Member Info for southwesterner

I agree regarding the benefits of an ascending share price increasing the value of the underlying asset and becoming self-fulfilling. Its one of those weird paradigms in the junior mining sector, but it makes sense. The biggest drag on realising the full potential NPV of assets is always the ability to finance them and realise that value, so as that becomes more viable, the % of NPV attributed to the company rises.

If CUSN were to run a PEA at spot pricing of $40k/t tin (which would be deemed poor practise according to TSX guidance) it would come out with a NPV (after tax) north of US$500m, which is insanely high. Incidentally the 3-year trailing price of tin is only around $22k/t, so you are down to an NPV of US$130m for that on the 2017 PEA, slightly higher if they used updated resource. Just shows the leverage here. Another year at $40k/t will push the 3-year trailing price up to above $30k/t incidentally, wherein South Crofty will look pretty strong, NPV around US$330m - which is 2.5x the current market cap. So for anyone wanting tin price exposure, its a good bet.

The project has huge leverage to the tin price, and practically nothing else, so it is hugely attractive to those who want exposure to rising or sustained tin prices. Given tin is the best performing LME metal in 2021 by a huge margin.... copper, nickel, zinc, lead, aluminium all rose between 18-42%.... tin rose 93%. So it makes sense there are a lot of market participants who want tin exposure, leveraged in the form of a mining project - and the choices are minimal. There really are very few options in the market, and fewer still in safe jurisdictions. ASX:VMS who have a tin-tungsten project in Australia, ran a SPP this week to raise $1.3m, and got over $8.7m of applications, so massively oversubscribed. So the market really wants tin projects, and there are very few out there, incidentally that one is much lower grade than South Crofty and likely tricky for permitting. Processing will also be much more difficult due to the complicated mineralogy of the tin skarn with magnetite, tin sulphides, scheelite, etc. So the bar for quality of projects that the market is willing to buy into is decreasing. Anyway back to CUSN, this market demand for exposure to tin is clearly driving the share price over the past few months, and that will likely continue as this is one of the best high grade offerings on the market, and there is no doubt as to economic viability at the current pricing. Plus they might find something somewhere else if they get lucky with the exploration...

Well, can't say I didn't call this pretty close to the mark... immediately after the "Funding and PEPR Update" on the 8 Oct '21, see post below:

"I mean its all written in the most encouraging language, everything is imminent - but thats been the case for some time. On the 31 March, the PEPR was to be fully approved in Q2. On the 25 June, the PEPR was going to be finalised in July... now its by "the end of the year".
As for the financing, what kind of "top global bank" will give them a $10m loan with no equity component, based on the back-of-the-envelope "studies" they have done. I really would be surprised if that turned out to be the case, but anything is possible I suppose."

This is a company that chronically underperforms the BoD predictions, which have to be taken with more than a small pinch of salt. If you look back through the years they were imminently to commence production in 2015 at a coal mine in NZ (Tatu), and discover a gigantic nickel deposit in WA (Hanns camp/CARE), but both of those projects came to naught. Don't get me wrong, in this game you have to cast a wide net, but you also have to be vaguely realistic if you want to come out of it with any credibility intact after a few years.

Whilst they now have an asset with clear potential (Redmoor) they have no pathway to realising any value from it without a partner with more expertise and access to capital. They said they were going to bring in a partner or sell it in H2 2020, and yet nothing has happened, possibly because their expectations to get much more than what they paid for their 50% share from NAE are totally unrealistic.

Unconvinced by the plan on LCCM. LCCM may well be profitable, if their calcs are right and they can execute a restart successfully, big ifs... but no one is going to stump up the capital costs without more detail in the plan, some back of the fag packet calcs by the former owners who sold you this "project" and want to sell you more equipment, just isn't good enough after 4 years of ownership. Never mind the spiralling Capex requirements, from $1.75m to $6m, over just 2 years. If you read past RNS's you can see "Government Approvals" for Leigh Creek were granted on 29th Aug 2018, and production commenced on 11 April 2019. Yet here we are 2-3 years later, and neither of those things have actually happened! Delusional, and certainly not going to inspire any confidence from partners and investors.

