Member Info for Valuation-it-is

Bonkers99 Also to consider, the value of CUSN is not just indicated by the NPV in the PEA. To that we should add, the value of UD , Gwinear etc and the value in the holding in and relationship with Cornish Lithium.

Bonkers99 "Can anyone float an expected NPV number for the PEA?"

Outsiders cannot, No. But here are some pointers.

The 2017 PEA* showed an NPV of $130.5m assuming a tin price of $10/lb around $22,000 per tonne.

• Source:- Https://minedocs.com/21/South-Crofty-PEA-02162017.pdf

In the sensitivity analysis (p22) it showed that if the tin price rose to $11/lb around $24,200/tonne- a 10% increase- the NPV rose to $188.1m i.e. an increase in NPV of 44%. i.e. highly sensitive.

Now the tin price is $32,320/ tonne or 47% up on the 2017 central estimate. All other things being equal, which they are not, would suggest an adjusted NPV of around $400m.

Much has changed since 2017 including the cost of building and running the plant, interest rates and thus the discount factor for the NPV calculation. So the $400m appears to need to be adjusted down considerably.

However there are also a number of other positive changes.

Because the indicated and inferred resources have increased very significantly it is reasonable to assume mine life has increased or the throughput could be increased. This would move the NPV up. See below***

Furthermore it looks as if the cut-off grade could be reduced as XRT ore sorters have been trialed by CUSN with very encouraging results. This would help to further increase the resources and boost the NPV. The same machines are likely to reduce the size of the plant required to process the ore- helping to reduce initial capex and opex – which also would help the NPV upwards.

And the discovery of the Wide Formation and Great Flat Lode Splay may well add to the resources, when fully assessed, which again would either enable CUSN to increase throughput or extend the mine life, both of which are likely to enhance NPV.

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***In the 2017 PEA the indicated and inferred resources were for the lower & upper mine respectively :

Indicated 1660+257 kt Inferred 738 +464kt

Total 2,398 + 721kt =3,119 kt

Indicated and Inferred at 5/2/24 for the upper and lower mines

Were :-

Indicated 2,896 kt +260 kt Inferred 2,626 kt + 465kt

Total 5,522 kt + 725kt = 6,247 kt

A significant 100% uplift, with the likelihood of more to come from the Wide Formation and GFL Splay.

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Not long to wait for the actual figures in a new PEA. Good Luck everyone.

Gingy Good point.

Some sort of fund raising can be expected if the preliminary economic estimate is supportive of a go ahead as expected. This would be to pay for the process plant.

I think there may be an element of an equity issue and if you want to take part I suggest you contact all the following people to let them know.

Fawzi Hanano and Irene Dorsmann at CUSN investors@cornishmetals.com

Matthew Hasson at Hannam and Partners cornish@hannam.partners

Derrick Lee at Cavendish Partners 0131 220 6939

Richard Morrison @SPAngel 0203 470 0470

Good luck, Vii

Https://www.internationaltin.org/wp-content/uploads/2020/02/Global-Resources-Reserves-2020-Update.pdf

Gingy - I agree But lets look to see

1.if the price of tin stays above $30k/tonne.

2. If the exploration results continue to be encouraging

3. How the finance for the process plant is structured.

Given the rise in metal prices, other areas of exploration - UD, Gwinear may be worth bringing forward

And another report

https://www.msn.com/en-gb/money/other/lme-bans-russian-origin-metal-after-uk-us-impose-new-sanctions/ar-BB1lzrPg

Https://www.gov.uk/government/publications/notice-to-importers-2953-russia-import-sanctions/russian-metals-sanctions-overview

Https://www.gov.uk/government/publications/notice-to-importers-2953-russia-import-sanctions/russian-metals-sanctions-overview

Croissant

My understanding of the new plan is different to yours. Whereas the plan had been to ramp up slowly over several years, I think they are now aiming to go for a much quicker ramp up.

Actually the previous effort did work, finally in the company's last week or two giving the recovery rates targeted. Unfortunately the news came too late to raise the necessary finance and the company went bust.

This time around there will also be a number of improvements to the flow sheet................. assuming the permit is granted by the EA.

Good to see you back on the board MO. Good luck. Electrification metals seem to be having a run up in price at last.

The market will soon wake up to the impact of the higher tin price on the outllook and NPV of CUSN.

Metal prices are melting upwards..........................Share prices to follow.

Https://minedocs.com/21/South-Crofty-PEA-02162017.pdf

Gingy

The difference it will make will be very significant, but as you say, not in the normal way for a producing company.

CUSN's future relies on being able to produce a positive economic assessment and then an attractive Feasibility study, for the investors who will fund the building of the processing plant. The 2017 Preliminary Economic Assessment (PEA), whilst now out of date, gave an idea of the sensitivity of the NPV to tin prices. Not surprisingly the NPV is very sensitive to tin prices. Section 22.4 of the PEA, (available on SEDAR) starting on page 170, discusses key sensitivities. The first line of table 22.3 shows that a 10% increase in the price of tin moved the NPV of the project up by 44%. Whilst it is almost certain that the figures have changed since 2017, that does give a guide as to what to expect.

Since its low in November the tin price, as reflected in the price of the tin driven ETC “TINM” has risen not 10%, but 40% and more today. That price move, if maintained, will make a huge difference to the NPV of the project and make its financing much more attractive and less risky, to providers of capital, be it project finance, off-take agreements, debt, equity etc. i.e. make the realisation of the value of the project much more likely, and give the realisation a much bigger NPV.

Tin and tungsten prices are heading up. Good news for us, and good news for Tungsten West - which is perhaps our best hope for processing any output from Redmoor.

Take a look at the graph of "TINM" - a tin based ETC. The move up in the tin price will be catching the eye of tin investors who will be likely to add to the buying pressure.

Tin is Tungsten West's secondary product. Again very helpful for the financing effort.

All we need is for aggregate prices to lift off to achieve a hat trick.

Couldn't come at a better time for TUN. It will hopefully make financing much easier.

https://news.metal.com/newscontent/102703327/tungsten-prices-hit-highest-in-over-ten-years-many-tungsten-companies-continued-to-increase-long-term-order-quotations-smm-comments

Gingy

You might find Fawzi Hanano's comments at 8.20 onwards particularly helpful in this video.

https://www.youtube.com/watch?v=dEx8NGsfD4M

Https://www.express.co.uk/news/world/1886188/china-rare-metal-gallium-price

It would perhaps be helpful to split capex into two components. Necessary maintenance capex, i.e. that capex which is required to maintain the EBITDA at the current level, and expansionary capex which is that needed to expand the business and increase the EBITDA.

The former should be deducted from the EBITDA when calculating the ratio, the latter not.

The resulting ratio can then be compared with the sector average, calculated the same way with appropriate discounts for being a "minnow"/more risky.