Member Info for Valuation-it-is

Fira start dates and likely shortening of development/financing process.

I guess we both had in mind a year of drilling /exploration before de-watering. It would make sense to improve the resources and value of the company as much as possible before raising funds, as the extra security that could be offered to those providing finance would reduce risk, and thereforebe likely to bring the cost of that finance down. And why rush when the price of what will come out of the ground is rising week by week also reducing risk?
At the Cornwall Mining Conference, one speaker promulgated the idea that conventional approaches to bringing mines on stream would be likely to be shortened or short circuited. This is because the demand for materials - tin, lithium and copper was going to far exceed supply over the coming years. We can see examples of how the shortening of the time frame might happen, with off-take agreements being signed in exchange for cash up front to be used to develop the mines. TUN did that for tungsten, tin and aggregates. The next step may be to see big end users buying up mining companies to ensure their supplies. Tesla, VW, Toyota?

Copper1 addressing your queries re CUSN
"how is this company tied to the land owners"

The rights to the minerals below have been separated from the ownership of the land above. Mineral rights owners have legal rights to explore and extract minerals from beneath land owned by others. CUSN owns mineral rights beneath surface land of over 15,000 hectares 30,000+ acres.

Partnership with Cornish Lithium? No. CUSN has sold exploration and extraction rights to lithium and other minerals IN BRINE to Cornish Lithium. In exchange CL pays CUSN a rising annual fee (£100k per annum from 18/1/22) and will pay a royalty to CUSN when production starts. CUSN also has a 25% free carried interest in the first project CL undertakes (on CUSN rights area) details on page 8 of https://cornishmetals.com/site/assets/files/4930/202110-cusn_corp__pres__web.pdf

Mining expected to begin when?
My understanding listening to Richard Williams talking on the ITA zoom seminar

https://m.youtube.com/watch?v=UC5k_CLbxpM&feature=youtu.be

is that it will take 18 months to de-water South Crofty, then a further 18 months to repair the mine during which time a process plant will be built on the SC site. This 36 month period will probably start when CUSN has got the finance in place for de-watering UK£15m, feasibility study, process plant US $35m and other repair re-furb etc US$85m. Up to today my understanding has been a 48 month period ( rather than 36) so clarification best sought.

Lovelyboy ..... contaminants

The one that was mentioned to me was magnesium. I noted "While all product used by the battery industry has to be at least 99.5% lithium carbonate, the makeup of the remaining 0.5% is important; higher amounts of iron, magnesium or other deleterious materials makes brine a less attractive product. "
I understand that CL has found the brine at UD to be very low in magnesium so the cost of removing it was thought to be very low too. This is probably not the case with brines elsewhere. So CL has an advantage perhaps.

MO Why hard rock before DLE from brine?

I have been going through my notes trying to work out why CL has chosen to prioritise rock, when there seems, as you explain, to be a good case to prioritise brine.
I have come up with a few clues. The time lines appear to be governed by planning permissions and finance. I think CL may have received a grant to build a pilot plant and to receive the money this has to be done within 18 months of the grant. If that grant was for Trelavour that might explain why. Perhaps also CL has competition on the rock side from British Lithium which is spurring it on - the first into production may scoop the pool of customers.

CK Hydrostatics.

I wonder if there is a difference? The glass of water just has atmospheric pressure above it - both above the glass water and the water in the straw.
Go down 2 km in a borehole and the brine at depth has 2 km of rock bearing down on it, whereas the brine in the borehole only has atmospheric pressure bearing down on it. Like striking oil! a gusher perhaps..........................

Major Oak
2 comments
1. Am I right in thinking that the micro beads can have different coatings and therefore the brine can be sent through a series of tubes with different beads in each one, each to take out a different mineral? That would be incredibly efficient.
One wonders if they cant make the water so clean they could sell it? A tonne of water delivered for domestic use down the SW Water distribution pipes costs around £3 / tonne. I guess for farms they buy in bulk and pay less but even at £1 a tonne if you are processing 40,000 tonnes brine for a tonne of lithium, that might be a significant extra income.