And we've also seen Cobre doesn't even pay for it's sustaining Capex + the BoD's generous compensation packages without additional equity raises, so I'm not sure that is going to pave the way forwards.

I doubt LCCM can be sold in current state. The path forwards is either to sell Redmoor for the bulk of the required Capex to restart LCCM, bring that to production successfully, and then you have a 2p company again. Or for JP to "retire", and SML to refocus on Redmoor with a major equity raising to move the project forwards.

"Perhaps I have misunderstood, but I thought some considerable amount of initial sorting was planned to take place underground. This I understood was going to considerably reduce quantities hoisted to the surface. And underground voids were going to be used to take backfill/waste."

Thats theoretically possible, and may well work, although I am not sure any testwork has been conducted yet on ore sorting at Crofty? There's no mention of any underground processing in the existing PEA, so yeah an opportunity for optimisation there. Its a great idea, just, its a concept still, not something you can build (or finance) a mine around yet...

Yeah he knows his stuff, a decent interview. There must be someone out there with the foresight to finance the extended drilling programme at Mynydd Parys to follow on from the drilling taking place from now to March '22. That would put the project within touching distance of producing a really strong feasibility study, with an NPV of £100m+ and would spur a massive revaluation. Jo just needs to persuade the right people now to give him a bit more cash, as it looks like the wider market is still mainly blind to the opportunity here at the moment. Probably due to the long history of false starts at the company, but the economics have fundamentally shifted now, this orebody is very amenable to modern low cost mining methods. Where else can you find a project with so much copper (and zinc) in a strong jurisdiction, worth practically nothing currently.

CK; "Just to be clear, when I say opening wheal maid, I mean for further drilling and exploration."

Oh ok that makes sense if they seriously think the depth extension of Hot lode and its parallel structures is economically viable. I'm not sure you'd want to incur the cost of reopening Wheal Maid decline until further drilling and a PEA had been conducted on the project though, to check what the viability is. I'm not seeing anything in these drilling results which is making me think this is a sensible course of action in the immediate future, but there are a lot of variables so I'm not certain.

Val; "What would the combination of these two things cost? £40m (PP) and £Xm (tunnel)?
This could be a much quicker (18-24 months vs 4 years) and cheaper way of getting into production and a way of financing SC. So, short circuiting /reducing the need for £100m.
It would mean less finance and perhaps existing shareholders could finance it without looking for external additional investors. That would be a game changer.
What do you think?"

Certain other infrastructure costs related to facilities would be incurred not just the tunnel and processing plant, but yeah overall you could probably see a reduction in capital from £100m to £70m or so. But remember this would likely happen in parallel with dewatering of Crofty, as I doubt anyone is imagining they find more than a couple of years of high grade ore in this area. And then remember this is totally hypothetical as we have no idea there is anything there yet!

Valu; "What do you see as being the main technical challenges in re-opening SC?"

100+ year old shafts that have been submerged in water for 20 years, and are no doubt full of rusted steelwork, being reopened as the primary means of transporting ore, men and materials. Thats a big job to sort out I can assure you. And then the mining method has to comply with modern health and safety legislation so all the old methods are out and you have to use LHOS basically, but you also need to avoid excessive dilution as hoisting capacity is limited and you dont really want to be hoisting sub 1% ore. And then you have the heat and radon at depth, so you are going to need vastly improved ventilation compared to what they used to have. Its going to be challenging, but if the price is right, if the economics stack up, anything is possible. But there is a significant amount of technical work to be done to bring the project to a Feasibility study level.

"Thats 42500t of WO3, 7200t of Sn and 28,000t copper.

At current spot prices that equates to:
$1280m of tungsten
$290m of tin
$270m of copper

So 70% of the contained value is tungsten, 16% tin, 14% copper."

