CORNISH METALS RELEASES UNAUDITED FINANCIAL STATEMENTS AND MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE SIX MONTHS ENDED 31 JULY 2023

Vancouver, September 28, 2023

Cornish Metals Inc. (TSX-V/AIM: CUSN) ("Cornish Metals" or the "Company"), a mineral exploration and development company focused on its projects in Cornwall, United Kingdom, is pleased to announce that it has released its unaudited financial statements and management, discussion and analysis ("MD&A") for the six months ended July 31, 2023. The reports are available under the Company's profile on SEDAR (www.sedar.com) and on the Company's website (www.cornishmetals.com).

Highlights for the six months ended July 31, 2023 and for the period ending September 28, 2023

(All figures expressed in Canadian dollars unless otherwise stated)

·   Updated JORC (2012) compliant Mineral Resource Estimate for South Crofty mine released showing a 31.6% increase to contained tin in the Indicated Mineral Resource category for the Lower Mine (news release dated September 13, 2023);

·    Drill program to collect samples for metallurgical testwork as part of the South Crofty Feasibility Study completed in June 2023 with assay results received to date reported (news release dated July 3, 2023)

·    Construction of the water treatment plant ("WTP") completed at a construction cost in the region of £7.0 million ($11.9 million at quarter end exchange rate);

·    Wet commissioning of the WTP commenced with mine dewatering expected to commence in October 2023 once the WTP is treating water to the required standards (news release dated September 27, 2023);

·    Two submersible pumps installed in New Cook's Kitchen ("NCK") shaft with the pumps and variable speed drives successfully commissioned in July 2023 (news releases dated June 26, 2023 and July 18, 2023);

·   Fifteen-month power supply contract agreed for the provision of 100% renewably generated power thereby providing certainty over power costs during the mine dewatering phase (news release dated July 18, 2023);

·    Two single drum winders ordered for the shaft re-access work, with both winders expected on site in October 2023 with installation planned shortly thereafter;

·    Remedial work underway on the south headframe above NCK shaft and the winder building in readiness for the installation of the main winder;

·    Commencement of follow-up exploration drill program at the Wide Formation target in the Carn Brea exploration area (news release dated September 19, 2023); and

·    Work on the Feasibility Study continues with completion planned by the end of 2024.

Richard Williams, CEO of Cornish Metals, stated, "The Cornish Metals team has made great progress continuing to advance the South Crofty project over the last quarter with the construction of the water treatment plant and updated Mineral Resource at South Crofty.  

"The recently announced 39% increase in tonnes and the 32% increase in contained tin confirms management's belief in the potential to continue to grow the Mineral Resource base at South Crofty. 

"Much has been achieved since the beginning of the year and, with commissioning of the water treatment plant underway, it is pleasing to see that commencement of dewatering the mine is just round the corner.  Furthermore, there has been a lot of progress made in planning and preparing for the re-accessing of the mine which will take place in parallel with mine dewatering.

"Additionally, a successful drill program at the Wide Formation will allow us to assess the potential to extend both the mine life and increase production throughput at South Crofty. 

"Overall, the last few months have been very busy but also exceptionally rewarding as we move towards a construction decision for South Crofty.  The Feasibility Study remains on track for completion in 2024.  The financial position of the Company is healthy and we remain focussed on our objective to complete the dewatering of South Crofty within the next 18 months."

Review of activities

Updated Mineral Resource Estimate released for South Crofty mine

An updated Mineral Resource Estimate for South Crofty mine, prepared in accordance with the requirements of the JORC Code (2012 Edition), was released on September 13, 2023 ("Updated MRE").  This updates and supersedes the MRE published on June 9, 2021 ("2021 MRE").

Since the preceding 2021 MRE, the Company's geological team has continued to digitize and incorporate historic assay data into the Mineral Resource model for the Lower Mine.  Furthermore, confirmation of existing structures at depth through the recent metallurgical drilling program (as described below) has been incorporated into the Updated MRE.

The Updated MRE for the Lower Mine area of South Crofty mine reports a:

·    39.0% increase in tonnes and a 31.6% increase in contained tin in the Indicated Mineral Resource category from the 2021 MRE; and

·    35.6% increase in tonnes and 15.5% increase in contained tin in the Inferred Mineral Resource category from the 2021 MRE.

The Updated MRE for the tin-only Lower Mine is summarized below:

The majority of new Mineral Resources are contained within the central part of the mine in No. 1, No. 2, No. 3, Main, Intermediate, North and Great Lodes following digitization and modelling of historic data.