2. Your logic about which comes first DLE from Brine or Lithium from hard rock makes sense to me. BUT I asked CL recently about this. The response:-".....we are targeting end 2025/early 2026 to be in production from Trelavour and you are correct to say that we expect to be in commercial production at Trelavour first."
So I think it is worth having a good think as to why they are going the hard rock route first. (Not good for CUSN royalties!) One idea of mine - (so low confidence in it) is that by using x ray or other sorting they could increase the lithium percentage before they chemically process it using the Lepidico process . And Trelavour has some mined material already on surface I think so perhaps no mining cost there.. And, another idea is - as the area is surrounded by the Cornish Alps - hundreds of millions of tonnes of China clay waste - which I understand has the same percentage lithium in it as the JORC resource- the idea may be to process that at Trelavour too, That would have no mining cost just the cost of lifting it onto a conveyor. Perhaps worth reverting to CL for an explanation!

LovelyBoy

I got excited about the possibility of extracting something valuable from the de-watering process, so I asked about it. Unfortunately the water in the mine is loaded with contaminants which, when I asked 2-3 months ago, rendered it unviable.
Whether anything has changed on the tech front recently I do not know. I think it unlikely. There was a lot of iron oxide in the water if I remember. JW said they tested the water coming our of the adits.
The good thing about brinefrom depth at UD is it has very low levels of contaminants compared to elsewhere in the world. So processing it is less costly. Perhaps a competitive advantage.

LovelyBoy

At the risk of telling you what you know already, but hopefully to clarify matters for you, Cornish Metals Inc (CUSN) has sold rights to extract minerals from Brine on the CUSN mineral rights estate, to a company called Cornish Lithium ltd (CL)a private company.
CUSN is exploring for tin, copper and silver at United Downs (UD) to mine conventionally. It published some results of its exploration yesterday. CUSN also owns South Crofty(SC) and 15000 hectares of mineral rights.

Cornish Lithium (CL) has drilled some holes to try to find Lithium in Brine. The first at UD was 5km deep and CL did it with a partner call Geothermal Engineering in a JV called Geocubed. Another shallower hole was also drilled at a different site at UD, by CL on its own. It is at this site that CL has a test rig to demonstrate the DLE (direct lithium extraction) process.
OFF the CUSN estate, CL is exploring for Lithium in hard rock(mica) at Trelavour, part of Lord Falmouth's estate. CL published a maiden resource statement about Trelavour recently. CL also has a jv with Imerys which owns huge waste tips which contain mica.
The discussion on this CUSN board has developed to include CL's activities because CUSN has a small stake in CL (about 1%), receives an annual fee from CL, and will in the future,if all goes well, receive royalties on CL's production.

CK " to get 1 tonne of Lithium a lot of water is going to have to be processed."

But processing the water looks as if it will be very easy AND inexpensive. At UD we were shown how they are doing it on a test basis.
They put millions of tiny beads which have a special coating into a plastic tube. The brine is then passed through the tube and the coating attracts the lithium etc from the solution. The surface area of all the tiny spheres is vast. Every so often the spheres are "cleaned" of their deposits and the minerals extracted. The spheres are then re-used. The equipment needed for this is very cheap.
I think Major Oak spoke of a 97% removal of minerals in solution achieved by other companies in this field. As you say a lot of brine has to go though to extract a tonne of lithium. Whilst they have not given ppm figures for brine coming up from 1-2km down, they have for the 5km hole - it was 260 ppm. So to get 1 tonne of lithium with a 97% extraction rate, you would need to feed through almost 40,000 tonnes of brine. What that suggests to me is that pumping costs are going to be a key cost. What I do not know is what form this lithium takes - a carbonate for instance. Perhaps MO could advise?
There are a number of trade -offs to consider. The depth of the hole - 5km costs £20m, a less deep hole of 1-2km costs £200k. The ppm (parts per million) figures for the 5km hole was 260. For a 1-2 km hole it is not yet announced but less. Pumping from 5km is going to be considerably more costly than pumping from 1-2km. Then the energy that can be extracted from fluid at 5km is considerable with the temperatures being around 190 deg C, nearer the surface temperatures fall to 120 deg. So the electricity etc that can be made is less. The greater energy from greater depth can perhaps overcome the greater power needed to lift the fluid to the surface. But all these matters are subject to the testing that CL is doing now and in Q1 2022 at UD.

