Cornish proposes £135m financing, secures tin offtake agreement with Glencore

The company has announced conditional direct subscriptions from Glencore International for £11.2-million, as well as Vision Blue Resources, National Wealth Fund and certain directors of the company.

Cornish will use the net proceeds from the placement to develop the South Crofty tin mine, in Cornwall.

Cornish and its South Crofty subsidiary have also secured an offtake agreement with Glencore, which comprises a minimum aggregate delivery volume of 27 513 metric ton units of tin contained from the start of production for a period of six years.

This covers the full scope of planned tin concentrate production from South Crofty.

FUNDING RATIONALE

On May 7, the company announced a successfully completed oversubscribed placement of $210-million of new six-year, callable senior secured Nordic Bonds with a coupon rate of 13.5% a year.

The placement concluded on May 6 and was met with strong investor demand across European, North American, and other international markets. The Nordic Bonds were admitted to trading on Nordic ABM on August 5.

The proceeds of the issue of the Nordic Bonds are being held in an escrow account and will not be capable of being drawn down by the company until the conditions precedent to release from escrow have been satisfied.

An important condition precedent is for Cornish to have completed an equity fundraising of at least $161-million by November 21 (unless such date is extended with the bondholders’ consent).

The fundraising, if approved by shareholders by duly-passing the resolutions at a general meeting on November 9, will satisfy this condition given the US dollar equivalent of the proposed fundraising quantum is about $188-million.

The fundraising, together with the proceeds from the Nordic Bonds once capable of drawdown, positions Cornish to develop South Croft to first production in mid-2028.