The Updated MRE for the Lower Mine area is reported using a 0.6% tin cut-off grade, the same cut-off grade applied in the MREs prepared in 2016 and 2021.  The Updated MRE was prepared by the Company's geological team and independently reviewed and verified by AMC Consultants (UK) Ltd.

The Lower Mine area contains tin mineralization within quartz-tourmaline vein or "lode" structures, which are hosted entirely within granitic rocks.  The major lode structures that comprise the Updated MRE remain open along strike and to depth.

Mineral Resources for the Upper Mine area of the South Crofty Updated MRE were reported accounting for a recalculation of tin equivalent grades due to changes in metal prices since the 2021 MRE was published (refer press release dated September 13 2023).

Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant issues.

The Updated MRE will be incorporated into the mine plan to be included in the Feasibility Study as described below.

Construction progress of water treatment plant at South Crofty

Construction progress of the WTP at South Crofty involves various enabling works, including completion of the treated water discharge duct from the WTP, various roadways and the concrete foundation pad for the WTP itself.  Pipelines carrying water from the submersible pumps in NCK shaft to the WTP were also laid along with electrical and communication systems.

The WTP comprises nine reaction tanks for altering the chemical properties to precipitate the various metals out of solution, and six inclined plate settling tanks (lamella clarifiers) to remove the precipitated solids.  All the tanks and clarifiers were installed by the end of June 2023, as were the structural steel supports and walkways which provide access to the WTP.  At the back end of the WTP, a sludge storage and thickening system has been installed, consisting of storage tanks for unthickened and thickened sludge and a deep cone thickener to thicken the sludge.

Reagent storage, make-up and dosing equipment have been supplied as complete packages from specialist manufacturers who also assisted with their installation. 

At the mine end, a building housing the high voltage power supply/sub-station and the variable speed drives required to operate the pumps was completed in August 2023.  The 11kV power supply was also energized in August 2023 with the new power supply contract (refer below).  At the WTP end, a large motor control center and automation system has been installed in a new building, which National Grid have connected to their network with another new substation. 

A hydro-turbine has been added ahead of the discharge point that will generate up to 15% of the electricity required to operate the WTP.

Wet commissioning of the WTP commenced mid-September 2023 with final balancing of the discharge chemistry to be completed.  Dewatering of the mine is anticipated to commence in October 2023.  Only once the plant is fully operational and performing to the required standards will any treated water be discharged to the Red River.

Overall, the cost of construction for the WTP is expected to be in the region of £7.0 million ($11.9 million at quarter end exchange rate) subject to the length of the commissioning period.

Installation of submersible pumps and commissioning of variable speed drives

Two submersible pumps manufactured by KSB in Germany have been installed in NCK shaft for the first stage of the two-stage mine dewatering program.  The pumps are specialist high head, vertical pumps that are controlled by variable speed drives ("VSDs") to enable the 25,000m3/day pumping rate to the WTP to be maintained as the water level drops and the pumping head increases.  The VSDs were manufactured by Schneider Electric and supplied by Siemag Tecberg UK.

The first pump was installed in NCK shaft at the end of June 2023 and the second pump was installed mid-July 2023.  Commissioning teams from Siemag Tecberg UK and Schneider Electric were on-site for the last two weeks of July 2023 testing the pumps and VSDs. The pumps and VSDs were successfully commissioned and ran through a series of performance tests to demonstrate their ability to meet the target flow rate to the WTP.

The pumps have been initially lowered to immediately below the 195 fathom level (360 meters below surface) and suspended from 120 three meter long pipes that form the temporary rising main.  When the water level reaches the 195 fathom level, a permanent set of pumps will be installed at that level.  The submersible pumps will then be lowered to the 400 fathom level (approximately 700 meters below surface) for the second stage of dewatering.

For the purposes of commissioning, the pumps have been pumping mine water from below the 195 fathom level to the WTP where it has been diverted around the plant and returned back underground via a specially installed commissioning loop.  Once the WTP is commissioned, the fully treated mine water will be diverted to the Red River and dewatering of the mine will commence.

Execution of power supply contract for South Crofty

In July 2023, South Crofty entered into a 15-month supply contract with NPower for the provision of 100% renewably generated power. The supply contract allows South Crofty to advance through the mine dewatering phase with certainty over the power costs for the next 15 months.  This added certainty is an important financial consideration given the power price volatility seen over the last 18 months.

Preparation for re-accessing the New Cook's Kitchen shaft

Two single drum winders have been ordered for the shaft re-access work, with the main winder being supplied by Siemag Tecberg UK and an emergency egress winder being provided by Zitrón S.A.. The winders are due on site in October 2023. These winders will enable the NCK shaft to be re-accessed once dewatering activities are underway.  Conveyances and rope attachment packages for both winders have been ordered.