https://news.engineering.utoronto.ca/anti-viral-copper-coatings-could-help-slow-transmission-of-covid-19/

MO
Great post . I like the idea of a huge underground lake stuffed with valuable minerals all assessed and ready to be pumped out!
Which of E3 SL, NEL and DCTA offers the most upside at current share prices.?

oneandonly1
I listened again and did not pick up anything about being in talks. But I do know that RW has been contacting potential investors over recent months so one could say talks are and have been going on for some time. What stage they are at and who with only RW can tell you - via an RNS when ready.
The good news for us, is that while talks have been going on, the background has been improving i.e. tin price has been rising, calls for resilience have been growing and interest has come through in cash form in the sector in Cornwall/Devon. (CL Crowdcube fundings and TechMet, Tungsten West £75m raise (Institutions were Schroders, Orion, Lansdowne partners and AXA), as well as CUSN's IPO float and raise). I would be surprised if there are not several parties who would be interested in project financing SC. HMG has also set up an infrastructure bank, so that might be helpful too.
RW, in the interview, estimated the cost of the process plant as being US$35m, WITHIN the total pre-production capital cost of US$120m. RW estimated that it would be 18 months after de-watering that the mine could come into production. That is a total of 36 months from the start of dewatering - 12 months less than I had in mind.
By categorising SC as a development situation and UD as an exploration project, it seems clear SC is going to drive CUSN now, but as discussed here yesterday, there could be other exciting developments to add into consideration - Carnkie being just one of them.
We will know if someone in Canada is trying to build a stake, as when they get to 3% they will have to disclose the fact by issuing a TR1. The shares seem tightly held - so a small amount of buying sends the price up sharply. Good news for those already invested.

MajorOak and LovelyBoy Thanks. Your comments much appreciated. And many thanks for your input too. I am invested in CL as well as CUSN, so info about the world of lithium is valued highly.

MO, I know you are keen to have exposure to lithium producers. If you haven't already invested in CL, why not drop them a line asking to be put in touch with any shareholders or executors for estates that wish to sell before there is a market. You might be lucky. The two recent issues were first through Crowdcube at 16p (EIS compatable) and secondly to TechMet at 13.5p (not EIS)

SW'er thanks again, "you dont really want to be hoisting sub 1% ore"

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.

Many thanks Southwesterner for your thoughts.
Re using TUN's facilities rather than as yet to be built CUSN plant, it would also seem more likely that the TUN setup would be more suitable as both TUN and Redmoor have low grade ore. But if TUN tries to drive too hard a deal, SML might have the possibility of going elsewhere. All conjecture at the moment....

Southwesterner "So the building of the processing plant and access to the GFL could be carried out in parallel. "
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?

CK"They've been drilling there now for around 3 weeks"

They were collecting cores from Carnkie on 3/11 /21......................... So perhaps even longer ago. If the analysis is done locally, then results may come through shortly.

Southwesterner "................but that remains a significant technical challenge."

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

CK "The end of the decline is around 10 metres from the structure currently being drilled"
That is very good news. I had got a bit lost about which holes were where. That suggests that if CUSN consider it viable, mining could start fairly quickly. And the chances of it being viable are increased by the existence of WMD.

What do you think about tunneling in from the South side of Carn Brea? Presumably the tunnel could be shorter, but all the waste would then have the be trucked around as I guess SW Aggregates are near SC.
Talking of declines, do you think the news today means the Wheal Maid decline might be put back into use? It gives CUSN depth, but does it go in the right direction? It would save a considerable expense if it does.