Cornish Metals receives $225M funding interest from US EXIM

[Ben Graham]

Cornish Metals (AIM: TIN) has been tapped by the US government for potential funding to support its plans to restart a British tin mine that has been sitting idle for decades.

On Thursday, the UK-based tin miner announced that the Export-Import Bank of the United States (EXIM) has expressed interest in providing as much as $225 million for the South Crofty tin project in Cornwall.

In the EXIM’s letter of interest, the credit agency said the funding would be conditional on the mine providing the US with “a responsible supply” of tin, which the government considers as a critical mineral.

Tin is the ideal material for soldering in electronics, due to its resistance to corrosion and malleability. The metal plays an integral role in connecting semiconductor chips to circuit boards, and amid the surge in AI investments, its demand has surged in recent years.

Around two-thirds of the global tin supply comes from China, Myanmar and Indonesia, making countries like the US vulnerable to supply shocks.

Cornish Metals’ Don Turvey says the LOI is a “testament to the quality and strategic importance of South Crofty” and its “potential to become the first new tin producer in the Western world.”

Reviving historic mine

The South Crofty mine had been producing tin for over four centuries, before a collapse in metal prices forced it to shut down in 1998. Several companies have been trying to revive the operation afterwards but failed.

In 2016, Cornish Metals stepped in and has worked on the project since. According to the company, South Crofty represents the highest-grade tin deposit not currently in production. The proposed mine area hosts 2.9 million indicated tonnes grading 1.5% tin and 2.63 million inferred tonnes grading 1.42% tin. In addition, the company has also flagged a near-mine exploration target of 6 to 13 million tonnes grading 0.5% to 1.8% tin.

Based on this resource, Cornish last year provided an updated preliminary economic assessment (PEA) that outlined a 14-year mine life producing on average 4,700 tonnes annually, with peak production of 5,000 tonnes in year 4.

£198 million cost

The PEA calculated an after-tax net present value (NPV6) of £180 million ($235 million) and an internal rate of return of 20%. The project pre-production capital was pegged at £198 million, with a payback of 3.3 years. The EXIM funding, if secured, would nearly cover the initial capital.

The company accelerated its mine restart plans last year following a £57 million fundraise that brought in the UK’s National Wealth Fund and further backing from Vision Blue Resources.

“This indicative support also demonstrates the ramping up of our discussions with potential project financing sources as we progress towards a final investment decision,” Turvey stated in a press release.

Shares of Cornish Metals closed 2.7% higher in London following the announcement, with a market capitalization of £161.9 million.