And going back to the compare with Crofty theme for comparison... the 2017 Crofty PEA had around 40,000t of Sn in the mine schedule, in addition to minor copper/zinc, worth around $1600m now. So the overall value of the contained metals is very similar, the difference is Crofty's ore is 98% tin by value, rather than 16% tin as per Redmoor. And Crofty is much higher grade, as its extracting $1600m of metal in 2.5Mt of ore, rather than $1900m of metal in 7.2Mt of ore. So Crofty ore contains around $640/tonne of metal, whereas Redmoor contains around $260/tonne. Remember this does not include mining costs, recoveries, smelting fees, etc. And another word of advice, ignore the declared "SnEq" grades, they are no longer valid due to metal price changes.

Sammy; "I remember our BOD saying about 2 years ago that our Redmoor project was further advanced and potentially as good a resource as the (Strongbow) South Crofty project. So, what I genuinely can’t way up now is why is CUSN (formerly Strongbow) market cap at £75m and yet the SML Mcap remains at a lowly £7m?"

I can't recall the BOD saying that specifically, but I suppose its possible they said something along those lines. However, that doesn't necessarily make it true... Whilst Crofty contains a fairly deep tin resource, which requires significant pumping and shaft refurbishments of considerable technical difficulty to access, it is also already has around half of the resource as an indicated component, and enjoys full planning permission. In comparison Redmoor has no planning permission, and is made up entirely of inferred resources. I don't think anyone can reasonably argue that it is more "advanced" than Crofty -right now. Would it be possible for Redmoor to catch up to the position Crofty is in now, if nothing happens at Crofty, and £millions are ploughed into Redmoor? Yes. But that doesn't seem to be what is happening. Nothing has been spent at Redmoor for nearly 3 years other than a bit of soil sampling done through grants. Presumably partly why the geology team left.

Valu; "Not only will SML be eyed up for its assets, but as CUSN becomes more and more likely to go ahead with re-starting South Crofty, the more likely a process plant for that will become. So SML will be able to transport product to SC for processing. That make a go ahead at Redmoor more likely too. And that is great news for the SML share price."

I think its highly unlikely Redmoor ore would ever be transported the 60+ miles by A-road, west to Crofty when there is a more suitable alternative just 20 miles to the east. The capacity of any future processing plant at Crofty will be far too small to accomodate the comparatively low grade Redmoor ore, and it will be designed primarily for processing tin (and possibly copper), whereas Redmoor ore is mainly tungsten. It may be possible to use ore sorting to reduce the quantity to be processed, but this would require testwork, which has not been conducted.

"Anyone have the figures for likely contained tin/ Tungsten at Redmoor and its value?"

Yes, using the most recent (2020) mining study schedule which is 7.2Mt @ 0.59% WO3, 0.10% Sn, 0.39% Cu.

Thats 42500t of WO3, 7200t of Sn and 28,000t copper.

At current spot prices that equates to:
$1280m of tungsten
$290m of tin
$270m of copper

So 70% of the contained value is tungsten, 16% tin, 14% copper.

Of course that doesnt include recovery factors, dilution, smelter fees or the cost of mining and processing the ore, so do not construe that to mean the project is worth $billions, it most certainly isn't.

If there was high grade tin in the upper section of the GFL around Carnkie, that would be very advantageous as an early mining source, and could be accessed in around 18 months from the existing Tuckingmill decline as CK points out. So the building of the processing plant and access to the GFL could be carried out in parallel. Possibly would have to consider cut and fill if the lode is flatly dipping, but if the grades are good (at least 1%+ tin required post-dilution) this can be a suitably selective mining method. Of course this is hugely conjectural as we have no idea if there is anything of any significance there yet!

CK; "On Wheal Maid, I think it is now highly likely that the decline will be reopened, probably in the next 12 months. The end of tge decline is around 10 metres from the structure currently being drilled"

As for United Downs, and this RNS, I think you have to bear in mind this is the at-depth extension of the United Mines Hot lode, and associated structures. These are narrow veins, the grades are reasonable for copper, but the depth is a problem, you are looking at 2 years of development and significant cost and pumping to get down there. This is not an extension of the shallow UD lode structure in close proximity to the Wheal Maid decline, that was intersected by the CL drilling to the west, so I am not sure what reopening that would achieve. Previous drilling showed the "UD lode" appears to be a minor south dipping lode and has only been traced for a short distance from the original hole. I am not convinced they have yet found enough potential mineralisation in this area to constitute a viable project, but its too early to write it off as well.

