Buildings at the South Crofty tine mine that closed in 1998.
Strongbow Exploration, the company that is seeking to revive the South Crofty tin mine in Cornwall, south-west England, is still targeting a listing on London’s Aim exchange this year, president and CEO Richard Williams said on Wednesday, while announcing a financing and offtake agreement with Orion Mine Finance for the project.
TSX-V-listed Strongbow subsidiary Western United Mines (WUML) has entered into a conditional ‘synthetic’ tin warrant offtake agreement with OMF Fund II H, an affiliate of Orion Mine Finance.
OMFFII will purchase from WUML London Metal Exchange (LME) tin warrants representing tin refined to LME approved brands equal to 5% of the production of tin from the South Crofty mine over a ten-year period.
The agreement is conditional on the Aim listing and OMFFII making an equity investment of no less than $3-million in common shares of Strongbow as part of the listing.
“This agreement represents further endorsement of the South Crofty tin project. South Crofty, one of the highest grade tin resources globally, is well placed to deliver ‘clean tin’ to end users seeking to secure supply that is conflict-free, does not exploit child labour, and does not have a negative environmental impact,” Williams said.
He stated that the company was working towards an Aim listing before the year-end.
Strongbow said in May that it had applied for a listing on the Aim exchange, which it hoped would help it raise £25-million to progress the South Crofty mine to a production decision. Initially, its plan was to have its shares admitted in June.
South Crofty, located in the towns of Camborne and Pool, was the last tin mine to close in Cornwall in 1998. The project has a valid mining licence until 2071 and has planning permission to build a new process plant. It has also secured a water discharge permit.
A February 2017 preliminary economic assessment estimates that South Crofty will have an after-tax net present value of $128.2-million and an internal rate of return of 24%. The preproduction capital expenditure of $113.6-million will be repaid in 3.8 years.
The lower mine tin-only indicated resource of the project is estimated to be 1.66-million tonnes at 1.81% tin and the inferred resource to be 0.74-million tonnes at 1.91% tin.
Shares in the company advanced 26% to C$0.17 each on Wednesday.