Cornish Metals sells Canadian royalties to Elemental Altus
The move follows the sale of the Nickel King property, highlighting the company's focus on advancing the South Crofty tin project in the UK.
Cornish Metals (LON, TSX-V: CUSN) is selling its royalty interests in the Mactung and Cantung tungsten projects in Canada’s Yukon and Northwest Territories, to Elemental Altus Royalties (TSX-V: ELE) for $4.5 million.
The move follows the company’s recent sale of the Nickel King property in Canada’s Northwest Territories, and highlights Cornish Metals’ priority and focus on advancing its flagship South Crofty tin project in the UK.
Mactung, which has a 4% net smelter return (NSR) royalty, is an advanced-stage exploration project on the border of Yukon and Northwest Territories. The asset is owned by Fireweed Metals Corp, a Lundin Group company.
The Cantung tungsten project, located in the western part of the Northwest Territories, was in operation on and off from 1962 until its closure in 2015. The Cantung royalty represents a 1% NSR royalty.
“The addition of tungsten to the portfolio offers exposure to one of the most economically important critical minerals in the EU, US and Canada through a royalty on one of the largest, high-grade deposits in the world outside of China,” Frederick Bell, CEO of Elemental Altus, said in a separate statement.
Elemental noted it would enter into an agreement with Teck Resources (TSX: TECK.A, TECK.B)(NYSE: TECK) as it takes over the responsibility of paying a C$1.5 million deferred consideration. This payment will be triggered by either a development decision at Mactung or the resumption of commercial production at Cantung, whichever comes first.
The agreement with Teck is a requirement for Cornish Metals’ sale to be finalized.
Second life
Cornish Metals has been working on bringing the past-producing South Crofty tin mine back to life since 2016.
The former operation has been shut since 1998 following more than 400 years of almost continuous production. It was the last tin mine in Europe when it closed. Several companies attempted to revive the flooded mines between 2001 and 2013, but due to persistent poor market conditions the assets were put into administration in 2013.
As part of Cornish Metals’ plans to reopen the historic mine, the company has said it would build new processing facilities and all the necessary site infrastructure. It has already obtained permission for underground mining until 2071 and an environmental permit to dewater the mine.
The Vancouver-based miner is eyeing first production in 2027, with an estimated annual output of 4,700 tonnes of tin in years two through six, which is equivalent to 1.6% of global mined tin.
Tin is on the UK’s critical metals list and its importance has also been recognized by other European Union governments, as well as the US and China.