Certainly though I think it'd be hard to argue professionally that these fairly inconclusive results are the reason for the recent SP rise, if so that makes little sense. So what is really driving the rise remains to be seen, but I still believe the vast majority of the potential value of the share lies in the known high grade tin resources at South Crofty - not the unproven concept of lithium brines or the UD project - but time will tell what is right on that. If someone was willing to put forwards the capital to pump out Crofty, and they release a revised PEA using the new resource and updated prices around the same time, that would be the kind of thing that could justify a SP rise. The potential value of South Crofty at current tin prices is immense, if they can monetise it and prove a viable development pathway forwards, but that remains a significant technical challenge.

I think ultimately its worth a lot more than 44 cents, if they can get a funding solution to move Crofty forwards. But, quite why it went on this massive spike today it is not clear. There's been some weird interplay going on with the TSX driving higher, and AIM trying to pull it back down, for a few days now. That finally broke today with AIM following TSX higher, but now TSX has changed its mind. Maybe this is something to do with the arbitrage someone mentioned earlier today, stocks moving between exchanges etc? Either way, some very odd games going on, but as long as the net movement is upwards, happy days.

Crazy trading on the TSX today, massive pump & dump - not seen anything like this in this stock before. It was up to 44 cents at one point, up 38%. But now its back down to 33.5c, only up 5%. Thats insane levels of volatility on what is a C$90m market cap stock now...

LSE forced a statement that there was no news, which seems to have killed off whatever rumour was driving the price up.

"I've just looked on google and it's saying that the Market Cap is now £6.58m - i think a few days ago it was around £7.05m - drop in around £400k? Maybe the payment to the DEM has gone out - (for the environmental security bond). Might be chatting out of my A*rse though, but explains the sudden drop in SP..."

Afraid so. The market capital has nothing to do with the amount of cash held by the company, or any other transactions or cashflow. The market capital is the share price multiplied by the number of shares on issue, so its directly proportional to the share price. So the market capital has decreased, because the share price has decreased, its that simple.

Let say, for simplicity, if we assume the SP is 0.35p now and the market cap is £7m, if the share price decreases to 0.25p, then the market cap will be £5m, as (0.25p/0.35p)* £7m = £5m. If it increased to 0.5p, then it'd be £10m as (0.5p/0.35p)* £7m = £10m.

Hope that solves that mystery for you. Same with all shares and market caps.

The Canadians aren't stupid, when it comes to mining they know their stuff. CUSN has the highest grade large scale tin project in a safe jurisdiction in the world, and great exploration prospects. Tin prices have just hit all time high record levels.

https://www.mining.com/soldering-on-tin-price-surges-past-40000-after-jakarta-jolt/

https://www.sharecast.com/news/aim-bulletin/great-western-mining-signs-up-james-blight-as-exploration-manager--8639528.html

Another one gone. That was him in this interview with PW;
https://www.proactiveinvestors.co.uk/companies/news/942029/cornwall-resources-commence-redmoor-west-exploration-program-942029.html

"I don't think anyone with even the slightest knowledge of the company would worry unduly that they might fall into that trap. They have skilfully avoided the temptation for nearly half a century!"

haha, look, I take your point, but that said, this is not at all unusual in the global mining industry - for a deposit to be looked at over a period of decades through multiple cycles before eventually being developed. Look at Cononish gold mine... was being developed in the 90s by Fynegold Exploration (subsidiary of Toronto listed Caledonia Mining Corporation) - forgotten for a decade or more, then snapped up by Scotgold and developed into production recently. What is unusual is for one company to have been in control of the deposit for so long and not gone bankrupt or given up and relinquished or sold the project. So the unusual thing with Parys Mountain, is not the fact its been through a few cycles and not been developed yet - but the fact Anglesey Mining Plc has survived for 30+ years...

