Cornish Metals agrees sale of Mactung and Cantung royalty interests

Mineral explorer and developer Cornish Metals announced a binding agreement with Elemental Altus Royalties Corporation on Monday, for the sale of its royalty interests in the Mactung and Cantung tungsten projects in Northern Canada.

The AIM-traded firm said the total cash consideration for the transaction was $4.5m.

Under the agreement, Elemental Altus would pay Cornish Metals $3m on the closing of the transaction, with an additional $1.5m payable 12 months later.

Additionally, Elemental Altus would assume the obligation to pay a CAD 1.5m (£0.84m) deferred consideration to Teck Resources, contingent on either a development decision at Mactung or the resumption of commercial production at Cantung.

That agreement with Teck was a closing condition for the transaction.

Cornish Metals initially acquired the royalties in March 2016 for CAD 1.5m.

The Mactung royalty consists of a 4% net smelter returns royalty on the Mactung tungsten project, partially located in Yukon and the Northwest Territories.

Cornish Metals said the project is owned by Fireweed Metals, with half of the Mactung royalty buyable by the property owner to reduce it to 2% for CAD 2.5m.

The Cantung royalty is a 1% net smelter returns royalty on the Cantung tungsten project, which operated intermittently from 1962 until its closure in 2015.

Cornish Metals said the royalties had a book value of nil.

“The sale of the Mactung and Cantung royalties follows Cornish Metals' recently announced sale of the Nickel King project and further demonstrates our priority and focus on advancing the company's wholly owned and fully permitted South Crofty tin project, in the UK, towards commencement of production in 2027,” said director and interim chief executive officer Ken Armstrong.

At 1100 BST, shares in Cornish Metals were up 0.19% at 5.86p.

Reporting by Josh White for Sharecast.com.