The south headframe sitting above NCK shaft is being remediated and strengthened as required. New sheave wheels and associated apparatus have been ordered to replace the originals which were beyond economic repair.  The building housing the main winder is being remediated with the installation of new exterior cladding.  The secondary egress winder is being housed in a new temporary winding house to the west of the shaft, which is being erected in October 2023.  The concrete foundations for both winders have been poured in readiness for their installation in October 2023.

Pump and pipe handling infrastructure has also been installed around the headframe to facilitate the lowering of the pumps and pipes and subsequent dewatering activities.  The above water timber sets in the shaft have been inspected down to the water level, with most found to be in good condition.  Where required, timber sets in the shaft are being replaced and any debris removed.

Metallurgical study drill program at South Crofty

A metallurgical drill program as part of the Feasibility Study was completed between July 2022 and June 2023.  The program was designed to collect samples for various metallurgical studies, including XRT ore sorting, flowsheet optimisation and paste backfill studies.  This testwork should allow acceleration of the Feasibility Study in advance of dewatering the mine and will provide key information for the mineral processing flowsheet.

The program comprised 10,312 meters of diamond drilling with three drill rigs being contracted from Priority Drilling Limited, under the supervision of the Company's geological team. 

Samples were collected from the North Pool Zone (eastern section of Mineral Resource), the No. 4 and No. 8 Lodes (central part of the Mineral Resource), Roskear and Dolcoath South (western part of the Mineral Resource).  These five main lodes / mineralized zones contain the majority of the mineralized material anticipated to be processed during the first six years of the mine life.

The metallurgical drill program comprised 14 parent and daughter drill holes targeting No. 4 and No. 8 Lodes, and 14 parent and daughter holes targeting the Roskear Lode.  Visible tin mineralization was observed in all 28 drill holes. Three holes from each Lode were assayed for base metals and associated elements and the rest of the drill intercepts were used for metallurgical studies.  The assay results were reported in the press release dated July 3, 2023.

Four parent and 29 daughter holes targeting the North Pool Zone and the Dolcoath South Lode, respectively, were also completed.  Assay results from these holes will be released when received.

Initial metallurgical studies have commenced and are expected to be substantially completed by the end of 2023 for inclusion in the Feasibility Study with completion planned by the end of 2024 as described below.

Preparation of Feasibility Study

Work on the South Crofty Feasibility Study has been underway since June 2022.  In addition to the metallurgical testwork program and Updated MRE noted above, the Feasibility Study continues to advance with the following activities:

·   Wardell Armstrong has completed Phase 1 of the metallurgical testwork program, including ore sorting testwork, and is now progressing through flowsheet verification;

·    Fairport Engineering has completed concept and optimization design studies and is underway with the feasibility level engineering of the mineral processing plant;

·    A site investigation for the mineral processing plant has been completed by AGS Ground Solutions;

·  Concept numerical modelling of the proposed underground mining methods and stope designs, including back analysis, has been completed by MiningOne;

·  Geotechnical televiewing has been completed on the five primary mining areas by Robertson Geo, validating previously known structural data;

·  The program for geotechnical rock testing has been completed with the results confirming known historic testwork;

·    Paterson & Cooke (UK) has completed concept engineering and sighter testwork on paste backfill options;

·    Life of Mine underground ventilation design options have been completed and are being reviewed;

·    Entech Mining and RSV Group have completed the refurbishment and recommissioning study of NCK and Roskear shafts, and preliminary designs for the material handling infrastructure in the Upper Mine have been completed;

·    Underground stope optimization is underway, which will include the new central mining areas from the Updated MRE noted above;

·    AMC Consultants (UK) has been commissioned to review and provide overall Feasibility Study sign-off;

·    CRU Group has been engaged for the market study section of the Feasibility Study;

·    Piteau Associates has completed the mine hydrogeological studies; and

·   SLR Consulting is underway with the environmental and social sections of the Feasibility Study.

It is planned that the Feasibility Study will be completed by the end of 2024.

Commencement of exploration drill program at Carn Brea South

A 9,000 meter exploration drill program commenced at the Wide Formation target in the Carn Brea South exploration area (refer news release dated September 19, 2023).  The drill program is designed to test the geometry and the continuity of tin mineralization within the recently discovered Wide Formation target (refer news release dated January 10, 2023).

The alteration style in the Wide Formation, comprising pervasive tourmaline and quartz (termed 'blue peach'), is similar in character to that associated with No. 8 Lode, one of the most prolific tin producing lodes in the latter years of operation of the South Crofty mine.  The drill programme will test an area measuring 2,500 meters along strike (northeast to southwest) and 500 meters downdip (north to south).