"SW ignoring my incorrect thought that Parys might be part of a giant copper field. Is it likely that the resources do on fact extend beyond the boundaries of the present site on your opinion"

I'm not a geologist, I'm not really in the business of speculation on that sort of thing. But we do know VMS deposits often form in clusters, so its possible there are further deposits in the wider Region, although finding these is not always straightforwards. Personally, at this point, I'm not interested in the wider potential, because the potential for expansion at Parys Mountain itself is so huge, there's no point going greenfield exploring for a new site when you have open mineralisation all over the place at an existing potential mine site in close proximity to existing delineated resources.

VMS deposits nearly always have multiple lenses - we know at Parys Mountain we have the Northern Copper Zone, the Engine Zone, and the White Rock Zone. I would think it very likely that within the Parys Mountain site, there are more lenses or "zones" of ore waiting to be found, and I could be almost certain there are significant lateral and depth extensions to existing zones. Those that say Parys Mountain has been over with a fine-tooth comb, and extensively studied - are completely wrong. That is utter rubbish I'm afraid, a total fallacy. Yes, a lot of geology graduates have wrote dissertations about the deposits, but that does not equal drilling and modern exploration investment has occurred here.

The facts are the site has not been significantly explored at depth, and there are multiple significant drill intersections of mineralisation that have not been followed up and are not within the current resource. The idea that the extent of mineralisation is fully understood and explored is simply untrue. I know this as a fact, but if you doubt me and want to hear someone else say it, then just watch the Jo Battershill proactiveinvestors interview from 1st October, and listen carefully to what he says.

I think anyone expecting substantive government grants for Crofty, are going to be sadly disappointed. I would of course support a major grant, but I just think its very unlikely. R&D grants for a few £m are possible, but I can't see the govt stumping up a larger slice of the funding required.

"Consequently I would be surprised if results are anthing other than excellent and to some extent this drilling I suspect is to confirm what BOD and advisers view as near certainty."

I'd expect the drilling to move most of the inferred resources to indicated in the White Rock Zone, although some may remain. But the greater prize here is metallurgical testwork which could improve the assumptions used in the PEA, allowing greater recoveries of metals to the correct concentrates, and potentially a 5-15% uplift in total revenues, which is very significant for project economics. The main reason for this is because smelter offtake terms are very specific about the contents of metals in each concentrate - zinc smelters do not want lead contaminating their zinc concentrate, and nor do copper smelters. This mattered less in 1990, when the pilot plant was run, than it does now, as modern smelters are more sensitive to the contamination and offtake terms more onerous. All I can say with some certainty is that the revenue losses due to the contaminations are very significant for this deposit, and likely NOT a feature of the deposit, but rather of the limitations of the pilot plant in the 1990s. So if core can be obtained, and reanalysed, it is likely much better smelter revenues can be achieved in a feasibility study.

"giant copper field"

Going back to this and veering off topic a bit, there is evidence of another VMS type deposits in North Wales at Cae Coch, in the Conwy valley. And then there is actually a massive Porphyry type copper deposit further south in Snowdonia, called Coed y Brenin. It was explored by Riofinex in the 60s and 70s, and has approximately 200Mt @ 0.3% copper + "minor gold and silver". What constitutes "minor" is a matter of debate, it might be quite significant. Unfortunately its in Snowdonia National Park, which is why its been forgotten and presumed to be unviable. If there are higher grade portions they may be developed with less intrusive underground mining methods though possibly, and we know from the Woodsmith project that development in National Parks is not *impossible* - but certainly Parys Mtn is a much easier sell from a permitting point of view.

"I think will show yet more reserves"

Thats pretty unlikely. I mean, to be a stickler, there are no "reserves" by the modern definition at Parys Mtn, reserves can only be declared after a positive pre-feasibility study. But presuming you mean resources - then even in this case, the purpose of the drilling campaign is to infill inferred resources, and collect core for metallurgical and geotechnical testing. When I say "infill inferred resources" what I mean is increase the drill density in the blocks of mineralisation that are categorised as inferred resources, thus allowing them to be recategorised as "indicated resources".

