REHEARSAL – Cornish Metals Announces Restructuring of Deferred Consideration Payable for Cornwall Assets | 2021-07-02 | Press Releases
VANCOUVER, British Columbia, July 02, 2021 (GLOBE NEWSWIRE) – Cornish Metals Inc. (TSX-V / AIM: CUSN) (“Cornish Metals & CloseCurlyDoubleQuote; or the” Company & CloseCurlyDoubleQuote;) is pleased to announce that it has entered into an agreement with Galena Special Situations Limited (formerly Galena Special Situations Master Fund Limited) and Tin Shield Production Inc. for deferred consideration payable to the sellers in the acquisition of the South Crofty tin project and associated mining rights in 2016 (see press release from March 17, 2016).
Highlights:
- Replacing fixed and variable payments under the original share purchase agreement with fixed payments linked to previously agreed project-related milestones.
- Subject to shareholder approval, the new fixed compensation includes:
- 7,000,000 ordinary shares of no par value in the share capital of the Company (“ordinary shares & CloseCurlyDoubleQuote;) (issued to sellers immediately after receipt of shareholder approval);
- US $ 4,750,000 payable in common shares at closing of either financing for mine dewatering at the South Crofty tin project, and / or any bridge financing (up to 10% of the gross proceeds thereof). interim financing); and
- US $ 5,000,000 payable in common shares upon closing of the development and / or construction financing of a mine, either at the South Crofty tin project or at the United Downs property.
Richard Williams, CEO of Cornish Metals, said: “The restructured payment schedule brings clarity and certainty to the market on what is needed to make our Cornish projects successful. We would like to thank our partners for working with us to achieve this result, which is positive for all parties involved.
‘With the UK’s growing interest in responsible national sourcing of materials and commodities essential to achieving net-zero targets, and thanks to the success of the Cornwall G7 summit’, we see this agreement as the opportunity to accelerate the work we are doing to revive the UK tin and copper industry. “
Pursuant to a share purchase agreement dated March 16, 2016 between the sellers, Cornish Metals Limited (formerly Strongbow Exploration (UK) Limited) (“CML”) and the Company, as amended (the “SPA & CloseCurlyDoubleQuote ;), the Company has acquired a 100% interest in its South Crofty tin project and associated mining rights in Cornwall, UK.
On June 30, 2021, the Company, CML and the Sellers entered into a cover letter (the “Cover Letter & CloseCurlyDoubleQuote;)).
Prior to entering into the Cover Letter, the balance of consideration payable to Sellers under the SPA (the “Deferred Prior Consideration & CloseCurlyDoubleQuote”) was as follows:
| (a) | the issuance to the sellers, in total, of 2,000,000 common shares of the Company following the delivery of a positive feasibility study or the start of commercial production for the South Crofty tin project, whichever comes first; and | |
| (b) | a payment in cash and / or common stock (at CML’s option) to the sellers equal to 25% of the after-tax net present value (“VAN & CloseCurlyDoubleQuote;) of the South Crofty tin project upon the decision to enter into production. In the event that the Company’s market capital on an undiluted basis is less than the NPV when such a production decision is made, CML will pay the equivalent of 25% of the Company’s market capital to the Sellers (the “Market Cap Payment & CloseCurlyDoubleQuote;) and an amount equal to 25% of the NPV less the market capitalization payment will be paid in the form of interest on net profits of 5% from the date of the production decision, as determined in accordance with SPA. |
Subject to receipt of Shareholder Approval for the issuance of Common Shares in accordance with the Amendments (the “Shareholder Approval”) and all regulatory approvals required in connection with the transactions contemplated in the Cover Letter , including the approval of the TSX Venture Exchange, the provisions in the SPA relating to the previous deferred consideration will, in accordance with the amendments, be deleted and replaced in their entirety by the following deferred consideration:
| (a) | 7,000,000 common shares to be issued by the Company to vendors upon receipt of shareholder approval; | ||
| (b) | USD 9,750,000, to be paid by CML to Sellers as follows: | ||
| (I) | a maximum of USD 4,750,000, payable as follows: | ||
| 1. | an amount equal to 10% of the gross proceeds of any financing by the Company; and | ||
| 2. | on a decision by the Company to provide financing for dewatering of the mine at the South Crofty Tin Project, an amount equal to US $ 4,750,000 (less the total of all payments made under paragraph (b) (i) (1) above); and | ||