Financial highlights for the six months ended July 31, 2023 and July 31, 2022

·    Increase in operating costs impacted by higher insurance costs attributable to more site-based activities primarily relating to the construction of the WTP and related dewatering work;

·    Expenditure of $8.8 million incurred during the period on the construction of the WTP and related dewatering equipment, as well as new or replacement equipment for the mine;

·    Other project related costs of $6.1 million incurred during the period relating to the advancement of South Crofty to a potential construction decision, primarily for the metallurgical drill program and planning activities for dewatering and shaft re-access;

·    Interest income of $807,294 arising from increased interest rates being received on higher cash balance following the Offering; and

·    Recognition of foreign currency translation gain of $2.6 million for those assets located in the UK when translated into Canadian dollars for presentational purposes.

Outlook

As described above, the proceeds raised from the Offering completed in May 2022 are being used to advance the South Crofty tin project to a potential construction decision within 30 months from closing of the Offering (December 2024). 

Within 30 months from the closing of the Offering, the Company's plans are as follows:

·    Commence dewatering and thereafter complete the dewatering of the mine within 18 months;

·    Complete a Feasibility Study using all reasonable commercial efforts by the end of 2024; and

·  Commence basic and detailed engineering studies, construction of the processing plant, refurbishment of underground facilities and other on-site early works.

The follow up exploration drill program at the Wide Formation target at Carn Brea South will also continue subject to the receipt of satisfactory drill results.

Subject to the availability of financing, consideration will also be given to continuing with the Company's exploration program at United Downs and evaluating other high potential, exploration targets within transport distance of the planned processing plant site at South Crofty.

ABOUT CORNISH METALS

Cornish Metals is a dual-listed company (AIM and TSX-V: CUSN) focused on advancing the South Crofty high-grade, underground tin Project through to delivery of a Feasibility Study, as well as exploring its additional mineral rights, all located in Cornwall, United Kingdom.  The former producing South Crofty tin mine is located beneath the towns of Pool and Camborne, and closed in 1998 following over 400 years of continuous production.

TECHNICAL INFORMATION

The technical information in this news release has been compiled by Mr. Owen Mihalop. Mr. Mihalop has reviewed and takes responsibility for the data and geological interpretation. Mr. Owen Mihalop (MCSM, BSc (Hons), MSc, FGS, MIMMM, CEng) is Chief Operating Officer for Cornish Metals Inc. and has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined under the JORC Code (2012) and as a Qualified Person under NI 43-101. Mr. Mihalop consents to the inclusion in this announcement of the matters based on his information in the form and context in which it appears.

ON BEHALF OF THE BOARD OF DIRECTORS

"Richard D. Williams"

Richard D. Williams, P.Geo

For additional information please contact:

In North America: Irene Dorsman at (604) 200 6664 or by e-mail at irene@cornishmetals.com

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Caution regarding forward looking statements

This news release contains "forward-looking statements" including, but not limited to, statements in connection with the expected use of proceeds of the Offering, including in respect of certain work programs, expected construction, including in respect of the WTP, and the potential completion of a Feasibility Study on the South Crofty mine and the timing thereof, the exploration program at United Downs and other exploration opportunities surrounding the South Crofty tin project, expected recruitment of various personnel, and expectations respecting tin pricing and other economic factors.  Forward-looking statements, while based on management's best estimates and assumptions at the time such statements are made, are subject to risks and uncertainties that may cause actual results to be materially different from those expressed or implied by such forward-looking statements, including but not limited to: risks related to receipt of regulatory approvals, risks related to general economic and market conditions; risks related to the COVID-19 global pandemic and any variants of COVID-19 which may arise; risks related to the availability of financing when required and on terms acceptable to the Company and the potential consequences if the Company fails to obtain any such financing, such as a potential disruption of the Company's exploration program(s); the timing and content of upcoming work programs; actual results of proposed exploration activities; possible variations in Mineral Resources or grade; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes, title disputes, claims and limitations on insurance coverage and other risks of the mining industry; changes in national and local government regulation of mining operations, tax rules and regulations.

Although Cornish Metals has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Cornish Metals undertakes no obligation or responsibility to update forward-looking statements, except as required by law.

Market Abuse Regulation (MAR) Disclosure

The information contained within this announcement is deemed by the Company to constitute inside information pursuant to Article 7 of EU Regulation 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 as amended.

CONSOLIDATED CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

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CONSOLIDATED CONDENSED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS

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CONSOLIDATED CONDENSED INTERIM STATEMENTS OF CASH FLOWS 

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