So its unlikely to substantially increase the total resource, it just recategorises inferred resources to indicated resources. This is significant because only indicated (and measured) resources can be used in a pre-feasibility study to form reserves - inferred resources cannot be used.

"I don't know anthing about geology and how copper seams work.
But given that there is obviously plenty at Parys and interestingly historically at Llandudno and near Caernarvon latter other side of Menai strait I wonder if Parys sits in middle of giant copper field. Giving opportunity at later date to strike deals with adjoining land owners."

The answer to that direct hypothesis is unfortunately no. If you look at a geological map of Anglesey, you can see the general trend of the rock formations is NE-SW, ie. parallel to the Menai Straits. Mineralisation on Anglesey, is thus unrelated to mineralisation on the North Wales mainland, and that in turn is separate to the Great Orme (Llandudno) which is of Carboniferous age. They are different deposits of different paragenesis. That said, Parys Mountain is a VMS deposit, and these do tend to occur in clusters, so all the Ordovician host rocks in North Wales are prospective for further deposits, but that doesn't mean the whole area contains a "giant seam of copper" unfortunately.

"That said I long for the day when the company actually extracts something rather than add more and more to the reserves."

The order of the day, I'm afraid, to build a modern metal mine (or any mine of scale) is drilling, studies, more drilling, more studies. The market will eventually recognise value when there is a path to development, but long gone are the swashbuckling days of lets just get in there and start mining. That isn't going to happen, the capital required to achieve production is immense, and no one will provide the required investments, if the full Feasibility Study procedures are not followed. The procedures and methodical approach exist for a reason, to protect capital investments - even with them, mining has a reputation for being incredibly risky. Without them its a total casino, so yeah, AYM is going to do a full feasibility study, and it will take some time and investment to realise. The end result though I think will be very successful.

"Wow!,I mean Wow!!,this will be huge vii when those drill updates come through imho"

What drill updates? No drilling is taking place currently. In that document they've just said they have identified targets for a future hypothetical drill programme. And before it can take place they will have to apply for a GPDO drilling permit from Cornwall County Council, which will take a few weeks to be granted, and there's nothing filed yet for Redmoor. So I wouldn't hold your breath for drill updates.

Absolutely on the right track, and getting things done. The commencement of the drilling programme is a key step to provide additional information... I'm really just paraphrasing the RNS, but the drilling will provide core which can be analysed for geological, geotechnical and metallurgical data.

The geological data will firm up much of the remaining White Rock Zone into an indicated resource, allowing it to be brought into a Feasibility Stage mine plan (and ultimately into a probable reserve).

The geotechnical data will provide mine design data, to allow ground support requirements to be assessed, and stope design parameters for the Feasibility study.

The metallurgical data is possibly the most exciting from a business point of view, I think there is huge potential to improve on the PEA assumptions in this area. Its not just about improving metal recoveries, its about getting metals to report to the correct concentrates - and this is a huge potential value-add for the project. The Net Smelter Revenue for this project is considerably below other comparable projects for the same metal recoveries, and thats because this project is using early 1990's testwork from pilot plant data, which was not fully optimised, whereas other projects are using locked cycle flotation lab scale testwork which has been more optimised. If they can *prove* that the PEA assumptions can be improved upon, you can easily see a 5-15% lift in net smelter revenue, and thats all extra profit going to the bottom line, so it's very significant.

The environmental permitting gaps analysis is also an important workstream. It's good to see "2022" being spoken about with regards to delivery of a Feasibility Study (presumably a PFS?) - although it would be even better to see it put into a proper presentation onto a GANTT chart, so it can be seen exactly how that all plays out etc. They will of course need further financing to complete a PFS, but I see no reason in current market conditions why that could not be raised through a private placement to strategic investors, and I suspect in good time, it will. Sale of the LIM share is another potential route to financing this activity.