14-year mine life. The project is fully permitted with mining permission to 2071, and with full planning permission to construct a processing plant.
Cornish Metals Interim CEO and Director, Ken Armstrong commented: “This PEA is an important milestone for Cornish Metals and our goal of bringing responsible tin mining back to Cornwall and the United Kingdom.”
The PEA outlines a mine throughput of 500 ktpa at an average of 0.94% Sn, and a processed throughput of 250 ktpa at an average of 87.8% tin recovery, for a production total of 49,310 tonnes contained tin over the 14-year mine life. In addition to tin, the PEA includes life of mine production totals of 3,844 tonnes contained copper and 3,225 tonnes contained zinc.
Pre-production capital costs are placed at US$177 million, and post-production at US$54 million, while the average life of mine net cash cost is reported as US$12,705 per tonne tin and an all-in sustaining cost of $13,661 per tonne tin.
Highlighting the project’s economics, Chief Operating Officer Owen Mihalop commented: “The PEA results are compelling with a post-tax NPV of $201 million and IRR of about 30% at a tin price of US$31,000.” The company expects an average annual post-tax cash flow of US$65 million in years 2-6, peaking at US$82 million in year 2, and a post-tax capital payback period of three years, reflecting a lower all-in-sustaining cost of around US$12,400 per tonne tin in the early mine life period. Mr Mihalop continued, “The low all-in sustaining cost of about US$13,700 per tonne of payable tin is an important metric and potentially positions the project within the lowest quartile of the global tin industry cost curve.”
The mine design utilizes existing developments where possible, with new ramps developed to provide mechanised access to other levels, and mine waste will be backfilled as a paste into historical void spaces meaning that the underground operation does not require surface tailings storage. Additionally, Cornish Metals intends to use the historic Wheal Jane concentrator as the basis of the processing circuit, which the company has used for its 2023 metallurgical testwork.
Our view: We are happy to see the publication of the South Crofty PEA, as both a key milestone for the project, and highlighting the mine’s operational and financial potential key infrastructure already in place. Cornish Metals’ exploration activities in the neighbouring Carn Brea area also provide potential for future resource expansion and extension of mine life.
Cornish Metals Inc is a member of ITA’s Explorers & Developers Group.