| (ii) | the balance of the US $ 9,750,000 which has not already been paid in accordance with paragraph (b) (i) above, payable upon a decision by the Company to proceed with the development and / or construction of a mine either at South Crofty on the tin project or on the United Downs property, such payments to be made by the Company issuing to the sellers at closing of the financings referred to, or required to finance the implementation of the decisions, in paragraphs (b) (i) and (b) (ii) above, the number of Common Shares whose value is equal to the relevant payment due to Sellers divided by: | ||
| (iii) | the issue price of any new shares issued to existing investors or third parties in connection with any relevant financing; or | ||
| (iv) | if this financing does not include an equity component, the price equal to the 20-day volume weighted average price of the ordinary shares calculated using the 20 business days immediately preceding the date on which such ordinary shares are to be issued; or | ||
| (v) | in the case of a portion of the payment due under paragraph (b) (ii) above that exceeds US $ 5,000,000, the volume-weighted average price of the Common Shares issued to the sellers in accordance with paragraph (b ) (i) (1) above. | ||
Each tranche of common shares will be subject to a four-month hold period from the date of issue.
Shareholders will be invited to provide their approval at the Company’s Annual General and Special Meeting to be held via live audio teleconference on July 30, 2021. For more information, please see the Management Information Circular of the Company as of June 30, 2021 which will be available on the Company Profile ‘on SEDAR at www.sedar.com.
ABOUT CORNISH METALS
Cornish Metals completed the acquisition of the South Crofty tin and United Downs copper / tin projects, as well as additional mining rights located in Cornwall, UK, in July 2016 (see company press release dated of July 12, 2016). The additional mineral rights cover an area of approximately 15,000 hectares and are spread throughout Cornwall. Some of these mining rights cover old mines that were historically mined for copper, tin, zinc and tungsten.
ON BEHALF OF THE BOARD OF DIRECTORS
“Richard D. Williams & CloseCurlyDoubleQuote;
Richard D. Williams, geologist
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release..
Caution regarding forward-looking statements
This press release contains “forward-looking statements” including, but not limited to, statements regarding the changes, receipt of shareholder approval and receipt of all regulatory approvals necessary in connection with the contemplated transactions. in the cover letter.
Forward-looking statements, although based on management’s best estimates and assumptions at the time such statements are made, are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied by such statements. forward-looking, including, but not limited to: risks associated with obtaining regulatory approvals; risks relating to general economic and market conditions; the risks associated with the global COVID-19 pandemic and any variant of COVID-19 that may arise; risks associated with the availability of financing; the timing and content of future work programs; the actual results of the proposed exploration activities; possible variations in mineral resources or grade; failure of the plant, equipment or processes to function as intended; accidents, labor disputes, title disputes, claims and limitations of insurance coverage and other risks of the mining industry; changes in national and local mining operations regulations, tax rules and regulations.
Although Cornish Metals has attempted to identify material factors that could cause actual results to differ materially from those contained in forward-looking statements, other factors may cause results not to be as anticipated, estimated or planned. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Therefore, readers should not place undue reliance on forward-looking statements. Cornish Metals assumes no obligation or responsibility to update forward-looking statements, except as required by law.
For additional information please contact: In North America: Irene Dorsman at +1 (604) 200 6664 or by e-mail at [email protected] SP Angel Corporate Finance LLP (Nominated Adviser & Joint Broker) Tel: +44 203 470 0470 Richard Morrison Charlie Bouverat Grant Baxter Hannam & Partners (Joint Broker) Tel: +44 207 907 8500 Matthew Hasson Andrew Chubb Ernest Bell Blytheweigh (Financial PR/IR-London) Tel: +44 207 138 3204 Tim Blythe [email protected] Megan Ray [email protected]
